The release of the Apple Watch on 24 April 2015 is expected to ignite interest in wearables as well as accelerate sales of wearable devices in Australia. Frost & Sullivan's new report, Australian Wearable Technologies Report 2015, forecasts a CAGR of approximately 78% for the period 2014 to 2018, with revenues expected to reach $1 billion by 2018. Mergers and acquisitions and cross industry collaboration will be a key feature to drive the next level of innovation in the wearable technologies market.
“Key players are likely to be Apple, Google and Samsung. These vendors don't just contend within the wearables market, but are building a larger ecosystem of products and services across home automation, home entertainment, home security, glass, wristbands and heads unit displays, as well as an ecosystem of products across mobile devices and home appliances,” said Wonjae Shim, Research Analyst, ICT Practice, Frost & Sullivan Australia & New Zealand.
This growth will be contributed to by a combination of factors; including innovation from local startups, high levels of activity in mergers and acquisitions and competition amongst global players such as Google and Apple as each attempt to dominate the market for the Internet of Things in Australia.
In 2014, the consumer wearables segment accounted for 99% of total wearables revenues. Australian culture places an emphasis on fitness and sport, and as such, consumer wearables such as FitBit, JawBone and other health and fitness trackers are immensely popular. Demand for these products is likely to increase even more over the next five years, so the consumer segment is expected to account for a substantial part of overall revenues over the forecast period.
In the enterprise (business) segment, Frost & Sullivan expects significant enterprise adoption of wearable technology from around 2017 as several companies, especially in the Mining and Oil & Gas industries are already looking to trial wearable products. The advances and innovations in software will allow businesses to harness and leverage wearable technologies beyond the current capability of wearable devices.
The Key challenges to mass adoption of wearable devices include technical impediments such as security, battery life, miniaturization of embedded sensors, wearable data management and interoperability and compatibility among competing vendors and platforms.
Source: Frost & Sullivan