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Wearable Devices SAMPLE PAGES: Devices for the Wrist: Ecosystems Crucial to Growth of Connected Watches and Bands November 2014 Report price: US$ 3,495.00 Jan ten Sythoff | Analyst at Large Ozgur Aytar | Research Director Summary “Devices for the Wrist: Ecosystems Crucial to Growth of Connected Watches and Bands,” a Research Report by Pyramid Research, examines the high growth opportunity which wrist-worn wearable technologies provide, how the ecosystem is developing, positioning strategies of the key industry players, and the launched and announced products to date. The report provides 5-year projections for shipments and revenue by device segment and global installed base. The analysis is built around Pyramid’s wrist- worn product database of over 70 models, mobile industry forecasts as well as end-user research conducted across several Western European countries and a global survey of over 200 industry players. 2 Key findings • Following several decades of false starts, wrist-worn with a particular focus on improving battery life. technology is becoming an enormous new opportunity: • Highly functional smart watches will be dominated by the shipments for wrist-worn devices are expected to grow existing smartphone platforms, but there are also by nearly sevenfold in 2014 and threefold in the opportunities for devices with lower functionality, following year. Technology developments, high particularly for the traditional watch manufacturers, for smartphone penetration rates, new applications and the whom typically design comes above functionality. availability of well-designed, easy-to-use devices are • Fitness and health applications will be a key driver for some of the key drivers behind this growth. wearables. Many large technology companies are looking • The variety of products available has ballooned, with at cloud based health services as an important new different designs, capabilities and brands, but the entry revenue opportunity. of Apple into the market in 2015 will be the key catalyst • Bluetooth is the connectivity technology of choice today; for growth. Wi-Fi drains batteries quickly but enables independent • Manufacturers face multiple challenges in developing a connectivity and could introduce new opportunities, smart watch that is attractively designed and balances particularly for mobile operators. We expect that NFC will functionality with the right combination of user make the biggest impact, opening the door to new interfaces. Furthermore, there is an inherent trade-off applications, particularly in the areas of access control, between functionality and battery life: typically, loyalty, payments and travel. technology vendors such as Apple and Samsung favor • By 2019, we are projecting shipments to grow by 13-fold functionality and have had to develop innovative ways in from its 2014 level, with more than 10% of the global which the user can interact with the device. Traditional population wearing a connected wrist-worn device. watch manufacturers such as Casio and Citizen prioritize While the market is expected to be triggered by the Apple battery life and limit functionality. In between are a broad Watch, at the same time lower cost devices will also drive range of different possibilities to meet different needs the market as chipset and component prices fall; and tastes. furthermore, the price of connected bands will fall • There remains significant potential for product dramatically as new business models become established. development and improvement, particularly as the chipset and technology suppliers improve their products, 3 Report methodology The “Devices for the Wrist: Ecosystems Crucial to Growth of Connected Watches and Bands” report comprises business model analysis, market sizing and demand analysis and trend analysis for wrist-worn device market. Insights and data are derived through a mix of primary research, secondary research as well as quantitative modeling for sizing the market opportunity. The report draws on a total of three surveys and panels that gauge the status and expectations of both end-users and industry participants, including a survey of over 200 telecommunications and technology professionals conducted by Pyramid Research in August-September 2014 as well as a European technology end-user panel in Germany, Italy, Spain and the UK in July 2014 and a UK wearable technology end-user panel from January 2014, both of which were conducted by our sister company, Canadean Consumer. In addition to these surveys, Pyramid conducted interviews with key players in the market to support its analysis of the evolution of the ecosystem and business models and development of a database of 70 wrist-worn devices. This effort was supplemented by secondary research, involving the gathering of relevant data and intelligence through publicly available sources, publications, trade associations, specialist databases and company financial reports, presentations and press releases. Pyramid Research developed a model to size the market opportunity that incorporates global historical shipments, revenue and average selling price (ASP) data at the manufacturer level, survey findings on adoption levels as well as vendor plans over the next 18-24 months in the forecast through 2019. 4 Reasons to buy • The “Devices for the Wrist: Ecosystems Crucial to Growth of Connected Watches and Bands” report provides a comprehensive examination the nascent wrist-worn wearable technology opportunity to help executives make informed investment decisions, develop effective partnerships and optimize return on investment. • This report provides a five-year forecast of wrist worn wearable volumes and revenues broken down into three segments, namely bands, smartwatches and cellular watches as well as a population penetration and installed base analysis to enable executives assess growth opportunities and position their companies for emerging trends in demand • The report incorporates a detailed product analysis, highlighting the features, functions, pricing and capabilities of over 70 product models on the market, which provides an in-depth overview of key trends in the wrist-worn device market for any stakeholder and should support vendors in developing competitive strategies as well as differentiation. • Survey data is included into the analysis, including both end-user awareness information as well as the results on an online industry survey to assess the industry’s position and expectations of the market opportunity. 5 Table of contents Table of contents 2 III. Product segmentation and pricing Table of exhibits 4 i. Smart watches Executive summary 6 ii. Bands Introduction 10 iii. Cellular-connected smart watches I. Report scope, definitions and segmentation IV. Product challenges II. Survey and panel overview V. Product analysis Section 1: Market overview and background 14 i. User interface I. Overview of wearables and connected watch opportunity ii. Interactivity and functionality II. End-user awareness iii. Android Wear user interface III. Industry expectations iv. Design IV. Watch market overview v. Battery life V. Smart watch history vi. Functions and applications Section 2: Analysis of the smart watch ecosystem 22 vii. Android Wear applications I. Smart watch ecosystem overview, brand positioning and key VI. Product positioning: Price versus functionality takeaways VII. Product connectivity II. Application developers: Positioning strategies i. Wi-Fi i. Runtastic ii. NFC V. Traditional watch manufacturers: Positioning strategies Section 4: 5-Year forecast of wrist-worn device shipments, revenue and i. Swatch installed base 64 ii. Casio I. Key forecast assumptions VIII. Smart watch platforms/vendors: Positioning strategies II. Industry survey results: Population penetration expectation for i. Google 2019 ii. Samsung III. End user awareness iii. Apple III. Product availability XII. Mobile network operators: Positioning strategies IV. Wrist-worn device shipments by segment i. AT&T V. Bands: Shipment and revenue forecast ii. NTT Docomo VI. Cellular smart watch: Shipment & revenue forecast iii. Swisscom VII. Smart watches: Shipment and revenue forecast XVI. Chipset and component manufacturers: Positioning strategies VIII. Global installed base and penetration forecast i. MediaTek Appendices 75 Section 3: Assessment of wrist-worn products 44 Companies mentioned I. Key takeaways Sources and related research II. Product and manufacturer overview About Pyramid Research 6 Table of exhibits Product count by segment 10 Smith Optics I/O Recon connected goggles 40 Overview of survey and panel surveys 11 Apple S1 SIP and Qualcomm TOQ Smartwatch 41 Survey respondent breakdown by company type 12 MediaTek LinkIt overview 42 Survey respondent breakdown by region 12 Manufacturer breakdown by type 45 Smartphone penetration in selected markets, ye 2013 14 Prices by segment: low, average and high 46 “Which of the following have you heard of?” 15 Yingqu InWatch One, Garmin Forerunner, Tomoon Fire 47 “Which of the following wearable technologies have you heard of?” 16 Sony Smartband Talk, Jawbone Up24 48 “In five years time, what level of population penetration do you expect to Filip, hereo and Tinitell wristphones for children 49 see for wearable connected devices (in your country)? 17 Samsung Gear Live, Timex Ironman One GPS+ 49 “Please rank the following types of wearable devices in the order of how “How important are the following challenges that the industry must successful you expect them to be over the next five years” 17 overcome to ensure mass
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