According to the latest market study by Gartner, 274.6 million wearable electronic devices will be sold worldwide in 2016 -- that's an increase of 18.4 percent from 232.0 million units sold in 2015. Wearables will generate revenue of $28.7 billion in 2016, $11.5 billion of that total will be from smartwatches.
"From 2015 through 2017, smartwatch adoption will have 48 percent growth largely due to Apple popularizing wearables as a lifestyle trend. Smartwatches have the greatest revenue potential among all wearables through 2019, reaching $17.5 billion," said Angela McIntyre, research director at Gartner.
However, although Gartner believes that smartwatches are likely to be one of the popular types of wearables, their adoption is unlikely to reach mainstream status, in the same way that smartphones have achieved globally.
Market Development Trends for Wearables
Fitness wearables -- which include wristbands, smart garments, chest straps, sports watches and other fitness monitors -- continue to increase in popularity, driven in some part by U.S. wellness programs.
"Of all the fitness wearables, sports watches will be the one product category to maintain its average retail price over the next several years," said Ms. McIntyre. "Continued advances in sensors and analytics for sports watches will bring new capabilities that bolster average retail prices."
Although the size of the worldwide wristband market was similar with the unit sales of smartwatches in 2015, looking forward smartwatches may have greater appeal with consumers because they have more multi-functional capabilities.
Wristband providers are experimenting with how to compete with smartwatches and take market share from the market leader, Fitbit. Examples of emerging value propositions for wristbands beyond fitness include mobile payments, access, safety, wellness and health.
Head-mounted displays (HMDs) are an emerging market with origins as expensive military projects, and in 2016 the HMD market will progress toward mainstream adoption for consumers and enterprise use.
Enterprise use of HMDs will also grow in the coming years with 26 percent of HMDs designed for business use in 2018. HMDs will be purchased by businesses for use by employees for tasks such as equipment repair, inspections and maintenance.
Furthermore, Gartner analysts predict that workers also will use HMDs for viewing instructions and directions hands-free while they are performing a task. Within the manufacturing and industrial workplace, it's highly likely that wearable devices will become part of a comprehensive Internet of Things (IoT) business transformation strategy.