Wearable tech may be the next big thing, but that has yet to be proved.
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A number of companies, including Microsoft with its Band, Fitbit with its Fitness trackers, and Samsung with its Gear watches, have had minor successes. Even more have had outright failures to connect with the public or led noble experiments that capture attention but have not broken through, such as Google with its Glass eyewear.
Despite all the media attention and the hype that the Internet is moving beyond phones and into wearable tech, no company has achieved major success in the category.
That's about to change, however, as a technology giant that can, at least at the moment, do no wrong has just entered the field. Apple may not validate wearables as an industry, but it's almost certainly going to make its Apple Watch a serious player.
The Apple Watch looks to be the first hit wearable. Source: screen shot.
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How big is the wearables market?
Up until now, growth in wearables has been persistent but relatively slow. That's going to change in 2015, according to the International Data Corporation's Quarterly Wearable Device Tracker. The reports forecasts that "vendors will ship a total of 45.7 million units in 2015, up a strong 133.4% from the 19.6 million units shipped in 2014."
By 2019, IDC predicts that total shipment volumes will reach 126.1 million units, resulting in a five-year compound annual growth rate of 45.1%. Leading that growth will be what the research firm defines as "smart wearables," devices that can run third-party applications, the category in which Apple Watch fits.
"The total volume of smart wearables will reach 25.7 million units in 2015, up a whopping 510.9% from the 4.2 million units shipped in 2014," wrote IDC, which acknowledges that Apple will lead the way.
"Smart wearables are about to take a major step forward with the launch of the Apple Watch this year," said Ramon Llamas, research manager with IDC's Wearables team. "The Apple Watch raises the profile of wearables in general, and there are many vendors and devices that are eager to share the spotlight. Basic wearables, meanwhile, will not disappear. In fact, we anticipate continued growth here, as many segments of the market seek out simple, single-use wearable devices."
Apple won't be the only player -- it will be a rising tide that lifts all boats -- but it's the best bet to emerge as the category leader.
How big will Apple Watch be?
Early Apple Watch sales have been difficult to peg because limited availability and the company only selling them online, has led to lack of availability. Delivery times on most models have been pushed into June or later, and it's hard to know whether the company has a production problem or has kept manufacturing in check to create an appearance of high demand.
At the same time, JPMorgan analyst Rod Hall's prediction that the company will sell 26.3 million watches in 2015, AppleInsider reported. That's a higher number than IDC predicts for the entire smart wearables market.
Hall based his estimates on the forecast that there will be 400 million potential Apple Watch customers by the end of the March quarter, according to the website.. He noted that the watch does require an iPhone 5 or newer and predicted that the Apple Watch would "be on the wrists of 5% of compatible iPhone owners before the end of the year."
Questions on wearables remain
The success of Apple Watch could help other wearable makers and bring positive attention to the category. It's also possible that Apple's success will be singular and unique. The company has a devoted following that makes its watch a viable accessory to its popular phones.
It's possible people are buying Apple Watch because it enhances their iPhone experience. That may not translate into a demand for devices from other companies.
Wearables as a category remain a risk, because no company has proved that people are willing to use them no matter how cool and futuristic they may be.
Apple is the closest to changing that situation, and it's the safest bet for making money in this potentially emerging category of devices.
The article The Best Way to Invest Money in Wearable Tech originally appeared on Fool.com.
Daniel Kline owns shares of Apple and Microsoft. He was once very excited to own a device which was a beeper that received and sent rudimentary text messages. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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