Wearables – a buzz word that has become a part of our everyday jargon but what difference does it really make in people’s lives?
The overarching function of all wearables is to capture, transmit and display information. Wearables are a part of the Internet of Things, the technological platform that embeds electronics into our houses, clothing and in places we can’t even image yet. Think of it as the next evolutional step following personal computers and smartphones.
According to the IDC, the total number of wearable devices in Q1, 2015 reached 11,4 million. The majority of these devices include activity tracking bands and smartwatches while smart clothing will soon become mainstream.
IDC reports that of all of the fitness band companies, FitBit and Xiaomi hold the crowns. FitBit has shipped 3.9 million devices and Xiaomi has shipped 2.8 million Mi Band units in Q1, 2015. It’s no accident that fitness bands dominate the wearable market. The demand for capturing and storing data related to health is outrageous. You can open any recent World Health Organization report to see the magnitude of health problems that exist today and the level of demand for health trackers will then make sense. Activity trackers give people a way to measure their efforts of becoming or staying healthy.
These devices alone cannot make major health changes overnight but they do work for people who are interested in living a healthier lifestyle and need more gear to support it. I’m not expecting fitness bands to become as mainstream as smartphones because being healthy is a personal choice that not everyone is interested in pursuing.
The total number of companies that produce activity trackers is more than 20 and that number keeps growing. In order for companies to join the activity tracker market, they have to work with medical institution(s) on a regional level. Major players in this market have too much head time for small companies to be able to get their share of the global market.
In 2012, the Fitbit One model set the standard for activity trackers. It was a unique duo of hardware to capture data and a mobile app (iOS, Android or both) to store, proceed and display data. Fitbit is getting ready to go public, which shows the company’s confidence in its future. This trend triggered the development of many iOS and Android apps to utilize smartphone tracking capabilities to capture health related data.
The idea of a smartwatch isn’t really new, the first digital watch was designed back in 1972. Though it took 40 years for Pebble to bring the smartwatch on the market. In order for the smartwatch to be recognized by large amounts of people, e-ink technology brought both ability to expand electronic watch capabilities and guaranteed a long battery life.
Last year 6.8M smartwatches were sold at an average price of $189. The total revenue generated by all companies that sold these smartwatch units was $1.29 million, which is up from $711k back in 2013. Samsung was at the top of the charts with 1.2 million units shipped (we don’t know how many units were sold, which is different from being shipped). Pebble came in second with 700k smartwatches sold last year. Motorola, LG and smaller companies then followed but didn’t sell a significant number of units.
The overall trend I can see is that apart from Apple, Samsung, Motorola and LG, Pebble is the only big player that is focused entirely on a smartwatch. This goes to show that companies see these new devices as an extension of their smartphone businesses. This is a cautious approach because companies simply don’t know the real demand for smartwatches.
How does a smartwatch change lives? The jury is still out. A smartwatch was brought to the market at a time when the young generation of consumers simply didn’t wear watches. All companies that have brought smartwatches on the market, including Apple, have to solve the major issue of how to make a smartwatch relevant for the young generation. Among other companies that sell smartwatches, Apple has the biggest and most loyal consumer base and that is something a company can’t build overnight in order to compete.
Though this type of wearable is in its inception stage, it’s one way for clothing companies to distance themselves from their competitors and bring new features to clothing. We see projects like Project Jacquard which is essentially about making a fabric conductive and to become a tablet computer touchscreen analog. Google has already teamed up with San Francisco-based denim label Levi to create a pair of jeans that can actually warn you when you’ve gained some weight. This is only the first application. Smart clothing can be a remote control to various devices in your home as well as in public places.
The following quote from Wikipedia sums up the current state of the smart glasses market pretty well:
On January 15, 2015, Google announced that it would stop producing the Google Glass prototype but remained committed to the development of the product. According to Google, Project Glass was ready to “graduate” from Google Labs, the experimental phase of the project
The story of Google Glass, one the most ambitious wearable projects, is a perfect example of what may go wrong with wearables and/or technology. With Google Glass there were two factors stopping it from taking off. People weren’t comfortable (safety wise) and the high price point. We don’t see smart glasses yet from other companies on the market because of the Google Glass failure. Until technology allows us to make smart glasses undistinguishable from regular glasses, this technology most likely won’t take off.
Data collection can be hacked and used by criminals. Since data can be collected via wearables, it will raise a certain level of fear on the consumer side. Companies that will consider privacy concerns and put a proper strategy in place will have an advantage over their competitors.
The IDC forecast for wearables growth promises to reach 45.7 million units shipped by the end of 2015 and 126.1 million units by 2019. Personal electronics, healthcare appliances and apparel have already taken off. Given how different verticals are connected, it’s too early to predict what other verticals will join the list but there will be more.
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