Vendors urged not to be late to smartwatch party

Canalys claims five million smartwatches will be shipped next year - up 900 per cent on 2013

Technology firms cannot afford to wait to get into the smartwatch market, according to Canalys, which predicts a 900 per cent increase in sales of the devices next year.

The analyst claims smartwatches will be the most important newcomer to the consumer electronics market since the iPad paved the way for tablets.

Last year, only 330,000 smartwatches were shipped globally, a number which rose to half a million this year. But in 2014, the figure is expected to skyrocket tenfold to five million – driven by expected entries into the market from Google, Apple, Samsung and Microsoft. in 2012, more than one billion standard watches were shipped globally.

Unlike earlier products, smartwatches of the future will not just be a separate display screen for mobile phones, claimed Canalys, which predicts a boom in more sophisticated software, sensor integration and links to web services.

Canalys said innovative companies that create compelling apps for the devices will be best placed to capitalise on what it claims is a major market opportunity.

Principal analyst at Canalys Chris Jones said health and fitness will be a key area that will see strong uptake in the new technology. Canalys analyst James Wang added that some of the top vendors will need to think seriously about the market.

"Google and Microsoft must execute more successfully than they have done with their tablet platforms and will have to adapt their business models appropriately," he said.

"An effective smartwatch will not just be a second screen for a smartphone. Creating a competent developer platform specifically for the form factor will be an enormous challenge."