Ap­ple has pro­duced a smart watch that mass-mar­ket con­sumers will ac­tu­ally want to wear.”

China Daily (Canada) - - FRONT PAGE -

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.

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