All those wearable devices hitting the market are going to make a lot of people flithy rich.
The wearable devices industry, which includes smart watches and glasses, will be worth $19 billion by 2018. That’s a big jump over the $1.4 billion the industry is expected to pull in this year, according to Juniper Research, which produced the numbers.
Why such massive growth? Juniper points to two factors: consumer demand and the rise of subscription services.
The latter is particularly key. While most wearables are being sold solely as devices right now, it won’t be long until every wearable maker also offers a separate service component to generate recurring revenue. Consider devices like the Filip, a kid-friendly smartwatch that can also make phone calls. By teaming up with AT&T, Filip is creating an extra revenue stream that goes beyond just device sales.
In other words, hardware + demand + services = $19 billion.
Juniper’s Research comes not long after fellow research company Berg Insight estimated that wearable device sales will climb to 64 million by 2017.
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“A perfect storm of innovation within low power wireless connectivity, sensor technology, big data, cloud services, voice user interfaces, and mobile computing power is coming together and paves the way for connected wearable technology,” Berg analyst Johan Svanberg wrote earlier this month.
The two research firms, it seems, are very much on the same page.
Svanberg, however, took Berg Insight’s observations further and argued that, in order for the wearable industry to see those big numbers, companies first have to create multipurpose devices that can also stand on their own.
The point is a valid one. One of the biggest issues with Samsung’s Galaxy Gear (which we aren’t fond of) is that the device needs to be connected into a smartphone in order be truly useful.
But does the rise of multipurpose devices also that mean we’ll see fewer devices like the new Nike+ Fuelband SE, which is very good at fitness tracking but not much else? Probably not.