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Over at NextMarket Insights, we published a new report today outlining our case for why the smartwatch market will be substantially bigger than many of the existing outlooks have it sized at, with a forecast of a 373 million unit market by 2020.
Part of the reason I think most of the current outlooks undersize the market is there is a natural tendency of analysts and forecasters to be conservative. I remember very clearly in 2010 when I created GigaOM’s first tablet forecasts, the consensus forecast for tablets was in the area of 2-3 million for 2010. I knew that since Apple was going big on the device and they had an ability to create new markets unlike any other company, the market would be bigger.
Even with that in mind, I still under-forecasted when I had the market at just over 6 million, and mine was one of the more aggressive forecasts out there. In the end, 2010 saw Apple moving about 15 million iPads, and now the tablet market is a 230 million unit market.
Smartphones weren’t that different. Back in 2005 and 2006, most industry analyst forecasts had smartphones growing, but most had the feature phone market continuing to dominate through this decade, in part because the iPhone had yet to appear and show everyone that the market is more than just a professional user market (as the Blackberry kind of defined the smartphone market as in most people’s minds).
Now with smartwatches, I think we’re seeing the limits once again of the typical forecaster’s imagination. Most see the basic smartwatches on the market today and simply extrapolate forward, not really considering how smartwatches could:
- easily start to eat into the low-end smartphone market
- create entirely new categories in watch sub-segments such as the durable, fitness and children’s space
- and how major watch maker such as Swatch, Timex and others will likely integrate smartwatch capabilities into watch lines once they feel the heat from the technology-side movers like Apple and Google.
Could my forecast be too aggressive? Sure it could.
But I don’t think it is. The watch market is a 1.2 billion unit market annually, and there are 7 billion mobile subscribers worldwide. Fairly modest penetration into those markets will create a significant opportunity beyond what most forecasts anticipate today.