The global wearable device market took a big step forward in Q4, but are we any closer to a world in which wearables are a sic-fi-like part of our everyday clothing?
Hmmm. Not really. But that’s not to say wearables aren’t becoming more important to us.
The growth was fuelled (as in previous quarters) by the growing popularity of fitness trackers and the Apple Watch. According to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker, vendors shipped a total of 27.4m units during the holiday quarter, up an amazing 126.9% year-on-year. For the full year, vendors shipped a total of 78.1m units, up an even stronger 171.6% over 2014.
“Triple-digit growth highlights growing interest in the wearables market from both end-users and vendors,” said Ramon Llamas, Research Manager for IDC’s Wearables team. “It shows that wearables are not just for the technophiles and early adopters; wearables can exist and are welcome in the mass-market. And since wearables have yet to fully penetrate the mass market, there’s still plenty of room for growth in multiple vectors: new vendors, form factors, applications, and use cases. This will help propel the market further.”
But he also called for continued innovation and development: “The market can only get so far with ‘me too’ and ‘copycat’ wearable devices. End-users expect improvement from what they have now, and new applications to spur replacement and increased adoption.”
That means historical data, like steps taken and calories burned, has been a very good start but it’s not enough. “Prescriptive data, like what else a user can do to live a healthier life, coupled with popular applications like social media, news, and navigation, will push wearables further, and attract more users,” Llamas said.
Not yet in fashion
But given that just a couple of years ago everyone thought that fashion was where wearables were headed (believe me, I met a lot of people who thought that back in 2014), where’s the fashion element on all this? After all, it’s nearly a year since Google and Levi’s announced Project Jacquard, designed to turn our jeans into connected devices.
“Fashion and design will play an equally important role in increasing adoption,” said Jitesh Ubrani, Senior Research Analyst for IDC Mobile Device Trackers. “[But] simply encrusting your watch with gold and jewels isn’t going to cut it. Rather forming partnerships with notable fashion icons, a route taken by Fitbit and Apple, is far more likely to succeed.”
“It’s also worth noting that the wearables market isn’t just about smartwatches and fitness bands,” continued Ubrani. “Though the top five certainly dominate with wrist-worn devices, there’s been an immense amount of growth in clothing, footwear, and eyewear, form factors that arguably require even more fashion sense than watches or bands.”
So who’s on top?
Fitbit ended the year the way it began it, as the undisputed worldwide leader in wearable devices. The same drivers were in play: a well-segmented device portfolio, a fast-growing corporate wellness programme, and extended market reach around the world. 2016 shows new hardware development with a watch (Fitbit Blaze) and a fashion-oriented wristband (Fitness Alta), while the company remains true to its fitness-tracking DNA.
Apple grew its Watch distribution, enjoyed holiday promotions, and drove the company’s overall ‘Other Products’ revenue during Q4. However, volumes for the quarter grew only slightly from the previous quarter and total revenues have yet to counterbalance the slowing growth and declines from the company’s other product categories. Expectations are higher for the next-generation Watch that can leverage the company’s platforms (HealthKit, ResearchKit, WatchKit, and watchOS 2) and connectivity capabilities.
Xiaomi’s focus on inexpensive fitness trackers resonated within China, with prices far below the competition (as low as US$11), making the Mi Band an inexpensive purchase. This allowed Xiaomi to have the largest year-on-year improvement of any vendor on the list. Xiaomi’s latest device, the Mi Band Pulse, continues that tradition ($13) even as it adds constant heart rate monitoring. This puts the company on a more even playing field with other vendors, but not enough to stand out against the crowded market.
Samsung finished just ahead of Garmin to take fourth place during the quarter. Driving volumes was its Gear S2, which caught attention for its bezel-based user interface and its optional cellular connectivity. It also won the best connected consumer electronic device title at the Mobile World Congress event this week. Beyond the Gear S2 were legacy devices including the year-old Gear S and the two-year old Gear Fit. The company recently began experimenting with other form factors, including a smart belt, NFC-connected suit, and footwear.
Garmin’s long history with wearable fitness translated well for the company to remain among the top five vendors worldwide. Garmin has a well-segmented device portfolio, with devices that specifically address runners, golfers, swimmers, citizen athletes, and followers of other activities. Recently the company announced Varia Vision, an augmented reality display that mounts to a pair of sunglasses for cyclists.