Canalys predicts over five million smartwatches will ship in 2014

Market research firm Canalys has predicted the worldwide market for smartwatches will hit five million units in 2014.

The prediction marks a ten-fold growth rate over the 330,000 devices shipped in 2012 and the estimated 500,000 devices expected to be shipped this year, with the entry of major electronics firms into the market expected to be the catalyst for the boost.

“Smartwatches will be the most important new product category in consumer electronics since the iPad defined the market for tablets,” says Canalys vice president and principal analyst Chris Jones.

The forecast predicts smartwatches will complement smartphones rather than supersede them, with integration, information at a glance and hooks for popular web applications the key features web giants will need to master.

Creating stylish devices users are happy to wear will also be an important consideration for businesses looking to enter the sector.

“An effective smartwatch won’t just be a second screen for a smartphone. Creating a competent developer platform specifically for the form factor will be an enormous challenge,” Canalys analyst James Wang says.

“Google and Microsoft must execute more successfully than they have done with their tablet platforms and will have to adapt their business models appropriately.”

Currently, the Kickstarter-funded Pebble Watch is the market leader in the emerging sector.

However, over the coming years a number of major hardware manufacturers are set to enter the market, including Google, Microsoft, Samsung, LG and Apple.