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5G Apps will Reignite the Wearable Market

The modern wearables market began in the 1960s with the development of calculator watches and other electronic devices that could be worn on the body.

The market has grown, driven by the increasing popularity of fitness trackers, smartwatches, and other devices that can track our health and fitness, provide notifications, and control our smart home devices.

Wearable device demand growth declined to 14.6 percent in 2022 from 27.7 percent year-over-year in 2021 due to the economic slowdown and reduced spending after the peak of the COVID pandemic.

Wearables Market Development

This trend persisted in the first half of 2023, as longer replacement cycles and a lack of compelling features suppressed demand. The overall wearables market will rebound, reaching 689.33 million shipments by the end of 2028, with a CAGR of 11.3 percent between 2023 and 2028, according to the latest study by ABI Research.

In 2023, the wearable market is projected to grow by approximately 10.2 percent, with shipments expected to exceed 400 million units. The market is forecast to recover in the latter half of 2023 and continue growing in the subsequent years, driven by expanded use cases and ecosystem integration.

"Advancements in areas such as connectivity and integrated sensors, followed by the availability of advanced features at low price points and user upgrades, will help drive consumer interest and result in the growth of the wearables sector in the coming years," says Sachin Mehta, senior analyst at ABI Research.

In the first quarter of 2023, the smartwatch and activity fitness tracker sectors experienced year-over-year declines of 3 percent and 9 percent, respectively. These declines were primarily due to seasonal factors and an excess inventory buildup in the channel.

The smartwatch market has been evolving with new use cases, features, and sensors. Emerging countries, particularly India, offer significant growth potential, with India contributing one in four smartwatches shipped globally.

Smart Rings, a newly tracked category in wearables, have experienced a recent surge in demand, promising to drive future growth in the wearables market.

In 2022, 17.2 million smart rings were shipped, and this is projected to grow by 10 percent, reaching 18.9 million units in 2023 and exceeding 50 million units by the end of 2028, with a CAGR of 21.9 percent between 2023 and 2028.

Despite being a niche and relatively new segment compared to other wearables, smart rings have great potential, serving various use cases such as contactless payments, access control, health tracking, and smart home integration.

However, their higher cost due to premium materials, advanced sensors, and some models having additional monthly subscriptions make them relatively expensive for the masses. Introducing 5G in wearables and accessories will be pivotal in this market's evolution.

Real-time data transmission and processing capabilities will unlock a wide range of new functionalities and use cases for wearables with 5G wireless network connectivity.

Healthcare will be at the forefront of this transformation, with exciting prospects for remote patient monitoring and advancements in fitness applications. As a result, high-end wearables sales are likely to experience a surge in the coming years due to increased demand for advanced use cases.

Outlook for Smart Wearable Applications Growth 

"Although it may take some time for 5G Advanced and the 5G RedCap feature to fully integrate into devices like smartwatches, TWS headsets, and personal tags, once it happens, there will be a noticeable incremental jump in shipments within this sector, Mehta concludes.

According to the ABI assessment, the implementation of 5G technology is expected to have a significant impact, revolutionizing wearable capabilities and driving further market growth.

That said, I believe we may soon experience new use cases of artificial intelligence (AI). Generative AI on wearable products could enhance the utility with new Smart features that add value to these devices.

The Wearable AI market is still in its early stages, 5G-enabled NLP has the potential to improve the way we interact with apps. As the technology evolves, we can anticipate more useful wearable devices.

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