Right time for wearable devices
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E-mail China Daily, October 19, 2015
Data released by consultancy firm iResearch in Beijing showed that the total shipment of wearable devices, including smart watches and bands will top 40 million by the end of this year, an expected jump of 128 percent compared to 2014. By the end of next year, the number is poised to increase by 85 percent to 75 million.
Already the Chinese wearables market is predicted to hit 11.49 billion yuan ($1.8 billion) by the end of this year, and will grow another 47 percent to 16.94 billion yuan ($2.7 billion) by 2016, according to iResearch.
"By catering to individual demands with this technology, we are seeing a new niche developing with massive opportunities," Rust said.
Figures released by Global Systems for Mobile Communications Alliance, an industry body, showed that wearable child tracking devices are helping fuel strong demand here. Telecoms operator China Mobile has estimated that there are up to 50 child tracker bands on the market.
But this is not the only area of growth. A survey from the Consumer Electronics Association in the US reported that 67 percent of Chinese consumers used wearable smart watches or bands to monitor their fitness. Nielsen has come up with similar findings.
"Today there is a huge emphasis on aesthetics and design in technology, while health is an increasingly important topic for today's Chinese consumers," Rust said.
"By creating an outstanding consumer experience that focuses on these attributes, wearable tech will enjoy high growth in the near future."
Low prices have helped fuel sales of fitness smart bands. They use sensors that count the number of steps a person wearing a device has taken before relaying that information to a smartphone app.
Xiaomi's sales success can be largely attributed to that. The company's fitness bands retail at just 79 yuan each.
At the other end of the scale is the upmarket smartwatch segment. Apart from Apple's products, sophisticated models include the Kairos Watch range, which was released by the South Korea-based company of the same name last year and retails from $499 to $1,199.
Looking like a conventional Swiss-made mechanical timepiece, the Kairos can display text messages, notify the wearer of incoming calls and interact with smartphones and tablets.
Early this month, LG Corp announced plans to upgrade its Urbane 2 smart watch with an all-metal design. It will have 4G LTE connectivity and high-quality voice controls. The South Korea-based electronics giant has yet to reveal a price range for the Urbane 2 or a launch date.
Leading Chinese companies are also moving into the market. Apart from Lenovo's Moto 360, Huawei started selling its high-end Huawei Watch in Germany last month.
Again, it looks similar to a mechanical timepiece but has all the "smart functions", such as texting and e-mail. Prices range from 399 euros ($453) to 699 euros. A Chinese launch date has yet to be announced.
"A large number of Chinese companies rush to do the same thing once a product is popular," Yu Chengdong, head of the consumer division at Huawei, said. "But most of them will be struggling in three to five years time. At Huawei, we stick to the rule of making only top-class products."
Today, the Chinese wearable industry is like a toddler just starting to learn to walk. Smaller players are likely to fall by the wayside as established brands eat up market share.
Only leading companies such as Xiaomi, which has a huge shipment of products and a large consumer base, will be able to work on the "small-profit-quick-return" rule.
"We expect the wearables market to become far more creative," Yang Yuchuan, deputy general manager of the wearables business division at Media Tek Inc, a leading tech company in Taiwan, said.
"China-specific wearable devices will continue to emerge on the market in the next couple of years from the big brands or even from startups."
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