Total consumer spend on CE (Consumer Electronics) at $900 billion was down year on year, but wearables grew as a share due to the expansive use cases available to consumer, such as Sports and Health, and also location-based services, productivity and communication. The wearables market is dominated by so-called Hearables, which includes audio products such as headphones and earbuds; for example, the Apple AirPods. This makes up over half (55.4%) of the volume of consumer shipments of wearables. Purchasers of wrist-worn devices (40% market share) are looking for a wider range of functions, such as biometric and activity tracking, for the realm of the quantified self and personal metrics.
Source: Futuresource Consulting All areas of wearables are expected to grow, except activity trackers. The reason for the decline in activity trackers market share is due to the fact that they are relatively basic devices, with consumers pivoting to the more complex feature sets of smartwatches and sports watches. Apple has the strongest ecosystem of all wearables vendors, with a virtuous circle built around its iOS mobile operating system and hardware products such as the Apple Watch. Apple is building on this ecosystem stickiness with its moves into content and services such as its Fitness+ subscriptions, which could be “a potential game-changer”. Chinese vendors, such as Xiaomi and Oppo, are less interested in creating an ecosystem, as they are focused on the volume of shipments. Google is a clear competitor to Apple in building a wearables ecosystem, and its purchase of Fitbit covers its Wear OS weaknesses and creates a forceful rival to Apple with its strength in software development. Mears calls Google’s purchase of Fitbit “a match made in heaven in theory” and a “statement of intent” in the wearables market. Samsung is another manufacturer that is falling short in the wearables market, with a declining market share. Mears thinks that Samsung could come back “with a vengeance” in 2022 after a year of focus on the audio market.
Source: Futuresource Consulting
Sports wearables: from pro to consumer
Sports is the primary use case for wearables, says Mears. “It’s the proving ground for new and innovative sensors. It brings the latest innovations to a wide range of consumers with purchasing power, and they trickle down into mass-market products. “Sports is the pointy end of a wedge that brings along the health opportunity along in its wake.” Blurring the line between consumer and professional sports technology, Polar is the top sports brand in wearables, although its “off-kilter go-to-market strategy has held it back somewhat”. 2020 showed Polar’s innovation in focus, especially with its Vantage V2 device. Its focus on sports recovery and using not just bio-metric feedback but bio-mechanical data is a “real step-change for the industry”. Suunto and market-leader Garmin are other sports-based wearable vendors that are moving towards the more generalist consumer market; for example, its Suunto 7 smartwatch. Garmin retains its valuable boating and aviation niches, and has a broad portfolio. Its acquisition of Firstbeat vives Garmin a “tremendous amount of intellectual property” especially in heart health and heart-rate tracking. Cycling specialist Wahoo is a competitor to Garmin in that wearables space. Amazfit is the second-largest sports-watch brand globally with its innovative wrist-based devices growing in strength, and it has a unique approach, introducing non-wearable sports products such as a connected treadmill. While professional and prosumer sports users are “event competitors”, the sports enthusiasts and casual wearables users are more like “event completers”.
Source: Futuresource Consulting
Health wearables: consumer faces challenges
Sports is the prime driver of the wearables health opportunity. At the pro end of the health wearables market are vendors such as TheoraCore, LifePlus, Omron and Navigil, who are targeting the “silver tsunami” of over 70s with their pressing mild and acute health needs. For these companies, the wearable device is a “gateway” to more profitable health services. There is great potential for tech brands in the healthcare wearable market in areas such as high blood pressure, respiratory disease, CVD and diabetes, although barriers include data-privacy concerns, sensor accuracy and FDA regulation. Withings is an important, if relatively small, player in the health wearables market, with Fitbit now the prime mover with its $55/month Health Coaching subscription business, which could be a game-changer, thinks Mears, and the next step for many vendors, including Apple who Mears predicts will introduce a Health + subscription product. • Best Fitbit • Wearable reviews Simon was Editor of Macworld from the dark days of 1995 to the triumphant return of Steve Jobs and the launch of the iPhone. His desk is a test bench for tech accessories, from USB-C and Thunderbolt docks to chargers, batteries, Powerline adaptors and Fitbits.
