Deloitte has released an interesting set of predictions for 2014, and first and foremost among them is some very good news indeed for the overall wearable technology market. We all saw last week the huge rush of hype over wearable tech, with every day screaming out yet another discovery by the media of this or that bit of technology or devices. That is certainly par for the course for new, nascent or otherwise emerging technology market segments.
But more often than not many emerging tech segments end up haplessly failing to answer the call of "Show me the money." Regardless of last week's endless hype, how will the wearable tech segment itself answer this call?
Well, if Deloitte is to be believed the market is going to answer it with loud clarion calls of success. We certainly don't disagree with this - we remain completely bullish on the market, though we believe it will be 2018 before we begin to see hints of the real dollar potential for it. By then we will not be surprised to see wearable tech begin to approach $50 billion in revenue. Of course that number is a very high upper limit - more accurately we should say we'll see a market size between $30 and $ 50 billion. That is a wide swing of $20 billion but even the low end of the range will represent enormous success.
Given our sense of what the market numbers are likely to be, we were quite pleased to discover that Deloitte, which has an abundance of market data resources to call on, is now predicting and projecting that wearable tech companies will ship in the neighborhood of 10 million devices (or "units" as Deloitte phrases it) that will generate approximately $3 billion in revenue for full year.
Deloitte's prediction includes smart glasses, fitness and activity tracking bands and smartwatches. The prediction comes from Deloitte's just released Technology, Media and Telecommunications (TMT) Predictions 2014 report. TMT has been delivering tech market predictions for over a decade and we like to think of it as a trusted source for estimating units sold and likely total yearly revenue. Of the wearable tech form factors cited, smart glasses will likely generate the most revenues, from sales of about four million units at an average selling price (ASP) of $500. Smart fitness bands should sell four million units, at an ASP of $140, and smartwatches should sell about two million units at an ASP of $200.
Eric Openshaw, Deloitte's vice chairman, and its U.S. technology, media and telecommunications leader, notes that, "Our predictions for 2014 touch on a wide variety of topics, but there is some commonality among them. This can be seen specifically with mobile devices including tablets, wearables, phablets and also rugged devices. These newer technologies allow enterprises and consumers to become more connected, while opening a wealth of new business and communication opportunities. Enterprises that can capitalize on these new market segments will be well positioned for success in 2014 and beyond."
Deloitte also predicts that the total global sales of smartphones, tablets, PCs, TV sets and gaming consoles will exceed $750 billion in 2014 and then plateau as consumer usage will continue to converge. Further, taking an extended look out to 2020 Deloitte estimates that the market for wearable tech will grow to 100+ million devices. At roughly 10 times its 2014 estimate we can extrapolate that reaching at least $30 billion in sales is fair game. We believe however that the dollars will be much greater.
This is all good news indeed for the wearable tech industry as a whole. The one unknown in all of this as yet remains Apple, which continues to take its time in building out what its wearable technology strategy will be. Apple itself is likely to generate enough revenue between 2014 and 2020 to easily help surpass $30 billion by 2018.
Edited by Cassandra Tucker