Sector to return to growth in 2018, driven by one of three outcomes, predicts NPG Group

Wearable device hype to wear off by 2016, says analyst

The zeitgeist for wearable technology is to cool down within the next two years, an analyst has predicted.

Market tracker The NPD Group forecasted that the market will grow to reach 48 million unit sales this year, before peaking at 91 million units sold in 2015.

Following this, NPD said that it expects the market to contract in 2016 as hype for wearables wears off, before returning to growth in 2018 – but at a slower rate than the sector is currently experiencing.

"We expect that the dynamics of the wearables market will be similar to DVD, LCD TV, smartphones and other digital consumer markets with commoditsed hardware," said Paul Gray, director of European TV research for NPD DisplaySearch.

"The arrival of Samsung, LGE and other large, cost-efficient manufacturers to the wearables market would bring prices and margins down."

NPD divided the future of wearables into three possible outcomes: ‘forward into the past’, in which growth is driven by wealthy, fashionable early adopters then influencing the lower end of the market; ‘incidental to essential’, where utility-driven devices lock users in an iOS-like ecosystem with the right service offering; and ‘persuasive and pervasive’, where wearable health trackers and bio-sensors drive the essential adoption of devices for health and well-being reasons.

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