Wearables market: Collapse or explosion?

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Everyone is abuzz about the latest wearable gadget being released--whether it's Google Glass, the Android Wear smartwatch, the latest Fitbit or the mythical iWatch.

But the wearables hype won't last long because their functions will be absorbed by other devices, such as smartphones and sensor-based headphones, predicts James McQuivey.

McQuivey argues that new devices often rise to prominence and then "collapse" into specialty niches. He cites the PDA, digital camera, MP3 player and eReader as examples. Forrester predicts that the number of eReader users will drop from a high of 25 million in 2012 to only 7 million by the end of 2017.

McQuivey forecasts a similar fate for wearables, as well as home automation and control systems, virtual and augmented reality, 3D printing and drones.

Not everyone agrees with McQuivey's analysis. Juniper Research is predicting that shipments of smart wearable devices will jump 10 fold, reaching 130 million units by 2018, and that market revenues will reach $19 billion by then, up from $1.4 billion last year.

"Even though wearables are relatively new in terms of market maturity, it is clear that the market, for example the smart watch in particular, will be--as per smartphones--a somewhat crowded affair," says Juniper analyst and report author Nitin Bhas.

In the enterprise, ABI Research forecasts that the wearables market will generate $18 billion in revenue by 2019. "Wearable technology such as smart glasses and those used for healthcare are better suited for the enterprise as corporate-liable devices. Smartwatches, on the other hand, will most likely follow the trend of BYOD into the enterprise," says senior enterprise analyst Jason McNicol.

There are certainly factors holding back wearables, such as a compelling use case, cost and, in the case of Google Glass, privacy concerns. But Forrester's prediction that the wearables market will collapse seems to bit extreme. The truth lies somewhere between collapse and explosion.

For more:
- see the Forrester release
- check out the Juniper release

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