A new study from Juniper Research (www.juniperresearch.com) has found that the wearables market has begun to shift away from wrist-based devices such as smartwatches and fitness trackers, with other device categories forecast to grow much faster.
The research group ranks the fastest growing wearable sectors, in terms of shipments and compound annual growth rates (CAGRs), over the next two years as: connected clothing (102%), smart glasses (98%), smart jewelry (55%), hearables (31%), and smart watches (31%).
Juniper forecasts that the total smart wearables market will reach nearly 350 million devices shipped by 2020. The market is currently dominated by smartwatches and activity trackers, with 137 million devices expected to be shipped in 2018. However, growth will slow, shipping almost 190 million by 2020 as the lifecycle of devices lengthens as fewer new features and a software focus delay repeat purchases.
Juniper expects connected clothing to accelerate in the coming years, thanks to developments in conductive fabric, alongside smart sportswear from companies like Sensoria, Lumo and Under Armour. This sector will ship over seven million by 2020, before reaching nearly 30 million in 2022.
In addition, the research group says, as device types broaden and purchase cycles lengthen, companies will need to focus on software and data services to maintain their revenues. The largest market for these subscription services will be healthcare, with services payable to vendors like AliveCor and Quell exceeding $2.5 billion by 2022.
Other segments will struggle to monetisze data services, with consumer fitness and smartwatch service revenues generating a combined $125 million in 2022. Research author James Moar explained: “A key challenge for wearables is to provide a concrete benefit or unique data. All our top growth segments either provide in-depth data from specialized form factors, or benefits that do not involve data at all.