SmartWatches Still Forecasted to Be a Huge Market by 2018



Screen shot 2014-05-01 at 4.18.40 PM


In September 2013, when Samsung and others had  first announced their wearable smartphone products (see our posting dated 09/12/13), the price was $300 per unit.      Business Insider Intelligence at that time was predicting the market for smartwatches would be $9 Billion by 2018.  We postulated that $300 per unit was a prohibitively high price, and doubted the unit volume in the BI forecast.   BI has now released a new market forecast, and it is based on an average per-unit price of $100.Nevertheless, the total market forecast remains constant at $9 Billion.    And now they’re beginning to talk about the importance of “attach rates,”  which refers to how many smartwatches can be sold as an extension of  its smartphone. ( Hardware manufacturers used to focus on he attach rates for maintenance agreements, especially on PC products, which had thin margins.)    People seem to dislike the bulky  size of the smartphones, so newer products will have smaller screens.  This puts  pressure on the development of apps that fit the smaller screen, so we may see a trade-off ratio of size and price versus functionality, and  the new cheaper models may not have enough value to justify even the  $100  price.  We’re still skeptical.

Leave a Reply

Your email address will not be published. Required fields are marked *