App-enabled smart watch shipments are expected to reach 36 million per year by 2018, compared to just over one million this year, according to findings from technology analysts Juniper Research.
Juniper’s latest report, called Next Generation Smart Watches: Market Prospects 2013-2018, found that shipments of smart watches will be driven by a new Multi-function segment, which will be capable of performing additional functionalities such as tracking fitness and sports activities and payments or ticketing, compared to the more limited Dashboard/Console segment. The report said that the Multi-function segment will be propelled by the emergence of companies such as Apple and Samsung.
Juniper’s report contends that the entrance of Apple and Samsung into the smart watch sector – as suggested by recent trademarks and patents – will help to validate the category and act as a catalyst for other competitors to enter the space.
Report author Nitin Bhas stated: “By educating and publicising this device segment to the consumer, Apple and Samsung will indeed act as a catalyst to the market. In addition, being a key influencer, these players’ entry into the smart watch segment will benefit existing smart watch players – providing an increase in awareness and adoption of other wearable devices”.
The report noted, however, that both smart watch categories – Dashboard/Console and Multi-function – will only appeal to a niche demographic when compared to tablets and smartphones for example, dictating that the market potential will be comparatively limited.
The report defines Multi-function smart watches as premium products and said that is therefore differentiates them from existing products such as the Pebble and the Sony Smart Watch. It confirmed that this is expected to result in a multiple price band category similar to the current smartphone market. The statement said: "This means that while the average retail cost for Dashboard/Console smart watches will decline over the forecast period, pricing for the Multi-function devices will remain almost constant".
Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.