Wear­ables Sec­tor Still Grow­ing, Thanks to Ba­sics

WWD Digital Daily - - News - BY ADRI­ANA LEE

Wear­ables have be­come a healthy busi­ness, ac­cord­ing to IDC’s lat­est re­port.

In its World­wide Quar­terly Wear­able De­vice Tracker, the re­search firm cred­its newer, less ex­pen­sive prod­ucts for driv­ing dou­ble-digit growth, while com­pa­nies like Ap­ple and Fit­bit in­creas­ingly look to health­care fea­tures to fuel the next surge.

In the third quar­ter of the year, global ship­ments hit 32 mil­lion units, an up­swing of 21.7 per­cent over last year. The firm at­tributes the growth to what it called

“ba­sic wear­ables,” which in­clude lower-cost de­vices like stripped-down watches and fit­ness track­ers. It cred­its com­pa­nies like Fit­bit, Garmin and Huawei with pow­er­ing the sec­tor’s suc­cess dur­ing the quar­ter.

“Many of the new ba­sic wear­ables in­clude fea­tures like no­ti­fi­ca­tions or sim­ple app in­te­gra­tions that bleed into smart­watch ter­ri­tory,” said Jitesh Ubrani, se­nior re­search an­a­lyst for IDC Mo­bile De­vice Track­ers. “This has helped sa­ti­ate con­sumer de­mand for more ca­pa­ble de­vices while main­tain­ing av­er­age sell­ing prices in a mar­ket that faces plenty of down­ward pres­sure from low-cost ven­dors and de­clin­ing smart­watch pric­ing.”

How­ever, Ubrani notes that, as such ba­sic de­vices evolve to in­clude more fea­tures, the pric­ing gaps with smart­watches could grad­u­ally close.

The up­side be­ing that “…brands could po­ten­tially move con­sumers up­stream to smart­watches,” he added.

In other words, the reign of pre­mium smart­watches might not be over yet.

Even so, the wear­ables’ tra­jec­tory is any­thing but ab­so­lute. The U.S. in par­tic­u­lar seems to be in a tran­si­tional phase. The mar­ket is fo­cus­ing less on en­tic­ing new users with shiny gad­gets, and shift­ing more to up­grades and re­place­ments for ex­ist­ing cus­tomers. This chang­ing na­ture saw de­clin­ing growth of 0.4 per­cent in the U.S., com­pared to last year.

Over­seas, the tra­jec­tory looks very dif­fer­ent. IDC clocked more de­mand in the Asia-Pa­cific mar­ket, apart from Ja­pan. The re­gion saw growth of 21.4 per­cent over last year and rep­re­sented more than half of all global ship­ments.

Those find­ings help ex­plain a few other facets in the global wear­ables scene. Chi­nese con­sumer elec­tron­ics giant Xiaomi pulled off an im­pres­sive 90.9 per­cent yearover-year growth this quar­ter, fu­eled in part by its new Mi Band 3. The de­vice nabbed

6.9 mil­lion ship­ments and mar­ket share of 21.5 per­cent, IDC said.

Now Xiaomi has be­come the world’s top wear­ables ven­dor by ship­ments, sup­plant­ing Ap­ple.

This fall’s in­tro­duc­tion of the Ap­ple

Watch Se­ries 4 il­lus­trates the com­pany’s fo­cus on re­fin­ing its wear­ables ex­pe­ri­ence, while hold­ing onto older mod­els. In other words, in­stead of re­leas­ing a low­er­cost smart­watch to com­pete in a mar­ket fo­cused on cheaper de­vices, Ap­ple con­tin­ues to sup­port pre­vi­ous gen­er­a­tions. And it con­tin­ues to hone the de­tails and ex­pe­ri­ence with ev­ery up­graded model.

The Se­ries 4 boasts a bet­ter, larger screen housed in a cas­ing that’s thin­ner and neg­li­gi­bly larger than its pre­de­ces­sor. And it of­fers a built-in sen­sor that can de­tect ir­reg­u­lar heart­beats.

Ap­ple’s med­i­cal in­ter­est goes deep, with heart mon­i­tor­ing, built-in well­ness fea­tures and HealthKit re­search ini­tia­tives. The com­pany seems to view health care as an es­sen­tial in­gre­di­ent for fu­ture wear­ables growth, as does Fit­bit — which re­mains in third place in IDC’s rank­ing. The lat­ter has been reach­ing for clin­i­cal and reg­u­la­tory ap­provals for mon­i­tor­ing soft­ware aimed at cer­tain sleep dis­or­ders and heart con­di­tions.

Both Ap­ple and Fit­bit have been work­ing on part­ner­ships with com­pa­nies and hos­pi­tals to ex­pand into cor­po­rate well­ness pro­grams and health care.

“The health-care mar­ket is quickly be­com­ing the next fron­tier for wear­ables brands to con­quer,” Ubrani said. “With heavy reg­u­la­tion and greater scru­tiny, this seg­ment will likely be the one that staves off value brands, al­low­ing the mar­ket lead­ers to fur­ther ce­ment their lead.”

Cheaper de­vices drive the sec­tor, while a new com­pany tops the list. But Ap­ple and Fit­bit have plans to keep their wear­ables healthy.

Ap­ple Watch Se­ries 4

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