The global smartwatch market could exceed five million shipments in 2014, according to forecasts from research company Canalys.
Canalys estimated that more than 330,000 smartwatches were shipped in 2012, led by Sony and Motorola. The increase in shipments for 2013 is set to be significant, with the research company stating that more than 500,000 units will be shipped this year. This result means that the 2014 expectation of shipments exceeding 5,000,000 will be a 900% increase over forecasted shipments for 2013. In 2013, Pebble Technology joined Sony as a smartwatch market leader.
The explosion in smart phones is expected by the end of next year, with Canalys forecasting that smart watches will grow tenfold as a new generation of devices from the likes of Apple, Google, Microsoft, Samsung and others are launched.
The report also stated that these new generation products will provide more sophisticated software and more elegant hardware than previous models. It described "glanceable information, integration across sensors and hooks into web services" as being key features.
The analysis said that the smart watches will not replace smart phones but will complement them as accessories.
Canalys VP and principal analyst Chris Jones said: "Software platforms tied to smart watches will also be a tremendous opportunity for developers to write apps in categories such as health and wellness or sports and fitness."
The report also highlighted the importance of the hardware design going forward, taking into account the requirement from consumers that these watches are fashionable. It said that once consumers recognise that smartwatches combine functionality and style "the market for traditional watches will quickly be disrupted".
However, the statement also explained that technological challenges remain for those developing these smartwatches, which will need to feature custom software.
Canalys analyst James Wang said: "An effective smartwatch won’t just be a second screen for a smart phone. Creating a competent developer platform specifically for the form factor will be an enormous challenge. Google and Microsoft must execute more successfully than they have done with their tablet platforms and will have to adapt their business models appropriately."
Canalys is an independent analyst firm that provides insight into the future of the technology industry.