What’s the Market Size for Wearables? Bigger Than You Think, says CES Expert | Cypress Semiconductor
What’s the Market Size for Wearables? Bigger Than You Think, says CES Expert
LAS VEGAS – At this year’s International CES, wearable fitness devices are hotter than a Las Vegas summer, with demos and new product introductions coming from Skechers, Magellan, Garmin, Qardio, Valencell, 4iiii Innovations, SenseGiz, Mayfonk, Reflx Labs, and others.
But what does that buzz add up to in the real world? According to Kevin Tillmann, senior research analyst for the Consumer Electronics Association (CEA), in 2014 it means a billion-dollar market appealing to millions of Americans. And that’s only scratching the surface of the category’s potential.
Broadcom has tapped into the power of this market and, this week at CES, has talked up the benefits of its WICED platform, which enables the makers of wearable fitness devices to easily integrate low-power, cost-effective connectivity into their gadgets.
A Billion Dollar Market
In a special session held this week at CES, Tillmann estimated that the wearable fitness market will top $1.15 billion this year, up 35 percent from last year.
Amazingly, some 75 percent of US adults already own a health and fitness device, if you include things like pedometers, fitness video games, portable blood-pressure and heart-rate monitors, fitness apps, digital sports watches, and scales. That’s up 12 percent from 2012, but the real story, Tillmann said, is that while only 9 percent of Americans own a dedicated fitness device, that’s triple the 2012 figure.
Who’s Buying These Devices, and Why?
According to the CEA’s research, wearable fitness devices owners are predominantly male (60 percent) and often young (56 percent are under 34). Some 43 percent earn less than $50,000, which may reflect their relative youth, while 36% represent a more affluent segment earning more than $75,000 a year, who may be more aware of their own fitness goals – and have the scratch to purchase these relatively expensive products.
Tellingly, 67 percent of fitness device buyers are already getting regular exercise, compared to just 40 percent of the general population. Some 57 percent of people who plan to buy these devices exercise regularly. That means fitness wearables are not yet motivating couch potatoes to use them to get moving.
Still, most buyers are satisfied with their purchases: almost half use them daily, and another third use them several times per week.
A Special Case for Smartwatches
While fitness tracker buyers overwhelming said they wanted to wear these devices on their wrists, the equally hyped smartwatch market is still nascent. (CES also saw debuts of new smartwatch designs, many in the WristRevolution Pavilion.) Estimated to grow a whopping 86 percent in 2014, the smartwatch market is expected to tally a modest $177 million, Tillmann said.
Last month, Pebble Technology Chief Executive Eric Migicovsky predicted at a Broadcom pre-CES event that wearable tech will only take off when such devices like the smartwatch can “mesh with everyday life.”
Pebble got its start with a duct-taped-together prototype and a crowd-funding campaign that ultimately raised more than $3 million.
Still, he said, smartwatches — or other wearable gadgets not yet invented — are only as good as their utility to real users, not just futurists and hobbyists. Not only will they tell time, but also should provide us with a very portable, convenient interface for all consumers’ favorite apps.
Like fitness wearable users, smartwatch buyers also tend to be young, Tillmann said, but skew much more affluent, possibly due to the high price points of many of the current choices. And he questioned whether the extra costs involved in smartwatch screens and custom interfaces really make sense in a world where people already carry smartphones that do many of the same things.
Broadcom showed off a Samsung Galaxy Gear Smartwatch earlier this week at a media-only CES event, where one of its executives talked about how he uses it to track his mountain biking stats.
Watch the video here:
The International CES continues in Las Vegas through Friday.