Post on 07-Jun-2020
Market ForecastWearables, UK
2016-2020
April 2016 Update
2© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Content
Summary of the wearables forecastSmartphone companions forecastQuantified self forecastWearable cameras forecastAugmented reality and virtual reality forecastWearables categorization
3© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Summary of the Wearables Forecast
4© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Forecast Coverage
CCS Insight's forecast currently covers four main categories of wearable devices: smartphone companions, quantified self, wearable cameras and augmented and virtual reality (AR and VR).– The other categories are at a very early stage of development. For detailed segmentation, please see pages 59-68.
Each category is forecast in three scenarios: core, low and high, as the market is still young and has an elevated level of uncertainty.– The core scenario describes the most likely outcome across all categories, given our current understanding.– A change in one category can trigger changes in other categories.
The summary presents the core scenario for all four categories.– Low and high scenarios for the different categories cannot be added, as significant cannibalization could happen between
segments — a high scenario for one is likely to mean a shift toward the low scenario of another.
We have developed a split by device form in the core scenario.– This is a top-down split and subject to a significant uncertainty owing to the very early days of the market; one hugely
successful product can greatly change the outlook.
The sell-in value forecast is developed at a constant exchange rate of pounds to dollars from April 2016 onward.
5© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Key Messages
The segmentation of wearable devices, largely unchanged since 2015, can be found on pages 59-68.
We expect 5 million wearable devices to be shipped in the UK in 2016, up 33% from 3.7 million in 2015. The sell-in value will reach £0.55 billion in 2016, up 24% from £0.44 billion in 2015.– Quantified self will remain the largest category by volume with 1.9 million devices.– Smartphone companions will remain the largest by value: 1.5 million units worth £0.29 billion.– AR and VR will see strong growth of adoption in 2016, to reach sales of 0.8 million units.
In 2020, 14 million wearable devices will be shipped in the UK, growing at a compound annual growth rate (CAGR) of 30% between 2015 and 2020. The wearables sell-in value will reach £1.09 billion, with a CAGR of 20%.– AR and VR will become the largest category by value in 2020, accounting for 43% of the total wearables value and 30%
of the total wearables volume.– Quantified self will still be the largest category by volume, with 4.8 million units, but will account for just 14% of the total
value.– Smartphone companions will reach 3.6 million units shipped, at a value of £0.37 billion, accounting for 34% of the total
wearables value.
Wristwear will remain the dominant form in volume terms until 2020.
6© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Installed Base of Wearables Will Surpass 30 Million in the UK in 2020
Quantified self is currently the most adopted category of wearables and will remain such until 2019. Smartphone companions saw a big increase in 2015, and will continue to grow, approaching the level of quantified self devices in 2020.AR and VR will see strong adoption, mostly through smartphone VR devices that use the screen, processing power and some sensors of a smartphone. They will become the largest category in 2020.Wearable cameras will still grow but will be the smallest category by 2017, despite being some of the pioneering wearable devices.
Installed base at end of year (M)
1.7 3.2 4.6 5.7 7.3 9.01.7
2.93.8
5.06.3
7.79.3
1.01.5
1.92.4
2.93.3
3.8
1.1
2.5
4.1
6.3
9.6
3.26.5
10.0
14.4
19.0
24.6
31.8
0
5
10
15
20
25
30
35
2014 2015 2016 2017 2018 2019 2020
Augmented and virtualrealityWearable cameras
Quantified self
Smartphonecompanions
11© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Key Assumptions
We expect the smartphone companion market to grow considerably, driven by:– Smartphone companions continuing to offer multiple functions– An emerging clear usage beyond notifications– All key smartphone operating systems supporting wearables– A growing number of apps dedicated to wearables– Proliferation of reference designs– The Apple Watch selling well to the growing number of users with compatible iPhones– Many manufacturers embracing Android Wear– Falling retail prices– Adoption of smartwatches for children
The average replacement cycle is now assumed to be three years.– We assumed a replacement cycle of four years in the previous forecast.– Our extensive first-hand experience with smartwatches and expectation of further innovation in the coming years have
led us to believe that the replacement cycle will most likely be three years. Battery degradation as well as general wear and tear are key factors that will drive replacement sales.
12© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Smartphone Companions: Split into Subcategories
Subcategory Definition Examples of current devices
Basic Low-end smartphone companions with basic functionality, mostly smartphone notifications.
Advanced non-cellular
Mid-range and high-end smartphone companions with multiple functions beyond simple smartphone notifications.
Advanced cellular Mid-range and high-end smartphone companions with multiple functions beyond simple smartphone notifications, and featuring cellular connectivity.
Apple Watch Moto 360 Pebble Time Samsung Gear S2
SamsungGear S
LG WatchUrbane 2nd Edition
Intel MICA
Fossil Q Grant Cogito Classic Ringly Casio STB-1000
Doki Watch
13© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Smartphone Companions in Use Will Reach 9 Million by 2020
In 2020, almost 12% of smartphones in use in the UK will be connected to a smartphone companion. This is equivalent to 13.7% of the population using a wearable device.
Installed base at end of year (M), and as share of smartphone installed base (%), core scenario
0.51.7
3.24.6
5.77.3
9.0
0.9%
2.7%
4.7%
6.5%
7.9%
9.8%
11.9%
0%
2%
4%
6%
8%
10%
12%
14%
0123456789
10
2014 2015 2016 2017 2018 2019 2020
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Scenarios: Drivers of Smartphone Companion Adoption
HIGH SCENARIOLOW SCENARIO CORE SCENARIO
No new uses or value
High retail price
Cultural factors: rudeness of looking at your watch
Complex intellectual property rights situation
Short battery life puts consumers off
Less-costly no-name devices flood the market
Clear uses beyond only mirroring a smartphone screen
Apple Watch drives significant usage scenarios
Smartphone makers differentiate with wearable accessories
Low retail prices: down to £20 or below, or in bundled offers
22© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Quantified Self: Split into Subcategories
Subcategory Definition Examples of current devices
Lifestyle fitness Devices designed to be used every day, all or most of the time. They measure everyday behaviours like walking, inactivity, sleep and calories burned.
Performance fitness Devices designed to measure performance related to specific sports and fitness activities. These are usually running watches, but other examples include models for swimming, golf, weightlifting and hiking.
Fitbit Alta Misfit Shine 2 Jawbone Up3 Xiaomi Mi Band1S
GarminForerunner 225
OMsignalSmart Shirt
Jabra SportPulse Wireless
TomTom Spark
23© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Quantified Self Devices in Use Will Surpass 9 Million in 2020
Almost 3 million devices were estimated to be in use at the end of 2015. By the end of 2020, over 14% of the UK population is expected to own a quantified self device. A clear utility, the growing popularity of an active lifestyle, as well as very affordable retail prices, will drive adoption. Gifting also remains a strong sales driver.
Installed base at end of year (M) and as share of population (%), core scenario
1.72.9
3.85.0
6.37.7
9.3
2.6%
4.6%5.9%
7.7%
9.6%
11.8%
14.2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0
2
4
6
8
10
2014 2015 2016 2017 2018 2019 2020
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Not IncludedIncluded
Hearables: Competitive Landscape
Definition: a hearable is an ear-centric wearable with at least one additional feature beyond audio (a heart-rate monitor, activity counter, step counter or temperature sensor, for example).– The definition addresses devices targeted at consumers, and does not include medical devices that require regulatory
certification, such as hearing aids.– The device needs to be connected to a smartphone by Bluetooth or the headphone jack.Primary uses:– Consumer: music, activity and sports tracking.Key current players: Jabra, SMS Audio (Intel) and Sony. Apple (Beats) may join this category.
Jabra Sport PulseWireless
Sony SmartB-Trainer
Doppler LabsHere
SMS Audio / IntelBioSport
Motorola Hint Samsung Circle
Basic Bluetooth headphones and earpieces
45© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Smartphone Virtual Reality: Competitive Landscape
Definition: smartphone VR devices provide a fully immersive virtual reality experience. They use the screen and processing power of a smartphone, which is inserted into the device.– Some advanced, high-end products like the Samsung Gear VR include sensors, a camera and other enhancements.– Simple cardboard or plastic devices with extremely low retail pricing provide a basic but sufficiently good introductory VR
experience at the low end.Primary uses:– Consumer: gaming, home entertainment and sharing user-generated content.– Enterprise: marketing, tourism and education.Key current players: Google, Samsung, Carl Zeiss.
Samsung Gear VR Carl Zeiss VR One View-Master VR Google Cardboard
48© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Dedicated Virtual Reality: Projected Evolution
2015 2016 to 2017 2018 to 2020 Distant future
Products: availability, functionality, maturity
Early prototypes, developer kits.
First Oculus and Sony devices launched, a small number of other devices following.
More devices, mostly improvements of early models. Good link to major games consoles.
Large variety of products. Socially acceptable.
Pricing High. Oculus sets price at $600.
Relatively stable.
Users Developers, individual enthusiasts.
Gamers, early enthusiasts, trials byenterprises.
Gamers, early enterprise adoption in some verticals (retail and travel, for example).
Adoption beyond gamers. Manypossibilities in enterprise, education and entertainment.
Application or use Gaming, exploration ofother uses, trials.
Predominantly gaming. Predominantly gaming, but also other entertainment content,marketing.
Anything. Immersion can be in daily situations.
Technology Very immature. Developing. Some problems solved, but others in progress.
Third generation. Problems solved. Links to other connected devices.
Development in various directions.
56© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Drivers of low scenario– Not enough engaging content– Poor experience on low-cost VR devices– Prices not falling quickly enough– Health concerns
Drivers of high scenario– Bundling with smartphones– Plenty of attractive content– Viral adoption– Adoption of user-generated 360-degree video– Adoption in education– Adoption in travel– Prices declining even faster than in the core scenario
Smartphone VR: Alternative Scenarios
Sell-in volume (M)Installed base at end of year (M)
0.71.4
2.33.1
4.2
0.0 0.31.0
2.23.3
4.7
7.0
1.7
3.5
5.4
7.7
10.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2014 2015 2016 2017 2018 2019 2020Low Core High
0.40.8
1.0 1.11.6
0.00.3
0.71.2 1.4
1.8
2.9
1.4
1.92.5
3.3
4.4
0
1
2
3
4
5
2014 2015 2016 2017 2018 2019 2020Low Core High
60© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
CCS Insight's Usage-Based Categorization
WearablesWearables
Smartphone companionsSmartphone companions Quantified selfQuantified self
Wearable camerasWearable cameras
Professional sportProfessional sportEmerging wearablesEmerging wearables
HealthcareHealthcare
Augmented and virtual reality
Augmented and virtual reality
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Category Definition and Examples
Smartphone accessories that provide another screen for what is happening on the smartphone and enhance the smartphone experience.Some might have independent cellular functionality. May include some additional features such as fitness tracking or heart-rate monitoring.
Smartphone companionsSmartphone companions
LG Watch Urbane Pebble Time Steel Apple Watch Motorola Moto 360 (2015)
Doppler Labs Here
Samsung Gear S2Motorola Moto 360 (2015)
Doppler Labs Here Ringly
Samsung Gear S2
62© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Category Definition and Examples
Devices to track and quantify fitness, well-being and other activities or aspects of daily life.They need to sync with another device (a smartphone, tablet or PC), typically via Bluetooth.Examples are fitness bands, clip-ons, smartwatches, earphones and smart shirts.
Quantified selfQuantified self
Xiaomi Mi Band 1S Fitbit Alta Basis Peak SMS Audio BioSportIn-Ear Headphones
Jawbone Up3
OMsignal
Misfit Shine
OMsignal
Misfit Shine
63© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Category Definition and Examples
Devices that can be worn or attached to the body and are capable of taking photographs or videos.Some upload content automatically to the cloud through smartphone connectivity.Examples are action cameras and lifelogging devices.
Wearable camerasWearable cameras
Polaroid Cube Pivothead Sony 4K Action Cam
Panasonic
GoPro
Narrative
64© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Category Definition and Examples
Headsets that overlay visual and other information on top of the real world (augmented reality) or create a fully immersive new reality for the viewer (virtual reality).These devices can work on their own (like Microsoft's HoloLens), attach to a PC or other computing devices (Google Glass, Oculus Rift or Vuzix) or provide a shell (possibly with added sensors) for a smartphone, the processing power and screen of which create a virtual reality.
Augmented and virtual reality
Augmented and virtual reality
Sony PlayStation VRRecon Jet Vuzix M300Microsoft HoloLens Samsung Gear VRGoogle Cardboard
Microsoft HoloLens Oculus Rift
65© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Category Definition and Examples
Wearables to quantify or enhance sports performance by providing real-time information.Can also be used for practicing and improving specific techniques like a golf swing.They link to a smart device or process data independently.
Professional sportProfessional sport
Riddell Hits Adidas F50 with miCoach
InstabeatOakley
STATSorts / GPSportsZepp Golf
Reebok Checklight
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Category Definition and Examples
Devices to track medical conditions, state of health and body functions.This is a complex category, with plenty of research and funding.In many countries, these devices typically require approval by governing bodies.
HealthcareHealthcare
Moticon Nuubo Google Xhealthcare smartwatch
Qardio
DexcomNeubac
ReSound
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Category Definition and Examples
New gadgets and concepts that do not fit into any other category, have not achieved any significant volume to date or do not have a clearly sizable addressable market. Over time, these devices will form new categories, join existing categories or fail.
Emerging wearablesEmerging wearables
InteraXon MuseLogbar Ring
Disney PlaymationThalmic Labs Myo
Thync
Bionym Nymi
68© CCS InsightMarket Forecast: Wearables, UK, 2016-2020
Currently Available Products
Product category Eyewear Smartwatch Wristband Token, clip-on, jewellery
Camera Hearable Other
Smartphone companionsQuantified self
Wearable cameras
Augmented and virtual realityProfessional sport
Healthcare
Emergingwearables
CCS Insight www.ccsinsight.comEMEA: Twitter: @ccsinsight North America:Tel: +44 8450 574223 info@ccsinsight.com Tel: +1 408 807 3637
More information about CCS Insight's wearables service can be found at:http://www.ccsinsight.com/our-services/wearables