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Futuresource Consulting, the specialist research and consulting company, is delighted to be the official knowledge partner for CEATEC JAPAN. The company can trace its roots back to the 1980s and provides market insights into consumer electronics, digital imaging, entertainment media, broadcast, optical manufacturing, storage media, professional IT and education technology.
With more than 70 full-time employees providing in-depth analysis and forecasts across consumer and professional electronics categories, Futuresource is able to advise on market, competitive and technological developments, providing clients with access to the information that helps produce the best possible results.


9 January 2015
The Real Scoop on International CES - Wearable Tech:
Futuresource Consulting

With International CES well underway and a team of Futuresource analysts walking the halls and reporting their findings in breakfast webinars, this release is the first in a series that explores some of the key technologies on show and provides Futuresource market forecasts for the relevant CE segments.

Futuresource Estimates for Full-Year 2014 Worldwide Wearables Shipments:

Activity Trackers 16.8 m
Pedometers and Footpods 11.4 m
GPS Trackers 10.2 m
Smartwatches 6.1 m
Heart Rate Monitors 6.0 m
Wireless Watches 0.6 m
Head-Mounted Displays 0.5 m

2014 was the breakout year for wearables, with the primary category driver being sports and fitness applications. Fitness devices remain the largest product category, while activity tracking is one of the most prominent features of most smartwatches. However, fitness band announcements were largely absent from CES announcements.

"The US currently leads the way in the two big emerging wearables categories - activity trackers and smartwatches. The US is typically an early adopter market, and also a very Apple-centric market, as well as being the biggest per capita spender on health and fitness," says Oliver Rowntree, Market Analyst, Futuresource Consulting. "Here at Futuresource we expect to see large category growth with the release of the apple watch later this year.

"Consumer research we carried out in May and October with more than 8,000 respondents across the USA, UK, France and Germany, saw the proportion of respondents intending to purchase wearable devices in the next 12 months rise from 10% in May to 16% in October 2014. The most marked change since May was the strong growth in the number of iPhone owners intending to purchase wearable devices. iPhone owners now lead the way in all categories - particularly in smartwatches, which 17% of iPhone owners expressed intent to purchase in the next 12 months, up from only 6% in May 2014."

As products converge and heart rate and fitness features become embedded into other devices, the fitness segment will begin to deflate, with much of the market being captured by smartwatches.

Shipments of dedicated fitness devices will grow less than 25% between 2014 and 2018, whereas shipments of connected watches will increase by more than 1100%.

Worldwide Shipments of Ddedicated Fitness Devices 44 m54 m55 m
Worldwide Shipments of Connected Watches 7 m38 m83 m

Additional novel applications for smartwatches beyond fitness were showcased by car makers, including Hyundai - which demonstrated driver alertness tests - and Audi, with car control via a customised LG watch. As a smartwatch on the wrist will always know where you are, car and smart home control are natural progressions for the smartwatch category.

However, with many smartwatches struggling to stay charged for even one day's use, there need to be major breakthroughs in power management to ensure serious traction of the category.

"It's worth noting that the market isn't just about the devices - it's the services and apps people are using in conjunction with them," says Rowntree, "as this will determine how they are being used, and what the level of uptake is. The future growth of the category will be determined by whether killer applications develop beyond fitness: such as augmented reality, life logging and communications."

There are many announcements of smart headphones at International CES, with 7% of all headphones now having wireless connectivity built in, and a 10% increase in average price year-on-year. Additionally, unlike smart head mounted displays and smart glasses, there is no product stigma attached to wearing headphones.

The new Bragi Dash earphones are particularly tech-packed, available in April they will have the ability to track distance travelled, speed, steps, altitude, heart rate, body temperature and calories, and include a microphone for voice calls and music playback with 4GB of onboard memory.

"As we move forward, post-CES, the largest categories will come from beyond traditional CE, as the experts in wearables are not necessarily CE vendors, they are fashion houses and lifestyle brands that can more readily align with consumers' aspirations," says Simon Bryant, Associate Director of Consumer Electronics at Futuresource. "Brands must continue to seek sophistication to differentiate in the wearables space and the industry needs to stop thinking of wearable devices simply as CE devices that are worn on the body.

"Smart garments will significantly disrupt dedicated wearable devices as we progress towards a mainstream consumer acceptance of wearables."

Futuresource currently tracks seven wearable product categories: activity trackers, wearable GPS trackers, dedicated heart rate monitors, other fitness devices (including pedometers and footpods), smartwatches, wireless watches and head-mounted displays.

Key International CES Announcements

There are wearable tech product announcements all across International CES this year. Here are just a few of the products.

Intel covered a number of hot topics in its keynote. A tiny computer module for smart clothes, 'Curie' will include Bluetooth radio and will come to market at the end of 2015. Smart clothing and wearable technology are clearly an area of focus for Intel; it is working with Oakley on smart glasses. It also provided an entertaining drone display, which highlighted its ability to avoid obstacles. Intel chose not to mention IoT, instead focusing on demonstrating more tangible products & technology.

HearNotes has created what it claims to be the first premium WireFree earbuds based on Kleer Bluetooth technology with its Universal Edition range. HearNotes specifically states it is going to give the premium consumer brands such as Beats and Bose a "run for their money", but playback time is just four hours.

Qualcomm covered many sectors at its press conference, including the new LG G Flex 2 as its first handset to include its Snapdragon 810 processor. It announced its AllPlay smart media platform has new additional hardware manufacturers supporting the platform, including Bayan Audio, Goodman, house of Marley, Inkel/Sherwood, Optoma Nuforce, SVS, TCL and TP-LINK. Four new music/audio services have also pledged that they will integrate AllPlay into their music streaming offerings, bringing the total number of services to 18.

Car manufacturers are demonstrating vehicles that incorporate Qualcomm's Snapdragon automotive platform, which allows software upgrading in vehicles and wireless charging.

Qualcomm also stated its success in the wearables market, with 15+ products in 30+ markets incorporating Qualcomm technology and smartphones a particular sweet spot. Other areas of discussion included healthcare and smart home.

Gibson has unveiled a celebrity endorsement with Usain Bolt for its new Trainer fitness headphones. They will cost $239 a pair and include safety lights, climate regulating cushions and have Bluetooth compatible. They will launch in stores in April.

Lenovo presented its entry into the wearable space, the Vibe Band VB10 with E-ink display and long battery life.

Sony's new headband Walkman, the Smart-B Trainer, is a waterproof running device with built-in GPS that also uses a heart rate sensor in one earpiece to measure whether you need to speed up or slow down.

Pacif-i Smart Pacifier from Blue Maestro is a dummy/pacifier that records a baby's temperature and passes it to a smartphone where it can be tracked and medication recorded. It also includes the ability to find the pacifier with a smartphone as well as a proximity feature that alerts a smartphone if the pacifier moves away.