Wearable Hype Could Slow By 2016, NPD Says

Wearables face a rocky patch as the market matures

Wearable devices are hot right now, but will slow down for a time before rebounding again, market research firm NPD is forecasting.

Much like PCs and mobile devices, a price battle and rapid expansion of wearable devices in coming months could make way for unbranded vendors in countries like China to sell products at lower prices, said NPD DisplaySearch in a study released Thursday.

The effects of price erosion could last a few years until wearables become more of a necessity than a fashion statement and the industry consolidates, NPD said.

"We expect that the dynamics of the wearables market will be similar to DVD, LCD TV, smartphones, and other digital consumer markets with commoditized hardware," said Paul Gray, director at NPD DisplaySearch, in a statement.

Wearable device shipments are expected to be 48 million units this year and could reach 91 million units in 2015, according to NPD.

NPD presented multiple growth scenarios after the hype around wearables slows down and buying trends are sorted out. Wearables could become a necessity for health and other reasons, with more services are tied to them, keeping users locked to specific brands.

China could dominate wearable shipments in coming years under some scenarios. NPD also presented multiple scenarios around slower demand for wearables. For example, demand could shrink if wearables are deemed unfashionable in China, while decline could be slower in North America and Europe if wearables are bundled with services.

NPD considers activity trackers, notifier bands, smartwatches and head-mounted displays in its wearables research.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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