Smartwatch Forecast: Smartwatch Market to Hit 15 Million in 2014

We released a new report over at our sister research site, NextMarket Insights, on the smartwatch market. The report, which can also be found here (including a free copy of the executive summary) is the first to comprehensively forecast the smartwatch OS, apps and standalone vs. companion models through 2020.  

The press release is below, but I'll more on it later. I also talk about the forecast in the Smartwatch Week That Was podcast for this week as well. You can subscribe to that podcast (the only podcast I know of that is focused exclusively on smartwatches) here in iTunes.

Press release:

 Smartwatch Market Forecast to Grow From 15 Million in 2014 to 373 Million by 2020

Seattle - According to a new report from NextMarket Insights, the growing adoption of smartwatch software and wireless technologies by traditional watchmakers, the continued advancement of screen and mobile processor technologies and the strong expansion of smartwatches in the children and health/active lifestyle segments will drive the overall smartwatch market from 15 million watches shipped in 2014 to over 373 million by 2020.

"The watch industry ships over 1 billion watches a year, and there are nearly 7 billion mobile subscribers worldwide today," says Michael Wolf, Chief Analyst. "We believe the smartwatch category can become a substantial market opportunity even with fairly modest penetration of the broader mobile and watch-wearing public."

While most smartwatch market outlooks have focused almost exclusively on companion smartwatches, NextMarket Insights believes standalone smartwatches will also see substantial growth. Standalone smartwatches are those smartwatches with fully functional calling and data communication capabilities. In 2013, numerous Chinese smartwatch manufacturers released Android based standalone smartwatches, and western manufacturers such as Filip Technologies and Omate will ship products this year.

"We believe native voice and data capabilities in smartwatches will be attractive to a segment of the market," says Wolf. "Both for those who would use it in backup and lifeline scenarios, as well as those who see might see a smartwatch as a replacement for a phone in certain use cases common in the youth and active lifestyle watch segments."

The growing smartwatch market will lead to a fast maturing market ecosystem, across the hardware, services and software layers. In software, today's smartwatch manufacturers utilize existing smartphone OS's such as Android and new software frameworks on top of lightweight operating systems such as FreeRTOS and .NET Microframework. 

"Going forward, we see the smartwatch market coalescing around three major software camps," says Wolf. "The vast majority of smartwatches will be built using existing or modified versions of Android, new smartwatch operating systems such as the Pebble OS, and - assuming that Apple ultimately gets into the market - iOS."

The report, Smartwatch Forecast 2013-2020, from NextMarket Insights is the first comprehensive forecast of standalone/companion smartwatches, smartwatch OS's and smarwatch APPs. The report is available today for $499 for the single report, and for $899 for an annual subscription which includes four quarterly forecast updates and a briefing with a NextMarket Insights analyst.