Wearable devices are capable of gathering information about the wearer and the environment, as they are body-worn electronic devices embedded with sensors in the form of everyday gadgets, such as watches, glasses, clothes, and jewels. Wearable devices also contain circuitry, wireless connectivity, and communication and processing capabilities.
The wearable devices market is at an early growth stage, providing to a limited and niche customer base, as per Reportlinker. Smart watches, fitness bands, and wearable health-monitoring devices are the dominant, fast-growing markets. With the introduction of Apple's smart watch, it is likely that it will dominate the smart watches market, similar to the company's smart phone and tablet product lines. It is estimated that a chunk of the purchase decision for wearable devices is based on the long battery life of the device. This is due to the limited battery capacity available in these devices; thus, to enhance the battery life of the system, power management units become inevitable. Wearable electronics bring tremendous opportunities for sensor manufacturers, with the increasing functionalities embedded in them. Micro-electro mechanical systems (MEMS)- based combo sensors play a critical role in wearable devices, due to their small sizes and high levels of functionality. While smart bands made up the majority of shipments in 2015, smart watches are expected to account for more percent of all wearable shipments by 2020. The memory storage use in these devices is growing exponentially - doubling every 2 years - primarily because of high-end smart watch support color screens that typically run a more intensive operating system (OS), such as Android and iOS. Connectivity devices have a greater impact, especially with the growth in smart watches, as most interactions - from social networking to banking are based online. This requires an effective power management integrated circuit (PMIC), connectivity circuits, and processors to optimize the limited battery power and extend the device operating period. Due to scalability limits, wearable device manufacturers are demanding a one-stop semiconductor solution with reduced chip size to match the requirements.

The market for wearable electronics is expected to grow at a CAGR of 26% during the period 2013-2020 and is largely dominated by North America, followed by the European Union and Asia Pacific, as per Allied Market Research. Growth of this industry is majorly driven by factors such as high adoption rate of digital devices, convergence of technologies, and penetration of wireless connectivity. Major challenges include lack of design features, higher power consumption of wearable devices, high initial cost and users’ concerns regarding data privacy. Wearable electronics refers to an integrated computing device or product, which helps the person or the user wearing it to enhance day to day activities. The technological advancement in wearable electronics, help the user to avail advanced features and characteristics. The first form of electronic wearable electronic device was a calculator watch. Wearable devices such as wrist bands, and watches, which can record audio, video and process data on the go, were seen as something very futuristic; however, advancements made in the past decade has made it possible for users to realize the potential of these devices in the current age. ‘Wearable technology’ forayed in as a technological advancement only a decade ago, and the interest in this sector still continues to grow. The interest is mostly led by wearable fitness trackers, smart watches, and bands. Lately, such is the impact of these wearable devices that, now mobile operators are moving towards offering smart watches along with fitness trackers, or smart phones with smart watches as a part of a bundled deal to woo customers. Presently, wearable electronics are only deemed to be an important advancement in terms of luxury; however, the way this innovation is catching up the imagination of current users, the global conglomerates and businesses see this as a major opportunity to expand and increase their market.
Growth of this industry is majorly driven by factors such as high adoption rate of digital devices, convergence of technologies, and penetration of wireless connectivity. Major challenges include lack of design features, higher power consumption of wearable devices, high initial cost and users’ concerns regarding data privacy. 

As the proliferation of wearable devices increases, newer market applications emerge. The smart home market is an attractive opportunity for employing wearable devices. A nascent market, it is important for smart home and wearable vendors to understand the market potential and prepare for the evolution of the smart home ecosystem. Frost & Sullivan asesses the key growth areas for wearables in smart homes, namely remote control, healthcare monitoring, authentication, and personalised home. Key findings include:
* The home automation market is in an early growth stage, with most consumers yet to deploy smart home applications. Similarly, the use of wearables is at an early stage of development.
* Though there is talk about using wearable devices in the smart home, the market is very nascent. Smartphones dominate the space for smart home control and wearable device vendors have only just started building partnerships with home automation providers.
* Remote monitoring of smart home devices, healthcare monitoring and personalization of the ambient environment in the home are the biggest opportunities for wearable device use in the smart home.
* Technological challenges involving wearable device controls, contextual awareness, data security, machine intelligence, and platform compatibility need to be resolved to enable wearable applications in the smart home.
* Wearable device business models are still evolving. It is important to develop an attractive business model that integrates with the subscription-based model of home automation solutions.