HAMPSHIRE, UK – Connected clothing will become a $1 billion industry in 2020, the fastest growing wearables sector, growing at a 102% CAGR over the next two years, says Juniper Research.

The wearables market has begun to shift away from wrist-based devices, such as smartwatches and fitness trackers, with other device categories forecast to grow much faster, says the research firm.

In terms of shipments, over the next two years smart glasses will grow at a CAGR of 98%; smart jewelry 55%; hearables 31%; and smartwatches 31%.

The smart wearables market will reach nearly 350 million devices shipped by 2020, says Juniper. The market is currently dominated by smartwatches and activity trackers, with 137 million devices expected to be shipped in 2018. However, growth will slow, shipping almost 190 million by 2020, as the lifecycle of devices lengthens.

Juniper expects connected clothing to accelerate in the coming years as a result of developments in conductive fabric, alongside smart sportswear from companies like Sensoria, Lumo and Under Armour. This sector will ship over 7 million by 2020, before reaching nearly 30 million in 2022.

In addition, as device types broaden and purchase cycles lengthen, companies will need to focus on software and data services to maintain their revenues, says the firm. The largest market for these subscription services will be healthcare, with services payable to vendors like AliveCor and Quell exceeding $2.5 billion by 2022.

Other segments will struggle to monetize data services, with consumer fitness and smartwatch service revenues generating a combined $125 million in 2022.

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

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