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New Study Shows Use of Smartwatches on the Decline, but Connected Clothing Shows Growth

A new Juniper Research study finds fewer people will be wearing wrist-based smart devices— but they haven’t lost interest in wearables altogether. Connected clothing is set for greater growth in the coming years.

Smartwatches and activity trackers now dominate the market, with 137 million devices expected to ship this year, and the smart wearables market will ship almost 350 million devices by 2020. But Juniper, which provides research and analytics to the hi-tech communications sector worldwide, found that these devices will see a dip in growth, as the life cycle of these devices lengthen and consumers delay repeat purchases.

According to the study, which ranks the fastest growing wearable sectors in terms of shipments, connected clothing will see the largest growth over the next two years. That growth will reach a 102 percent compound annual growth rate (CAGR), as the market sees greater developments with conductive fabric, as well as smart sportswear lines being introduced from companies like Sensoria, Lumo and Under Armour. The sector is expected to ship more than 7 million by 2020, and reach almost 30 million by 2022.

Smart glasses will also see considerable gains at 98 percent CAGR, followed by smart jewelry at 55 percent and hearables at 31 percent. In comparison, smartwatches will stagger behind with only a 31 percent growth.

“A key challenge for wearables is to provide a concrete benefit or unique data,” the research author, James Moar, said. “All our top growth segments either provide in-depth data from specialized form factors, or benefits that do not involve data at all.”

Juniper also concluded that health care shows considerable future growth, given the fact that it’s the largest market for subscription services, with services payable to vendors like AliveCor and Quell exceeding $2.5 billion by 2022. But other categories will have difficulty monetizing data services, with consumer fitness and smartwatch service revenues generating a combined $125 million in 2022.