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Wearable device market sees high growth

Posted: 08 Oct 2012 ?? ?Print Version ?Bookmark and Share

Keywords:IHS? wearable technology? Medtronic? Abbott? C8 MediSensor?

According to IHS, the market for wearable technology is set to experience fast growth in the coming years. Last year, 14 million wearable devices were estimated to have been shipped. By 2016, IHS forecasted that the number of available wearable devices will grow to from about 39 million to 171 million, depending upon a number of scenarios, added the market research firm.

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Figure: Global Forecast for Wearable Technology Unit Shipment Based on Different Scenarios (Thousands of Units). Source: IHS IMS Research, October 2012.

Wearable technology includes products that are worn on a user's body for extended periods of time, significantly enhancing the user experience while containing advanced circuitry, wireless connectivity and independent processing capability.

Wearable technology fits into four different categories: fitness and wellness, healthcare and medical, industrial and military, and infotainment.

Fitness and wellness wearable technology products are used to monitor activity and emotions, while healthcare and medical devices monitor vital signs and augment senses. For their part, industrial and military wearable technology receives and transmits real-time data in military or industrial environments, whereas infotainment technology is used to receive and transmit real-time information for entertainment and enhanced-lifestyle purposes.

The low-end forecast presumes wearable technology will be limited by factors such as lack of product availability, poor user compliance and deficient overall enhanced experience. Still, even with these issues, shipped devices could grow threefold between 2011 and 2016.

The midrange scenario presumes market constraints including the lack of reimbursement in medical applications and a paucity in product introductions by major suppliers, accompanied on the positive end by the improved functionality of non-wearable deviceswhich helps explain the bigger numbers over a low-end forecast. This more reasonable adoption scenario means 93 million wearable devices will be shipping in 2016up 6.6 times from what shipped in 2011.

The optimistic scenario is one where significant progress and success has been made in wearable technology, including the introduction of new products and widespread availability from major brands. In this scenario, 171 million devices will shippeda twelvefold expansion from last year.

Notwithstanding the growth figures, these various scenarios reflect continuing uncertainty over the long-term future of wearable technology and the varying factors that affect future outcomes.

The highest revenue-generating areas last year for wearable products were in two segmentshealthcare and medical on the one hand, and fitness and wellness on the other.

In both these segments, continuous-glucose monitors were the highest-grossing device for revenue. The need for continuous data on blood glucose levels, particularly type 1 diabetes patients, has become critical in the treatment of the disease, providing impetus for monitor devices. Medtronic, Abbott and C8 MediSensor are the companies playing heavily in this field.

In the low-end forecast, both segments are expected to continue to account for the highest share of revenue until 2016. In the midrange forecast, infotainment will overtake fitness and wellness to become the second-largest application area in terms of revenue, driven by robust growth in the smart watch market. Healthcare and medical will continue to be the largest application area in both low-end and midrange forecasts.

In the upside forecast, infotainment is projected to account for the largest revenue share of 38 per cent by 2016, driven by the uptake of smart watches and smart glasses.

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