Wearable Sales: $14 Billion This Year, $34 Billion in 2020; Wrist Worn Devices Rule

• by Chuck Martin , Staff Writer, February 24, 2016

While many Internet-connected wearable devices are hitting the market well into the foreseeable future, where the items will be worn and what types they will be is pretty wide ranging.

Even though fitness trackers and smartwatches are the most popular, consumers will be wearing billions of dollars’ worth of connected things on various parts of their bodies.

And the number of wearables hitting the market globally already is well into the millions, as I wrote about here this week (Wearable Market Grows 172% In A Year; 78 Million Devices Shipped (21 Million Fitbits).

And there’s money in selling wearables. The value of wearables sold this year will reach $14 billion, climbing to $34 billion by 2020, according to a new study.

Wrist-worn devices lead the market, with fitness activity and sports trackers accounting for 60 million units, almost half of the devices shipped in the next 12 months, according to the forecast by CCS Insight.

With 22 million smartwatches having sold last year, this year’s projection is for 30 million watches, led by Apple, as every study on the subject I’ve seen concurs.

From a sales dollars standpoint, the biggest money this year will be in smartwatches and smartphone companions, with the picture changing over the next few years. Here are the dollars to be spent on the 123 million wearables projected to be bought this year:

• $6 billion – Smartwatches and smartphone companions
• $4 billion – Fitness, activity and sports trackers
• $2 billion – Wearable cameras
• $2 billion – Virtual and augmented reality headsets

However, the situation in 2020 will be different, with sales of smartwatches falling behind the money spent on virtual and augmented reality headsets. Here’s what spending on the 411 million wearables to be sold in 2020 looks like:

• $15 billion – Virtual and augmented reality headsets
• $11billion – Smartwatches and smartphone companions
• $6 billion – Fitness, activity and sports trackers
• $2 billion – Wearable cameras

The other change between now and 2020 is where devices will be situated on bodies. While wristbands still will be the top device, there are others. Here are the numbers of devices to be sold in 2020, according to CCS Insight:

• Wristbands – 164 million
• Watches – 110 million
• Eyewear -- 97 million
• Wearable cameras – 25 million
• Hearables – 9 million
• Tokens, clip-ons and jewelry – 4 million
• Other – 2 million

This also looks like it will be a pretty good year for virtual reality, with sales of dedicated VR headsets to reach nearly $1 billion by the end of the year.

The challenge for marketers is to determine the messaging and interactions that will be best suited for the technology being worn and learning the best times, locations and context for that messaging.