Could wearables become bigger than tablets?

FORTUNE — Mobile gadgets won’t just be tucked into your purse or your pocket. Soon, they’ll increasingly be on your wrist, as part of your glasses and even in your clothing. While still in its infancy, wearable technology is poised to take off. The market for the wearables business is expected to exceed $1.5 billion in 2014, double its value last year, according to a report from Juniper Research.

Unlike other parts of the consumer electronics market, the wearables category is made up of many small segments, with wearable fitness bands currently leading the way in consumer adoption. But the wearable band market is growing fast, according to a forecast by Canalys, and more than 17 million wearable fitness bands will be sold this year. That figure is estimated to reach 23 million by 2015 and more than 45 million by 2017.

Fitness and health remains the leading application for wearable technology.

“It is still dominant because [fitness and health] is what we are most concerned with,” said Julie Sylvester, producer of the Sports & Fitness Tech Summit at the annual International Consumer Electronics Show in Las Vegas. “People are much more likely to incorporate trackers and heart rate monitors into their daily routine and accessories.”

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The more fashionable — or conversely, the more “invisible” — trackers and monitors will expand beyond the early adopters, Sylvester said, to the general consumer “who is not adopting the newest trend or is interested from a professional level, but is actually interested in monitoring their health and fitness from a preventive state of mind or if there is a specific health concern.”

The market for the power behind all these devices will also see a significant boost. Worldwide revenue for wearable electronics batteries will reach $77 million by 2018, according to IHS Technology, up from just $6 million this year.

The market in its infancy has been dominated by numerous startups, including Pebble, Fitbit, and Jawbone. But a number of tech giants — including Apple (AAPL), Samsung, and Google (GOOG) — are just now entering the space. And Intel’s (INTC) acquisition of smartwatch maker Basis Science last week — for a reported $100 million — demonstrates continued interest in the wearables market.

Though Google Glass — the “smart” glasses that place a postage-size screen in the line of sight of the wearer — is still limited in its availability, a recent deal with Luxottica stands to change that. Google has also introduced Android Wear, a version of its popular mobile operating system that can be licensed by a number of hardware partners, including Google’s soon-to-be former subsidiary Motorola and partner LG but also Samsung, Asus, Broadcom, Fossil, HTC, Intel, Mediatek, MIPS, and Qualcomm (QCOM).

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“The catalyst this year for wearables could be Android Wear, which is optimized for smartwatches,” said Michael Wolf, chief analyst at NextMarket Insights. “The big question now is: What is Apple going to do?”

That part of the equation remains unanswered, though Apple retains a U.S. Patent for “Wrist Pedometer Step Detection,” suggesting that the Cupertino, Calif.-based company is looking to create something — devotees are calling it the iWatch — along the lines of Nike’s FuelBand or the Fitbit.

It remains to be seen whether wearables will significantly cannibalize existing product categories, Wolf said.

“For now the leading category will likely be smartwatches, but as Google Glass suggests, it could become much broader and in time even be in the clothing we wear,” Wolf said. “Most of the companies developing smartwatches see this as a product that accompanies a smartphone as opposed to any sort of replacement. Certainly the big players view this as a device used with a smartphone, but there could be some cannibalization of other devices. The basic fitness bands will be hit hard, because any time you have a limited product it could be overtaken by the more general products.”

Smaller, niche players must grow or face challenging market forces, said Shane Walker, associate director for Digital Health Research at IHS.

“In sports and fitness there has been a lot of competition,” Walker said. “There could still be growth in the activity and heart rate monitors, but the ‘me too’ type of devices will find it hard to stick around.”

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But for the market to really grow, it will need a breakthrough, “must-have” product, said Rob Enderle, principal analyst for the Enderle Group.

“Right now wearable [product] volumes are around where MP3 players were pre-iPod, and the success surrounds products like the FitBit and Nike offerings focused on exercise,” Enderle said. “It is a decent market but well short of potential. With the right product, this market could grow to rival or even replace the smartphone market, but the right product hasn’t emerged yet and Steve Jobs isn’t around to repeat the iPod cycle. So, for now, it is limited to exercise and health care, the potential is there for more — but we need an iPod-, iPhone-, iPad-like effort to achieve that potential.”

Is that kind of push in the cards? If the business opportunity is to be believed, it’s entirely possible, Wolf said.

“Wearables has the potential from units sold as a category to be bigger than tablets,” Wolf said. “It is a much more expansive category. ‘Wearables’ could be VR headsets. It could be a watch. It could be something on your hip or technology in your clothing. The hurdles to get in on this market are low, so there is going to be serious expansion of the category over the next decade. Yes, that overall pie is going to get a lot bigger.”