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In the race for wearable computing devices, smart glasses will likely emerge as the winner—with the number of users exceeding 100 million by 2020.

Is 2014 the breakout year for wearable computers? Glasses, fitness bands, and watches are all getting “smart,” but Deloitte sees different trajectories for each of these “wearables” in 2014 and beyond. Smart glasses appear poised to become mainstream in the medium-term, while smart fitness bands and smart watches may remain niche markets.

“Wearables are a great market overall and merit the excitement,” says Paul Lee, director and head of global technology, media, and telecommunications (TMT) research, Deloitte Touche Tohmatsu Limited (DTTL). Smart glasses, fitness bands, and watches, are likely to sell about 10 million units in 2014, generating $3 billion, Deloitte predicts. Of that total, smart glasses should contribute the lion’s share of revenues—about $2 billion, or four million units at an average selling price (ASP) of $500. Smart fitness bands will likely generate revenues of around $560 million (four million units at an ASP of $140). Revenues from smart watches should reach about $400 million (two million units at an ASP of $200).

Smart Glasses: Looking Good

Many consumers have greeted smart glasses with skepticism, but enthusiasm for them will likely prevail. While early adopters will number in the millions in 2014, global demand may increase to the tens of millions by 2016 and surpass 100 million by 2020.

“Smart glasses are the next stage in the rollout of digitally connected screens in our professional, social, and private lives,” says Duncan Stewart, director of research for TMT for Deloitte Canada. Early versions include features such as Internet connectivity, a camera for photos and video, and an audio recorder. Some models also have voice activation and can respond to facial movements, such as winks. The visible display size on smart glasses will always be small, with fewer than 20 words readable at a time. But that won’t stop smart glasses from becoming increasingly popular as a tiny line-of-sight screen, providing instant feeds of incoming data that complements the array of screens we already use. “Think of smart glasses as useful for Internet snacks, not Internet meals,” says Stewart.

Usage of smart glasses in 2014 will likely focus on consumer applications, with enterprise usage becoming more prevalent later as product specifications improve. Consumers will mostly like use smart glasses for activities like getting directions and taking photos or videos. There may be some applications for video games, but the appeal of these will be limited by the small screen size. Sports and fitness may also provide a rich context for usage, with applications allowing participants to view performance metrics in real time. Long term, smart glasses may have applications in telemedicine—for example, as sensors and a means for remote communication between patients and care providers.

Smart glasses will also provide consumer data that can be monetized. For example, advertising messages could be linked to the user’s location, to products in line of sight, or to a bar code. “We expect that some device manufacturers may be willing to sacrifice higher margins for the ability to monetize this rich stream of consumer data,” says Lee.

Industries most likely to benefit from smart glasses in the next three to five years include manufacturing and oil and gas, which have high-value engineers whose productivity could be enhanced through access to line-of-sight information. Analysts have estimated that smart glasses could save companies up to $1 billion per year by 2017—through displaying instruction guides, relaying photos and videos, and allowing employees to interact with experts in offsite or remote locations.

Smart glasses have raised privacy concerns due to users’ ability to capture, share, and archive what they see or hear. However, smartphones already have similar capabilities, so the privacy concerns raised by smart glasses are not new. “Users of smart glasses will likely encounter many of the prohibitions currently faced by users of smartphones—such as bans on use in schools, courtrooms, and while driving,” says Stewart. “But that still leaves many other locations and contexts in which use will be permitted.”

Smart Fitness Bands: Moderately Healthy

Smart fitness bands, typically worn on the wrist, should enjoy reasonable demand in 2014, but the market for such devices may never be mainstream. Smart fitness bands measure a range of activities—from paces walked to hours slept—and reflect the trend of measuring many aspects of our activities.

“We envision two categories of users for these devices,” says Lee. One is sports enthusiasts who already exercise a lot and wish to track their activity. They are likely to focus on high-end devices that provide very accurate measurements.

A second and much larger category is individuals who may buy a fitness band or receive one as a gift with the goal of changing their behavior. For example, they may hope that measuring their exercise habits and performance will encourage them to work out more. However, after an initial burst of enthusiasm, people in this group often stop using the devices, says Lee. Further undercutting the adoption of fitness bands is the fact that many of their features are now included in high-end smartphones.

Smart Watches: Not Their Time

Smart watches—with capabilities like text messaging and email—are likely to remain specialty devices and be outsold by smart glasses over the long term. Integrating smartphone functionality into a device that fits on the wrist is challenging, and entering text or data on small panels is tricky. “Although a $200 smart watch may cost less than smart glasses, there is likely to be little incremental benefit from having one in addition to a smartphone,” says Stewart.

Moreover, even though smart glasses and smart watches both serve as complementary screens to a smartphone, smart glasses are more aligned with overall usage trends. “Checking information on a wrist is a declining practice, whereas viewing information in our line of sight via smart glasses is an emerging one,” says Lee.

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Although it is still early days for smart glasses, their widespread acceptance seems likely. To be sure, truly advanced designs—a $500 pair of glasses with full-screen augmented reality—are still many years off and may never be realized. But the ability to provide information in the line of sight should make smart glasses the champion among wearables.