The Wearable Gold Rush

In case you haven’t noticed, the wearable technology segment is the fastest growing consumer electronics market in the world. You can expect nearly every company in the consumer electronics space to either enter the wearable market or put their foot on the gas pedal. There are already over a dozen companies with different products but only two with any meaningful volume–Apple and Fitbit. When a market is growing at over 100% YoY, we can expect to see it get even more crowded very quickly, both with products from companies you have heard of and from companies you haven’t.

While I’m skeptical, for now, that any other vendors will garner meaningful share from Fitbit or Apple in the foreseeable future, I still view this gold rush as a positive for the segment. We are still early in the wearable computing market. Companies and consumers need to experiment with different products. This is how a segment matures. With each generation of the product, consumers refine their interests, needs, wants, etc., and develop their own personal tastes. I love this visual of the car industry because it the best depiction of what a post-mature (a market that has been mature for a decade or better (something not true of any consumer computing category yet)),looks like.


There is a car for every type of need or desire. A post-mature industry is extremely segmented. Now cars are expensive, as are PCs, so looking at things like wearables, which many will sell for well below $300, we can expect this segmentation to be even richer at some point. At least until the types of sensors that collect data from our bodies we deem useful and valuable get integrated into all our clothing and apparel. I expect consumer electronics companies, or ones aspiring to become consumer electronics companies, to look for areas of differentiation within this segment. There is an interesting challenge, however.

This is not your typical area of consumer electronics. Wearable technology is not like PCs, TVs, stereos, or other categories they are used to. This category, similar to cars, fashion and even smartphones, is deeply personal. Deeply personal purchases generally tend to have some emotion attached. Price is not, and rarely will be, the driving factor. Commodity electronics dynamics likely will not apply. Things like brand, quality, and design all matter when a purchase is personal and emotion trumps price. This is where so many who chase the wearable gold rush will fall short. It’s also why those companies with a focus on the design as well as the utility will have a stronger chance. I’m not just talking about Apple here since the category is large enough to sustain a number of players.

Back to the point of why the gold rush is good. We need more companies to experiment and throw ideas out there so we can see which ones stick. This is a key part of evolving the category. There are tons of sensors still waiting to go mainstream. Things like sweat, blood oxygen, UV, air quality (especially for China), glucose, and many more. Do consumers care about these? If so why? What are the positives for behavioral change once we have more sensors collecting data on our bodies? What are the software or services potentials around them? These are all things that need to be fleshed out in the market.

There are some very interesting changes to the healthcare industry coming as well. Dynamics that I believe will impact the wearable segment and further strengthen or weaken those who chase the wearable gold rush. More on this topic next week.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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