The New Year is now upon us, and were continuing our daily predictions pieces from industry experts on the trends they expect to see in the next 12 months. Today, CCS Insight chief of research Ben Wood shares his predictions for where wearable technology is headed in 2016.

Its hard to believe that, less than three years ago, the wearables market was only starting to emerge. At that time, the most successful wearable technology devices were action cameras such as the GoPro but things changed in September 2013, when Samsung announced its Galaxy Gear smartwatch. The company has gone on to unveil seven wearables in the past two years.

At the time, CCS Insight predicted that wearables would be a segment characterised by a combination of hope and hype, which has proved to be an accurate assessment. As smartphones entered a phase of maturity, manufacturers were hoping that wearables would create new sources of revenue, and relentless waves of hype sprang up as each new device appeared.

The most hype accompanied the Apple Watch, which despite missing sales expectations has well and truly put wearable devices on the map. This is reflected in CCS Insights most recent end user survey, in which about 90 per cent of the 1,000 consumers we interviewed in the UK were aware of smartwatches – a leap from 75 per cent just a year earlier.

However, while smartwatches, and the Apple Watch in particular, are currently grabbing the lions share of the value associated with wearables on a worldwide basis, all the sales volume is coming from fitness bands. About 50m of this type of device will be sold in 2015 alone. Fitbit is the brand thats become synonymous with these products. Reflecting this brand strength and the popularity of Fitbit devices, we predict that by the end of 2017 Fitbit will become the first wearable company to cumulatively sell 100m units.

In an associated prediction, we believe Google will also become very interested in the fitness band category. CCS Insight predicts that in 2016 Google will develop a lightweight version of Android Wear to offer low-cost fitness bands. In a further twist, we expect the first device to use this software platform will be a Google-sponsored product called the Nexus Band. Google simply cant afford to miss out on the data generated by millions of fitness bands to support its knowledge of Google users, to increase their value to advertising sales, and to establish a firmer footing for the Google Fit initiative.

Another area that we believe will have a transformational impact in 2016 is Virtual Reality. The sheer momentum behind this technology is underlined by events such as Facebooks $2bn acquisition of Oculus VR and investments by other consumer electronics giants like Samsung and Sony. The inexpensive Google Cardboard, which pairs with an ordinary smartphone to create a virtual reality headset, has already been experienced by thousands of people. 1m cardboard headsets were delivered to New York Times subscribers, UK mobile network operator EE gave away free units on Black Friday, and Kelloggs has created a version that can be built out of its cereal packets.

Gamings always been seen as the focal point for VR. However, CCS Insight believes that in 2016 therell be a deluge of other material, and predict that by the end of 2016 all major new movies will have a 360° trailer. Movie-makers will benefit from the ready-made publicity vehicle created by the hype surrounding VR experiences. Theyll use the massive distribution networks of Facebook and YouTube, which both support 360° videos.

Star Wars: The Force Awakens is a trailblazing example; it typifies studios approach in creating 360° trailers but not using the technology for the movies themselves. Other categories where virtual and augmented reality will also have a profound effect include travel, education, architecture and design, and retail marketing.

Anyone interested in wearable technology should hold on tight and brace for an exhilarating 12 months. We forecast millions of fitness bands, smartwatches and virtual reality headsets will find their way into Christmas stockings in 2015, building up huge momentum for the year ahead.

Ben Wood is chief of research at CCS Insight