The growth in wearables driven by premium brands launching over the next 12-18 months will see 100m smartwatches in use worldwide by 2019, as the category is brought into the mainstream customer consciousness.
The prediction comes from a report by Juniper Research, which suggests that differentiation is now shifting from hardware towards other features that allow new capabilities, such as GPS and NFC connectivity. With Apple introducing the Apple Watch and Apple Pay, these functions are likely to become standard over the next few years.
According to the report, high functionality and premium branding means that prices are likely to remain high over the next five years, with the average smartwatch retailing for around $200 (£125).
There is also unlikely to be a 'killer app' for smartwatches in the way that the iPhone defined the development of the smartphone. Early dominant models like the Fitbit, which has been successful in the fitness space, are too specialised to 'break out', and the given the greater scope for development in smartwatches, the industry shouldn't expect a single capability to make or break the category.
As big name international vendors such as Google, Apple, Sony and LG introduce high-end products onto the market, demand for simpler, notification-based watches is likely to drop off, even in budget priced markets. The report suggests that even smaller players will need to respond to increasing consumer expectations, or lose even more market share as large manufacturers push the category forward.