Moreover, revenues will be driven by high price points for these devices allied to their anticipated strong market demand.
Based on the findings from its latest market study, Juniper has revised upwards the adoption of devices in the two key segments of consumer electronics ‘Multimedia & Entertainment’, and ‘Multi-functional’ devices.
Revisions such as these are common in the early years of a new technology category, and reflect the latest announcements from vendors across the sector.
"It is worth observing that this change in adoption levels can also be attributable to heightened consumer awareness of wearable technology and a better visibility of product adoption, especially in the smart watch segment," said Nitin Bhas, senior analyst at Juniper Research.
Service Revenue Opportunity from Applications
Juniper anticipates that over time several changes will occur in the smart wearable device market, partly as a result of developments in the software app model, and partly due to the increasing use of embedded cellular connectivity within devices.
Subscription revenues will be possible for certain sectors within the market. Companies such as Fitbit and FiLIP are seeking to develop recurring revenues through premium services -- facilitated via the smart wearable device or through commission for a service rendered by virtue of the device.
For example, FiLIP is an FCC approved app-based communication watch for children which combines GPS, Wi-Fi and cellular capabilities to keep parents and kids connected via two way voice calling, messaging and location functionalities.
The company’s service model is expected to include an up-front device price and an on-going monthly subscription plan.
Other key findings from the market study include:
- Vendors need to address key hurdles and critical issues from a social and technological perspective to achieve mass adoption.
- Significant opportunities will arise for app developers – across the health, fitness, sports and communication segments.