Apple has produced a smart watch that mass-market consumers will actually want to wear.”
Garmin Ltd, the worldleading manufacturer of GPS navigation and wireless devices, made its first foray into China in the automotive market. However, two years later it changed gear, finding immense potential in fitness and wearable products.
Zhou Ziyao, Garmin China’s managing director, says the company did not initially believe the fitness and wearable products market in China would offer much potential for rapid growth as wearing watches was not even that common in the nation.
At the time the firm was also unaware of the prospects offered by sports and health awareness in China.
But, since Garmin introduced its health products to China in 2013, it has seen runaway growth.
Zhou explains that this was due to an increase in the nation’s waistlines and blood glucose levels. As a result, people started to think more about getting exercise, such as riding a bike or jogging.
Consumer interest in jogging clothes, shoes and equipment now extends to wearable devices to help people to use their exercise data more scientifically, he says.
Effective wearable devices help people who are exercising run faster and prevent injuries.
“It is more than a record of your speed, but a record of your memory to help you achieve better results,” he says.
“A good device will be able to tell you how long should you exercise for and when you need more rest.”
Another use for such devices is to encourage joggers to compete with their peers by knowing where their friends are running and what their performances are like.
Garmin has enjoyed 100 percent annual growth in its fitness device sector, which has led it to become the second-largest unit of its business in China.
The company offers its products also on e-commerce platforms so it can reach more consumers. In addition, it has offered its products to local fitness enthusiasts to help them experience the benefits they offer.
In the future, Zhou says the company aims to get its products on display at more electronics retailers in shopping malls.
In 2015, the wearable products sector is forecast to achieve higher growth in the Asia-Pacific region, with industry analysis firm Canalys forecasting a total shipment of around 10.6 million units in the area, according to Jason Low, a research analyst at Canalys.
The push for smart wearable bands capable of running third-party apps will be more pronounced than that for basic wearable bands, with sales forecasts of 7.2 million units for smart bands and 3.4 million units for basic bands in the Asia-Pacific region this year, he says.
Wearable band shipments will grow 129 percent yearon-year to reach 43.2 million units in 2015, of which 28.2 million will be smart bands and 15.0 million will be basic bands, according to the latest forecasts by Canalys.
Canalys tracks wearable device shipments and segments the market into smart bands, which are capable of running third-party apps, and basic bands, which are not.
Apple will be the biggest driver behind wearable band shipments in 2015, according to its research.
“By creating a new user interface tailored to its tiny display, Apple has produced a smart watch that mass-market consumers will actually want to wear,” says Canalys analyst Daniel Matte.
“The sleek software, variety of designs and reasonable entry price make for a compelling new product. Apple must still prove, however, that the final product will deliver adequate battery life for consumers.”
Many market observers have questioned why consumers would want a smart band, justifiably demanding compelling use cases. Hoping to address these concerns with its new wearable, Apple has demonstrated a variety of use cases, including health and fitness and personal communication, as well as other areas, such as mapping for walking navigation, workout and activity tracking, and mobile payments.
Meanwhile, low-end Chinese vendors are playing a greater role in the wearable band market, according to Canalys.
One such example is Xiaomi Corp, which has dramatically lowered the price of basic bands with its Mi Band.
Long-term, wearable bands from all vendors must provide value to consumers beyond the existing capabilities of smartphones in order to justify the purchase of an additional device.
“Basic band vendors, such as Fitbit and Jawbone, will enjoy the advantages of their lower pricing for the immediate future,” according to Canalys Vice-President and Principal Analyst Chris Jones.
“Eventually, however, stronger smart band competitors to the Apple Watch will likely emerge and push smart band pricing down. This market will undergo disruption similar to that suffered by feature phones when smartphone prices fell.”
Wearable band shipment data and five-year forecasts are taken from Canalys’ Wearable Technology Analysis service, which provides quarterly market tracking, including country-level estimates.