With wristwear heading to ~$100 Bn sales revenue and emerging companies leaning towards Direct-to-Consumer strategies, a potential revenue opportunity worth $250 Bn is expected to be created in the wearables space.
The global wearable technology market is projected to be valued at $265 Bn by 2026, more than half of this growth is contributed by the consumer electronics segment. This growth is attributed to the demanding lifestyle in developed and developing countries as well as increasing advancements in wearable products such as smart goggles, wristbands, and smart shoes.
Adjacent markets hold a potential of over $125 Bn in wearable technology, majority of which will be contributed by wearable payment devices and wearable healthcare devices.
According to MarketsandMarkets analysis,
- $250 Bn of potential opportunity is opening up as wearables to $100 Bn sales revenue, of which AI-based virtual assistance was one of the most talked-about trends in 2021.
- Wearable technology market is estimated to grow at a healthy CAGR of 18-20% in the coming 5 years, driven by rising popularity of IoT and connected devices and growing consumer preference for sleek and compact devices in fitness and healthcare applications.
- We are witnessing increasing adoption of AI, IoT, contactless payments, health tracking etc., which can disrupt the demand for wearable devices, in turn impacting the growth of the market.
- It is predicted that by 2026, there will be 1.2 billion wearable products shipped worldwide.
- Currently, businesses have low access to primary intelligence to clarify some unknowns and adjacencies in these opportunity areas –
- Adoption levels of automation in wearables is low. Currently, it ranges between 30-40% globally, however, in developed countries it is approaching 50%. As automation reduces TAT and helps in minimization of errors and provides reproducible results, it is largely used in consumer electronics and healthcare applications
- Increasing focus on personalized health tracking drive the wearables market
- Markets such as wearables in healthcare, wearables in automotive, and wearables in manufacturing provide immense growth opportunities, owing to rising popularity of IoT and connected devices
- In target enrichment, developed countries use compact devices are mostly preferred
Some of the growth problems encountered by wearables companies are:
- Customer prioritization and assessing unmet needs:
Where to play:
- What are the disruptions in our clients’ businesses? How can we support them for our own growth?
- Who are the most potential customers going forward? Should we prioritize consumer electronics, healthcare, enterprise & industrial applications, or aerospace & defense companies?
- What are the key unmet needs of customers? Who are the key stakeholders in different settings? Do vendor selection criteria differ by settings? Which new product features should be added to the existing products?
Building a compelling Right-to-Win (RTW):
- Which applications and technologies should we focus on? Should it be AR/VR, smartwatches, smart bands, or any other?
- Which regions should we place our bets on? Should we continue with developed countries or do developing countries offer more growth opportunities?
- For M&A, which are the right targets for us? Should we target AR/VR companies or smartwatches, smart bands companies? Should we enter new markets directly or through partners?
- How can we differentiate from top players? What is their right-to-win vs ours?
Key uncertainties/perspectives which industry leaders seek answers to:
- For Wearable companies:
For Companies in Adjacent markets:
- Which wearable technology will be relevant and redundant in the next 5 years?
- Can wearable devices become affordable?
- How can companies optimize the manufacturing processes to be more agile and efficient to achieve a more features which higher efficiency?
- What regulatory policies can help strategize and achieve higher sales?
- What can be done to increase the awareness of wearable devices in healthcare applications?
- What are the regulations surrounding data privacy and security?
- Which machine learning approaches can be used to address data limitations so that AI models do not lead to misleading insights or faulty predictions?
- How are companies handling machine bias?
- When can a 100% AI integration into wearable devices be expected?
- What will be the impact of automation on wearables market?
Therefore, MarketsandMarkets research and analysis focuses on high-growth markets and emerging technologies, which will become ~80% of the revenues of wearable players from the ecosystem in the next 5–10 years. It helps find blind spots in clients’ revenue decisions because of interconnections and unknowns that impacting clients and their client’s clients.
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