"Wearables are poised to be the perfect gift for the person who has everything this Christmas. We believe this will fuel strong growth in the final quarter of 2014 for smart bands, particularly fitness trackers, which will account for more than half of the 35 million wearables in use at end of 2014," Marina Koytcheva, CCS Insight's director of forecasting said in a press release.
Major technology giants have turned their attention to the smart connected wearable device space in an attempt to get first mover advantage. Samsung's Galaxy Gear range as well as Google Glass have looked to tap the market, though the technology is still in its infancy.
It is no surprise that smartwatches have been in focus. Over half of wearables sold in 2018 will be smartwatches, according to CCS Insight, and will eventually replace fitness bands as the most popular device as the features become more refined and prices fall.
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While over 40 percent of wearables were sold in North America, Western Europe is catching up and is expected to buy more devices by 2016.
Despite the promise wearables are showing, the technology still faces "significant challenges".
"The market is still in a chaotic stage of development, and there's still a huge amount of uncertainty," Koytcheva warned.
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"Every category faces different risks: the way people use wearables is still changing, one type of device could kill sales in another category, people are unsure whether some wearables are socially acceptable, and intellectual property rights are a minefield for the dozens of start-ups entering the wearables market."
Apple iWatch gamechanger?
Consumers are also keeping an eye on Apple as it is rumored to be released the hotly anticipated iWatch this year. Apple's entrance to the wearable space could be put to bed some of the image issues associated with wearable tech, Koytcheva added.
"The market could be changed beyond recognition if a major player like Apple decides to get into the game. History shows us that when Apple enters a market it can reshape the way people think about a product."
- By CNBC's Arjun Kharpal