Each month, our Consumer Tech Briefing discusses developments in the world of technology. This month, we focus on wearables—considering recent data on the scale and composition of the market, as well as exploring a range of products and use cases.

What’s the Story?

While the wristwatch is arguably the first example of wearable tech—introduced in the 16th century—wearables became a major smart technology around the time that the Apple Watch was launched in 2015. The best applications of wearable tech so far are focused on everyday activities, such as telling time, making payments and most importantly, monitoring health and wellness—in addition to security, medical and industrial uses.

Why It Matters

Thus far, no “killer app” for wearables has emerged, and there is currently still space for an indispensable product to be designed. The portability and versatility of current wearable tech products make them suited for a wide variety of applications, as depicted in Figure 1. [caption id="attachment_113709" align="aligncenter" width="700"] Source: Coresight Research [/caption]  

Wearable Tech Insights

Wearables Market Overview Estimated at nearly $50 billion in 2020, the global market for wearables is growing at 15.7%—driven by expansion in head-mounted displays and VR headsets in particular. Smartwatches and other wearables each account for approximately 40% of the market, with head-mounted displays accounting for the remaining 20%. The global market breakdown is shown in Figure 2. [caption id="attachment_113710" align="aligncenter" width="700"] Source: Statista/Coresight Research[/caption]   The figure below shows the global market share by unit through the second quarter of fiscal year 2020 for major wearable consumer-electronics products, including earwear (i.e. headphones), wristbands, smartwatches and other items. We see that the top six vendors dominate the wearables market, accounting for nearly two-thirds of the market by unit volume. [caption id="attachment_113711" align="aligncenter" width="700"] Source: IDC [/caption]  

• Smartwatches

Smartwatches account for approximately 40% of the global wearables market in dollar terms, with many companies adding new features over time—particularly in relation to health and wellness. Since their introduction, smartwatches have integrated many of the features of fitness bands, and many makers of fitness bands have subsequently added smartwatch features—blurring the boundary between the two products. Traditional fitness band manufacturers include Fitbit and Garmin. In terms of the global smartwatch sales over the past few years, unit volume has peaked in the fourth quarters of each year due to holiday shopping, suggesting that smartwatches are a popular gift purchase (see Figure 4). [caption id="attachment_113726" align="aligncenter" width="700"] *Includes only the quarters for which data are available
Source: Strategy Analytics [/caption]   Figure 5 shows the global smartwatch market share by year for 2017–2019. Apple is the market leader by a large margin, although its share has eroded over time as new vendors have penetrated the market. [caption id="attachment_113713" align="aligncenter" width="700"] Source: Counterpoint Research [/caption]   Apple Continues To Innovate Apple has launched new features, particularly in relation to health and wellness, with each new version of its smartwatch—one of the key reasons behind its leadership of the market. The most recent Apple Watch Series 5 added several new features:

• Heart rate monitoring/ECG (electrocardiogram)
• Menstrual-cycle tracking
• Breathing tracking
• Noise-level tracking

New product versions are typically released by Apple every September. Rumored features for Series 6 include the following:

• Sleep tracking
• Blood pressure tracking
• Blood oxygen detection
• Mental health features
• Additional fitness features for dance, strength training and cool-downs

Many of Apple’s current and future functions are already offered in products from other vendors, including the Withings ScanWatch, which includes heart rate monitoring, sleep tracking and oxygen saturation monitoring. The company has revealed plans to add a sleep-apnea detection feature soon. Blood pressure monitoring is also currently offered by the Omron HeartGuide smartwatch. [caption id="attachment_113714" align="aligncenter" width="460"] ScanWatch
Source: Withings [/caption]  

• VR Headsets

The 2019 global VR headset market breaks down as 31% commercial applications and 69% consumer applications, according to Statista. From 2018 to 2019, wearables brand Oculus, which is a subsidiary of Facebook, gained a larger share in this market, while vendors such as Sony witnessed a decrease in their market dominance (see Figure 6). Click here to read more about applications for VR technology in retail. [caption id="attachment_113727" align="aligncenter" width="700"] Source: Statista [/caption]   With consumers required to quarantine at home, the outbreak of Covid-19 triggered a jump in the number of purchases of computer-gaming hardware. However, while demand increased, supply-chain bottlenecks related to the pandemic created component shortages, which slowed the production of VR headsets. Facebook is reportedly increasing production of Oculus headsets by 50% in 2020 compared to 2019, to a total of around 2 million units. Health and Wellness Health and wellness-related wearables have become increasingly relevant to US consumers in recent times. In addition to the coronavirus pandemic, one of the driving forces behind the growing interest in wearables is the skyrocketing cost of health care in the US; the modest cost of a wearable device to track a condition often pales in comparison to the cost of treating it. The wide variety of type sensors available enable the monitoring of multiple conditions by measuring different metrics. The focus on health and wellness also extends beyond avoiding illness to feeling as good as possible. We discuss some examples of innovations in wearable health and wellness products below.

• Smart Belts

Welt’s Smart Belt Pro uses sensors to analyze the wearer’s gait and detect abnormalities that can determine the risk of the wearer falling. One target audience for this product is senior consumers, who may have an increased risk of injury through falls. If the device detects that the wearer is at risk of falling based on their gait pattern, it sends an alert to the wearer’s or caregiver’s smartphone. [caption id="attachment_113716" align="aligncenter" width="700"] Welt Smart Belt Pro and Gait Analysis
Source: Welt [/caption]  

• Smart Pajamas

Xenoma’s eSkin Sleep and Lounge pajamas are a smart apparel wearable targeted at elderly people. The product is able to detect falls and can determine whether the wearer is tripping or slipping. The pajamas also monitor general activity and sleep patterns. [caption id="attachment_113717" align="aligncenter" width="700"] Source: Xenoma [/caption]  

• Sleep Devices

Beddr’s SleepTuner is a device designed to be worn on the forehead during sleep to analyze sleep patterns. The tech can identify bad sleep habits and conditions such as insomnia and apnea. The product also monitors oxygen saturation levels, and the company provides a network of sleep experts for coaching and advice. [caption id="attachment_113718" align="aligncenter" width="480"] Source: Beddr [/caption]  

• Hearing Assistance

Lizn earpieces include directional microphones and advanced sound-processing hardware to filter and amplify the voice of the person facing the listener. This improves speech comprehension and face-to-face conversation in noisy environments. The device also functions as wireless earphones that can play music and make phone calls. [caption id="attachment_113719" align="aligncenter" width="480"] Source: Lizn[/caption]  

• Pet Wellness

The wellness wearables trends is not just for humans, with consumers also focusing on the health of their pets: The Whistle Fit is a collar-worn fitness tracker for dogs that monitors animal-behavior metrics—such as food consumption, distance traveled and minutes active. The associated smartphone app can generate daily activity goals based on the dog’s breed, weight and age, as well as creating weekly reports. The latest Whistle Fit models include GPS-enabled location tracking and a built-in light. [caption id="attachment_113720" align="aligncenter" width="480"] Source: Whistle [/caption]   Wearables of the Future

• Will Smart Glasses Make a Comeback?

In 2013, Google introduced Google Glass—an eyeglass-shaped display with an integrated video camera, initially sold an at eye-popping price of $1,500. The device received a great deal of criticism, particularly regarding privacy issues, and was withdrawn from the market in 2015. In 2017, Google announced the Google Glass Enterprise Edition for industrial applications. There are signs that the company may be planning to re-enter the smart glasses market. In July 2020, Google acquired North (originally Thalmic Labs) for approximately $180 million—naming it as a pioneer in human-computer interfaces and smart glasses.

• Rumored Future Apple Wearables

Apple is reportedly working on its own long-rumored augmented-reality eyewear product, Glass. There is code for such a device embedded in frameworks within iOS 13—its smartphone operating system—but the product has not been confirmed and the launch date is unknown (estimates range from 2021 to 2023). Apple is reportedly also working on its own VR headset.

What We Think

The wearables market has passed the hype stage and has delivered several major new global product categories—such as smartwatches and VR headsets. Many of its most useful applications are industry and safety/security. There is also much innovation in wearable products in the health and wellness space. Growing consumer interest in feeling good, rather than just staying healthy, has sparked a boom in new gadgets that can monitor our every function, particularly sleep and exercise. These health and wellness wearable can vastly improve the quality of life for people with conditions that require monitoring, such as diabetes. The steady improvement in computing, sensor and wireless communication technologies is likely to engender new and previously unimagined categories of wearables that will continue to improve our everyday lives. We outline some other examples of wearables and the implications of this growing global market below: Implications for Brands/Retailers

• Brands can add technology to apparel to increase functionality. For example, like the smart apparel example discussed above, Visjax have designed smart cycling jackets that contain embedded LED lighting to make cyclists more visible to motorists.
• Brands can embed technology for consumer information purposes. Activewear maker Spyder has embedded near-field communications technology in its ski jackets that provides real-time snow reports and local maps.
• Brands can also include technology for product authentication and identification purposes. RFID (radio-frequency identification) tags can be embedded in apparel for loss prevention, and to verify authentic items and identify counterfeits. Other applications include tagging high-value items, such as luxury goods, to identify their owners for admission to VIP events.

Implications for Real-Estate Firms

• Wearables can be used for entry, identification, commerce and many other functions in malls and at events. For example, Disney uses MagicBands at its theme parks for seamless entry into the parks, for ride entry and to speed up purchases by eliminating cash usage. These bands have more functions than the typical band worn at concerts for cashless purchases—they include a processor and wireless communications capabilities.

Implications for Technology Vendors

• Technology vendors face the endless task of making devices smaller, lighter and more battery-efficient.
• Competing with the market-leading Apple Watch is challenging, as it gains new capabilities with every new version and absorbs functionality from other wearable categories, such as fitness bands.
• Finally, vendors must deal with a diverse number of sensors and potential metrics used for health and wellness tracking, in addition to the challenge of finally finding the “killer app” for wearables.