Wearables by the IHS forecast numbers
Bouchaud provided an overview of a market which the electronics and semiconductor communities are eager will be the "next big thing." However, that makes them susceptible to talking up the opportunity and then believing their own hyperbole.
However we already wear watches, glasses and hearing aids and the first and last of these are already electronic so why shouldn’t glasses go the same ways. It therefore becomes a matter of finding compelling use cases and less a question of if and more a question of when the wearables market takes off.
Hearing aids are the largest wearable equipment category today but by 2018 it will be smart glasses, followed by hearing aids, followed by smart watches. Those three will make up a $20 billion annual equipment market that is two thirds of the total wearables market, IHS reckons.
Sports, fitness and activity monitors may represent the start of the wearable equipment market’s "journey" but with the world’s population aging rapidly health and the reduction of the cost of providing healthcare are set to become the big drivers.
The fitness market is likely to be transitory, in my opinion. A panel discussing wearables at the GSA European Executive Forum agreed that many early-adopter purchases get relegated to the back of a drawer quite quickly.
So this set of suppliers need to bring their best game to the market if they want their wearables to be so compelling that users are prepared to charge or replace the battery and keep on wearing the item and provide repeat business.
But it all makes sales for the component suppliers. Smart watches and smart glasses are set to dominate the market for MEMS in wearable by 2017 when they will claim $110 million of a $135 million annual total available market.
And by category it can be seen that microphones for voice communication and voice control of the equipment is set to surge from a minority today to more than a third of the $135 million annual market in 2017.
Many of these names should be familar but check out number two Measurement Specialties Inc. (Hampton, Virginia) which trades on Nasdaq under the code MEAS. Measurement Specialities has a history of acquiring and integrating sensors
portfolios into its business and expects annual sales of more than $400 million in its 2014 financial year (see www.meas-spec.com)
These two charts show why the MEMS and sensor communities are eager for wearables to be the next big thing. The value of motion sensors being sold into gaming platforms has halved since 2010 and the value of sales into mobile phones and tablets is going to be flat, IHS forecasts.
This is Bouchaud’s take on the sensor hub debate. From zero to 250 million annual units in two years with about third integrated into the application processor and very few combining sensors and hub processing. The leading approach is the largest number of piece parts with the MCU-based sensor hub optimized for low power and to be always on but separate from the sensors and the application processor.
Bouchaud’s conclusion at the GSA event was that the wearable device market will be worth $30 billion in 2018 up from $8.8 billion in 2012. Apple, Google and Intel are investing heavily to try and catch this wave and the first two are powerful enough to be able to drive this market. However, it is likely to be health and professional markets, where there is money-saving potential that will drive the market long term.
He added that wearables are seen as the next big opportunity for sensors after handsets and tablets but these devices are still in their infancy. Power consumption in the devices and in communications with the handset hub is still a big issue.
Related links and articles:
www.ihs.com
News articles:
Wearable computing market on 78% CAGR through 2018
MEMS-based displays enable always-on wearables
Slideshow: Top 10 sensor trends to follow
Six winners from the Wearables World Cup
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