Introduction

Wearable technology has shown promising growth, with applications in healthcare, fitness, retail and education using devices such as smartwatches, smart glasses, activity trackers, wearable cameras and audio, among others. Enterprise wearables are devices that are used in businesses to perform work-related activities.   In this report, we discuss the enterprise wearables market, by size and notable players. We also look at case studies of retail and healthcare enterprises using wearable devices. 

Market Overview

Total wearable device shipments were estimated at 122.6 million units in 2018 and are expected to reach 190.3 million units by 2022, growing at a CAGR of 12%, according to IDC.  And, advancements in technology have made wearable devices potentially valuable tools for business. Coresight Research estimates the number of enterprise wearable device shipments was approximately 10.4 million units in 2018, and we expect it to grow at a CAGR of 23% until 2022 to reach approximately 23.4 million in total shipments. [caption id="attachment_86804" align="aligncenter" width="574"] Note: Coresight Research estimates the total shipments of enterprise wearables based on overall shipments of wearable devices. We have applied market penetration percentages for enterprise device shipments on total shipments of smartwatches, wristbands, smart clothing, earwear and smart glasses.
Source: IDC/Coresight Research[/caption]   We estimate shipments of smartwatches accounted for around 95% of total enterprise wearable device shipments in 2018; however, we expect this share to fall to approximately 89% in 2022 as devices such as smart clothing and smart glasses gain share. Growth will be supported by advancements in technology and increased mobile penetration. Bring Your Own Device (BYOD) that allows employees to bring their own personal devices has gained traction and in return, there has been an increase in the services, applications and data stored on the devices, including more data exchanged between devices.  The coming 5G technology is also expected to boost the market as the expansion of the Internet of Things (IoT) which will support increased communication between mobile devices and business infrastructure. As discussed in our April 2019 report on 5G and retail, the number of devices connected to IoT systems is expected to rise as in-store technology improves – further boosting wearables’ potential as response times (latency) fall.

Competitor Landscape

We focus on the three largest companies that cater to enterprises based on share of global shipments according to IDC data.  In 2018, Apple had the largest market share in global shipments of all wearable devices (consumer and enterprise) at 26.8%, followed by Xiaomi at 13.5%, Fitbit with 8%, Huawei with 6.6% and Samsung with 6.2%.   Although Xiaomi and Huawei have a higher share of global shipments than Samsung, the two companies’ enterprise penetration is negligible as they focus on consumers. For this reason, we discuss Samsung, which has a substantial offering in enterprise wearables, but not Xiaomi or Huawei.  [caption id="attachment_86805" align="aligncenter" width="582"] Source: IDC[/caption]   Apple [caption id="attachment_86807" align="aligncenter" width="562"] Source: S&P Capital IQ/company reports[/caption]   Apple Wearables: Enterprise Usage and Functionality Apple Watch is the only wearable Apple offers that has applications for the enterprise sector (AirPods do not have an established enterprise use). These are some of the key enterprise apps for the Apple watch:

• Good Technology: In 2015, enterprise mobile device management company Good Technology launched an app for the Apple watch that allows users to receive Outlook emails and calendar invites. It is customizable, so the user can set what information from an email is displayed.
• Microsoft: In April 2015 Microsoft announced the launch of OneNote, PowerPoint and OneDrive apps for Apple Watch. OneNote is a free-form information gathering tool that lets people share notes, drawings, screen clippings and audio clips.
• Trello: Collaboration and planning app Trello is also available on Apple Watch. Users can add or remove “cards” that are used to track progress of a specific project and view recent notifications.
• Slack: Team communication app Slack is also available for Apple Watch. Slack is a team collaboration tool that lets users write, post, receive and reply to messages. The user can also switch between chats while on a call and see how many people are online on a group chat.

Apple has also developed enterprise-specific applications working with IBM, some of which are listed below:  [caption id="attachment_86808" align="aligncenter" width="566"] Source: S&P Capital IQ/company reports[/caption]   Cloud computing and software development company Salesforce has developed around 20 apps for Apple Watch since 2015. We discuss key Salesforce offerings below: [caption id="attachment_86809" align="aligncenter" width="566"] Source: S&P Capital IQ/company reports[/caption] Company Outlook Currently, Apple Watch’s enterprise market penetration is believed to be low, but Apple follows a more diverse approach in targeting businesses than its competitors: It caters to companies in banking, retail, IT and healthcare. We expect that with increased use of Apple hardware in enterprises and increased ability to connect Apple watches to other Apple devices, Apple watch may make inroads in enterprise in the coming years. Fitbit [caption id="attachment_86811" align="aligncenter" width="570"] Source: S&P Capital IQ/company reports[/caption]   Fitbit Wearables: Enterprise Usage and Functionality Fitbit’s B2B sales grew 8% year over year, the company reported in its 2018 results, and said it expects B2B sales to reach $100 million in 2019 with growth climbing into the double digits, driven by global growth and revenue from solutions-based software. These are some key Fitbit offerings for enterprises.

• Fitbit Care: In September 2018, Fitbit launched Fitbit Care, a connected health platform for enterprises, health plans and health systems that offers a mix of health coaching and virtual care through the Fitbit Plus app. The health coaching feature assigns a coach to corporate teams, who prepares customized plans. The coaches can use the app to communicate with clients to support them in achieving goals. Fitbit Care is sold to corporates and healthcare service providers through Fitbit’s health solutions platform. It is accessible only by invitation from an employer or healthcare provider.
• Fitbit Plus: Fitbit Plus is an application user on the Fitbit Care platform can use. It allows individuals to track advanced health metrics such as blood pressure and medication adherence. Users can track data from their Fitbit device to see trends over time. Fitbit acquired cloud-based health management firm Twine Health in February 2018 to bolster  Fitbit’s offering for patients suffering from diabetes and hypertension. Twine Health was later incorporated into Fitbit Plus. 

Company Outlook Fitbit’s clients include established corporates such as IBM and service providers such as healthcare insurance company Humana. With targeted investments in enterprise and meaningful partnerships and acquisitions, Fitbit is expected to increase its prominence in healthcare and corporate wellness programs. In 2018, total active users increased 9% year over year from 25.4 million to 27.6 million. Of the 27.6 million active users, 6.8 million were from Fitbit Health Solutions (FHS). Revenue from paid premium services grew 34% year over year in the second quarter of 2018, the quarter after Twine was acquired.  In 2019, Fitbit says it will focus on offering more affordable devices to make them more accessible. While it expects average selling prices to fall, the company expects its B2B revenue in 2019 to increase by or more than 10% year over year, to $100 million. Fitbit hopes to monetize its active user base on the Fitbit Plus app through its premium offering, which gives users detailed weekly reports in areas such as food logs, activity and sleep.   Samsung [caption id="attachment_86813" align="aligncenter" width="570"] Source: S&P Capital IQ/company reports[/caption]   Samsung Wearables: Enterprise Usage and Functionality Samsung offers enterprise solutions in industries including retail, finance, hospitality, transportation, public safety, government and education. In the US, Samsung wearables offered include Gear and the Galaxy Watch, priced between $199.99 and $379.99. Samsung offers app customization and its own open-source operating system, Tizen, that makes it easy for developers to customize features. Below are Samsung’s key wearable offerings for enterprises:

• Galaxy and Gear watch: Samsung’s two wearable devices that consumers and enterprises can use. The Galaxy and Gear watches are equipped with Samsung’s enterprise mobility management (EMM) software that makes it easier to manage data. The watches also use the Tizen operating system,  and open source software that makes it easier for enterprises to customize or develop applications suited to the company workflow. Samsung also offers customization software Knox, which lets businesses upload data, logos and graphics onto the wearable device through the app.
• Tizen: Samsung watches use its own open-source operating system, Tizen, developed by Samsung and Intel. The applications on Tizen are highly customizable and can be launched on different platforms. Tizen and Samsung’s inbuilt safety platform Knox provide enterprise-specific software and services.
• EMM: Samsung SDS, the information and communication technology (ICT) arm of Samsung, offers EMM for enterprise wearables that bolsters security of the wearable device. Administrators can remotely manage the applications installed on the wearable device, prevent certain apps from being loaded and other features that make them less vulnerable to malware. 

Company Outlook Samsung has evolved its business around software and solutions offerings for wearable devices and sought to demonstrate the efficacy of its wearables. In October 2018, Samsung partnered with HSBC’s flagship branch at 452 Fifth Avenue in New York  offering employees a Samsung Gear S3 watch, to test the efficacy of its wearable in the banking sector. The initial results from the pilot experiment implied reduced customer wait time and improvement in communication between team members. In June 2018, Samsung partnered with operations platform company Alice, which develops solutions for the hospitality sector, to create an app exclusively for the Viceroy Hotel Group. Through Alice’s solution, all hotel employees receive a silent vibration alert on their smartwatch whenever a guest requests a service. This was highly successful, and cut average response time to just one minute from two to three minutes previously. Samsung is also driving innovation in retail enterprise wearables designed to keep in-store teams connected. Samsung’s Enterprise Sales Director Hamshy Raveendran said, “Retailers understand that if they need to meet the hyper-connected consumer, they need to equip their associates with the best-in-class tools, powered by capabilities like AI and voice to provide that high-touch personalized experience such as phones, tablets and wearables.” 

Recent Innovations

Below are some recent innovations in the enterprise wearables space: [caption id="attachment_86814" align="aligncenter" width="568"] Source: Company reports[/caption]

Industry Case Studies

Wearable devices are opening new avenues for organizations to give employees real-time, hands-free access to information and applications that help them do their jobs more efficiently.  Next, we look at wearable use in retail and healthcare.

Retail

Wearables are becoming more mainstream in retail, helping retailers improve the customer experience. Also, as wearables become common, technologies such as radio-frequency identification (RFID) and mobile payments can enhance the shopping experience by eliminating the need for check out. In June 2016, storage and kitchenware retailer The Container Store (TCS) introduced voice-controlled wearables offered by wearable tech company Theatro after a successful pilot. TCS rolled out the technology in 70 of its 80 stores. The wearable is a credit card sized voice-controlled device that can be connected to Wi-Fi and gives staff access to store information such as inventory and product location. According to investment intelligence and data provider Grata Data, Apple filed for 275 wearable technology patents in the US in 2018. Apple was granted 750 wearable technology patents in 2018, for a total of 1,025 filed and granted. Apple was followed by Walmart with 91 patent filings and Amazon with 19 filings in 2018. Patent filings for wearables remain focused on consumer devices, but Coresight Research believes technology advances will push wearables into retail use. [caption id="attachment_87230" align="aligncenter" width="574"] Source: Grata Data[/caption]  

Healthcare

The healthcare sector is seeing new technologies emerge in the wearables market, which in turn has driven adoption. As cloud connectivity and Internet of Things (IoT) abilities improve, wearable devices will become more useful in healthcare. In November 2017, the Food and Drug Administration (FDA) approved a pill with a built-in sensor that can track when the person ingests the medication. The sensor embedded in the pill sends real-time notifications to the wearable or phone. The drug is used to treat schizophrenia and bipolar disorder, both conditions for which patients often do not take their medication as prescribed. In March 2016, Samsung partnered with remote health platform Reemo to provide a wearable solution to retirement home Ohio Masonic Home Resident. Samsung provided a solution on its Galaxy Gear S2 smartwatch that enables residents to operate lights, locks, thermostats and other appliances using simple hand gestures. Staff also get notifications if the wearable detects unusual behavior that may indicate a problem, so they can check on the patient.  Healthcare is expected to benefit most from wearable devices, thanks to developments by Fitbit and other health tracking wearable devices. The market for healthcare wearable devices is expected to generate $20 billion in annual revenues by 2023, according to market research company Juniper Research.

What We Think

The global enterprise wearables market has become more dynamic, but is still in the innovation stage. We expect new market entrants in the coming years as wearable technologies improve. We also expect growth in the healthcare sector to outpace other verticals as the opportunity and benefits are so much greater than in other sectors. In retail, we expect smartwatches to play a major role in keeping associates connected and providing real-time information about stock and other store information.