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Watch Boom Says It’s Time for Wearable Tech

1 April 2015 in Trading Ideas

Once again, Apple is setting the pace in a corner of personal technology that looks like it’s about to explode.

Wearable technology devices are seeing a growth surge that is likely to continue over the next few years, helped by the soon-to-be-released Apple Watch, according to a recent report by research firm IDC.1

The research outlet said it expects 45.7 million wearable tech gadgets to be shipped globally this year, up 133% from 2014.

By 2019, IDC sees volumes of 126.1 million units, or an average growth pace of 45%. In addition to Apple’s new watch, the market could be propelled higher by other smartwatches like Motorola’s Moto 360 and Samsung’s Gear watches.

Wrist-worn wearables, including bands, bracelets, and watches, are expected to account for more than 80% of the market over the coming years, IDC said.

In a recent piece for USA Today, Mike Bell of Intel’s New Devices Group explained that for today’s serious athlete, running newbie or weekend exercise warrior, wearable technology is no longer a high-tech novelty; it’s an essential training tool.2

“That’s why in 2015, the hottest new tech devices won’t be stored in our purses or pockets — they’ll be worn on our wrists, plugged into our ears and even embedded in our clothes and shoes,” Bell wrote.

IDC also sees strong growth in smart clothing— shirts, socks, hats, and other products with computing power—along with connected eyewear and earwear.

“Smart wearables are about to take a major step forward with the launch of the Apple Watch this year,” said IDC analyst Ramon Llamas.

“The Apple Watch raises the profile of wearables in general and there are many vendors and devices that are eager to share the spotlight,” Llamas added. “Basic wearables, meanwhile, will not disappear. In fact, we anticipate continued growth here as many segments of the market seek out simple, single-use wearable devices.”

IDC analyst Ryan Reith said that fitness bands, the early leader in wearables, have come down in price and are now being bundled with smartphones at little cost.

“The explosion of wearable devices was clearly led by fitness bands, which until recently commanded prices that provided comfortable margins, but those days are changing,” he said. “The market is quickly shifting toward higher-priced devices that offer greater functionality.”

IDC said it sees “smart wearables” with the ability to run outside applications growing 510% this year to 25.7 million units, while “basic” wearables will grow some 30% to 20 million units.

One of our newest motifs, Wearable Tech, looks to capture the opportunity in this growing sector. Since its inception in January 2014, the motif has increased 19.8%. In that same time, the S&P 500 has risen 16.3%. So far in 2015, the Wearable Tech motif is up 5.0%, while the S&P 500 is up 1.8% in that time period.

1“Apple Watch to spark wearable tech growth: IDC,” phys.org, March 30, 2015, http://phys.org/news/2015-03-apple-wearable-tech-growth-idc.html, (accessed March 30, 2015).

2Mike Bell, “How wearable technology will shape the future of sports,” usatoday.com, March 20, 2015, http://www.usatoday.com/story/tech/2015/03/20/how-wearable-technology-will-shape-the-future-of-sports-mike-bell-intel/25079157/, (accessed March 30, 2015).

  1. Jes
    16 Jul at 12:15 pm

    The part that I’m really impressed by is the fashion industry’s adoption of these technologies. Many higher end designers are collaborating to create really beautiful wearable tech. We’re no longer stuck wearing rubber wristbands. There are so many really cool options out there.

    These are some of my favorite wearable tech piecies: