Proving the Business Case for the Internet of Things

Annual shipments of wearables to grow nine-fold over next five years: Berg

Iain Morris
December 18, 2014
Shipments of connected wearables will grow from 19 million units this year to more than 168 million in 2019, according to the latest research from Berg Insight.
The wearables being shipped by that date will include smartwatches, smart glasses, fitness and activity trackers, people monitoring and safety devices and medical devices, according to the market-research company.
Bluetooth looks set to remain the primary connectivity option in the next few years, although 16.6 million of the wearables shipped in 2019 will incorporate cellular connectivity – mainly in the smartwatch and people monitoring and safety categories – according to Berg.
The market for fitness and activity trackers stands out as the biggest in the wearables industry, with 13 million units shipping in 2014.
Specialists like Fitbit (San Francisco, CA, USA), Jawbone (San Francisco, CA, USA) and Garmin (Olathe, KS, USA) have been joined by major players from the smartphone industry, including LG (Seoul, South Korea), Huawei (Shenzhen, China), Microsoft (Seattle, WA, USA), Samsung (Seoul, South Korea), Sony (Tokyo, Japan) and Xiaomi (Beijing, China).
“This product category is now facing fierce competition from smartwatches that have activity tracking features,” said Johan Svanberg, a senior analyst with Berg. “Decreasing prices and new form factors will still enable dedicated fitness and activity trackers to reach shipments of 42 million units in 2019.”
Berg notes that a “new breed” of smartwatches became available earlier this year when high-profile Android Wear smartwatches from Sony, LG, Motorola (Schaumburg, IL, USA) and Asus (Taipei, Taiwan) arrived in the market to compete with existing offerings from Pebble (Palo Alto, CA, USA) and Samsung (Seoul, South Korea).
“Smartwatches are already the second largest category of connected wearables and sales will pick up considerably in 2015,” said Svanberg. “The Apple Watch will enter the market and other major smartphone vendors will launch next generation Android Wear devices.”
“Traditional watch vendors will also enter the market in the coming years, both with smartwatches capable of running third party applications as well as traditionally styled watches with basic smartphone notification features,” he added. “Improved devices available in different price segments will drive adoption in the next five years and smartwatches is predicted to become the largest device category by the end of the forecast period.”
Berg says that shipments of smart glasses have been modest so far but points to a number of promising use cases in specific markets such as enterprise and medical, as well as in niche parts of the consumer market.
Accordingly, it expects smart glasses to become the third-largest category of connected wearables in the next five years.
“The opportunities are plentiful – improved imaging capability together with hands-free operation, real-time communication and augmented reality functionality would for example make smart glasses a serious contender on the action camera market,” said Svanberg. “Connected wearables such as cardiac rhythm management devices, ECG monitors, mobile Personal Emergency Response Systems (mPERS) and wearable computers are already common in the medical, people monitoring and enterprise segments.”
“Furthermore, miniaturized electronics, low power wireless connectivity and cloud services have inspired a wide range of new connected wearables such as authentication and gestures wristbands, notification rings, smart motorcycle helmets and smart gloves,” he added. “Most of these products are still experimental, but in a few years’ time there will be many examples of new successful devices on the market.”