With the giant Mobile World Congress poised to kick off in Barcelona on Sunday, attention turns to how mobile is increasingly being incorporated into everyday objects – not least clothes. And fashion brands are driving the next evolution of the wearable market.
Currently one in five adults wears a smart watch or fitness strap and by 2020, the wearable tech market will be worth 30 billion euros globally – proving the market is one to watch. Globally, this equates to 105 million wearables shipped in 2018, a year-on-year increase of 10%, according to the latest Wearable Technology market report from Futuresource Consulting.
To date, technical features have led the race, with most devices competing solely on battery life and capabilities. But technology is no stranger to fashion; from smart fabrics, models wearing Google Glass on the runway, to fashion designer Adam Selman sporting the next generation of payment enabled dresses on the catwalk – wearable tech is increasingly claiming its place in fashion.
“With fashion shows taking place in New York, London and Milan this month and Mobile World Congress Barcelona about to get underway, there’s no better time to talk about the future of wearables. In the fashion world, trends such as athleisure remain steadfast,” says Jorn Lambert, Executive Vice President, Digital Solutions Mastercard.
“Meanwhile,” he continues, “technology is getting faster and smaller, speaking to those same consumers seeking minimalist and seamless, but well-designed options. Now technology and fashion brands need to work together to end consumer confusion over whether devices are fashion accessories, tech hardware or fitness tools.”
Fashion and technology both act as extensions of oneself and for wearable technology to be attractive to consumers it must appeal to both. Be it a diamond cuff, a metallic watch, or gold-plated ring, smart jewellery that allows consumers to unlock new goods while looking good is essential to the next stage of wearable technology’s growth. It’s a promising way for brands to enter a new market and reach new, connected and digitally native customers – wearables are multi-use, but cheaper than most mobile devices.
For technology providers, the challenge is making processes as smooth and unobtrusive as possible to empower fashion brands to design wearables that first and foremost look like high-end accessories. One of the first companies to enter this area was Sony with their smart watch strap – Wena. The “Wear Electronics Naturally” strap is designed to make everyday activities easier to do by incorporating speedy contactless payment, advanced fitness tracking and direct link-ups for phone notifications – all into a luxury timepiece design.
Making the payment process as easy as a tap or a swipe means payment-enabled wearables will be the next phase of consumer desire for practicality infused with ‘Insta-ready’ looks. Indeed, payment-enabled wearables are already available in 21 EU countries and over 30 different devices.
But we are not there yet. “A key question in the industry is at which point we will see wearable devices shift from being a fitness or mobile accessory, towards becoming a standalone device” says James Manning Smith, Market Analyst and wearables expert at Futuresource,
Although the rate of growth will begin to decline from 2020, Futuresource expects growth to continue throughout the forecast period, with shipments expected to exceed 145 million units worldwide in 2022, achieving a retail value in excess of $27 billion. This will be driven predominantly by replacement sales and the ongoing uptake of smartwatches and wireless watches.
“There’s still plenty of competition in the segment,” says Manning Smith, “I expect to see increased investment in the product area, fuelling a battle for health and fitness feature inclusion and improvement across a range of devices”.
Qualcomm’s recent Wearable SoC release is yet to be fully adopted in the current smartwatch product line-up, however the platform looks set to ignite innovation across the Wear OS device space during 2019. Google’s recent acquisition of $40 million investment in Fossil Smartwatch IP highlight the technology giant’s commitment to wearable technology, leaving the market anticipating a hardware release from Google or potential revamp of its Wear OS platform.
Looking to the brands, Apple regained its position as the largest connected watch vendor during Q4, totalling 20 million Apple Watch shipments during the year, however in volume terms it has been challenged by Xiaomi throughout the year whom have gained in volume rankings during 2018. Fitbit and Fossil remain challengers to Apple’s dominance on the smartwatch market, with Fossil competing through offering a wide range of smartwatch styles and Fitbit competing on price, with its $200 Versa. In 2019, we expect vendors to benefit from a strong market for smartwatches, with tailwinds driven by replacement and upgrade purchases generating strong market growth.
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