Wearable Tech: Digital Consumers Still Need Convincing
In a global digital landscape driven by surging consumer communications expenditure, there are few segments that can still offer the creative opportunities like the wearable tech market. Though attracting much hype over the past year, wearable smart technologies are yet to become necessary accessories even among wealthy developed-market consumers. Design flaws, cost concerns and narrow niches have held back the segment from entering the mainstream market, despite the recent rapid success of other telecom-focused products such as music players, smartphones and tablets. However, the lack of a clear brand leader and a product yet to capture the public’s imagination offers opportunities to capture what can potentially become a giant global market for wearable tech.
Global Telecom Equipment Expenditure and Smartphone Retail Value: 2008-2017
Source: Euromonitor International from national statistics/Eurostat/UN/OECD/trade sources
Note: Figures are in constant 2013 terms; data for 2014-2017 is forecast
Consumers Require More Conviction to Shell Out on an Added-Value Gadget
In 2013, close to 90.0% of the world’s homes had a mobile telephone. Among developed-world homes, large shares of consumers already possess a web-enabled smartphone, an MP3 player and a tablet or laptop computer. It is thus a tough sell to convince end-users they require another piece of digital equipment whose functions are largely covered by other devices. Yet this is the challenge facing the emerging wearable tech market, which consists of wearable digital devices such as smart watches and which continues to stutter and stumble through an early phase of weak designs and niche-market acceptance. Wearable tech is at present largely the preserve of tech geeks and fitness fanatics, remaining an additional and often unnecessary expense for most consumers.
Design and Fashion Hold the Key to Mainstream Acceptance
The present wearable tech product range is weak. Google Glass is an incomplete product, Samsung’s Galaxy Gear smartwatches are unattractive while the various digital fitness bands feel like a fad. None of the wearable tech offerings have managed to become “must-have” among consumers, which is down to design and marketing failures. The sector needs an “iPhone” torchlight moment: a product able to capture the imagination of consumers and drive demand, just like Apple’s device helped launch a global smartphone market whose retail value surged by almost 500% in real terms over 2008-2013.
Wearable tech developers certainly cannot be blamed for a lack of software innovations. The CES 2014 consumer electronics tradeshow in Las Vegas spotlighted products ranging from devices able to monitor UV intensity for beach-goers to wristbands that monitor sleep quality. Yet few devices could claim to be fashionable. Consumers wear unnecessary products all the time (such as ties and jewellery), so theoretically a wearable device with practical usage should be appealing but it must first become a fashion trend.
Fragmented Market Offers Even Field in Chances for Success
Despite the still large challenges facing wearable tech, it is set to be one of the most dynamic consumer electronics segments going forward, forecast to reach US$27.0 billion in retail value sales by 2018. Opportunities to succeed are still fairly evenly balanced for both small players and the biggest digital vendors. For example, the crowdfunded Pebble smartwatch has been one of the hits in the segment despite competition from the likes of Nike and Samsung. A start-up brand with the correct marketing strategy and original product could yet be the guiding light for the industry. Attaching added-value connectivity in a wearable device to mobile gaming, app stores, digital banking, social media or diet can offer major returns to innovative developers with a foresight in predicting consumer habits. However, until marketers can crack this lucrative industry, most consumers are likely to stick to their smartphones in serving their daily digital needs.