• by Jack Loechner , Staff Writer @mp_research, January 27, 2017

According to a new Whitepaper from Juniper Research, with the launch of the Apple Watch in 2014, Smartwatches have become far more prominent. The trend can be said to have begun with Sony’s Smartwatch in 2012, which had its ancestry in devices like Microsoft’s Smart Personal Objects Technology in 2003. But, no mass consumer adoption of the devices is having an impact on that ecosystem and its future development.

Juniper defines a ‘smart wearable device’ as an app-enabled computing device, which accepts input and processes that input, and is worn on, or is otherwise attached to, the body while being used. This definition includes devices that are both multifunctional and display-only, or dashboard, watches. Multifunctional watches have an on-device OS, while dashboard watches do not.

In the absence of many other uses, many Smartwatch vendors are now shifting their devices toward fitness tracking, says the report. This continues the convergence between Smartwatches and fitness wearables which Juniper observed in its last Smartwatches research.

The price of Smartwatches, typically above $200, is generally not a concern for luxury watchmakers, who have historically always worked in a low-volume, high-margin market with relatively conventional functionality. As a result, there has been far more Smartwatch activity from watchmakers in 2016 than for most CE vendors, says the report.

These vendors have typically applied minimal smarts to the watch itself, while maintaining traditional watch functionalities, allowing the devices to provide much better battery life than most Smartwatches. Fossil’s collection of hybrid Smartwatches claims a 6 month battery life from a traditional watch battery.

This strategy that Smartwatches will be functional as luxury watches, regardless of their smart capabilities, is a way around the lack of clear use cases for Smartwatches.

Concluding, the WhitePaper summarizes these forecasts:

• Device revenues from Smartwatches will grow at a CAGR (Compound Annual Growth Rate) of 13.3% over the forecast period, reaching over $21.5 billion per year in 2021
• There will be an average annual decline of 0.6% in device prices over the forecast period, but it will not be uniform. Multifunctional Smartwatches will take the biggest hits, as demand falls and prices drop in response.  Dashboard Smartwatch prices will rise at a CAGR of 0.6% a year as premium watchmakers enter the category
• With the dominance of Apple in the Smartwatch space, the Average Selling Price of multifunctional Smartwatches will remain above $300 globally throughout the forecast period, with developed markets, and certain markets in the Far East, staying higher

For additional information from Juniper Research, please visit here.