Global wearables market skyrockets, but growth will slow without innovation

The global wearables market is enjoying its eighth consecutive quarter of growth, with vendors shipping out 11.4 million products in the first quarter of the year, according to a report from research firm IDC.

Those 11.4 million products are a 200 percent spike compared to the 3.8 million wearables shipped a year ago. However, continued growth is tied to innovation and whether industry leaders, such as Fitbit, and newcomers realize the user expectations regarding services and use.

Fitbit's leadership is tied to several factors, such as device quality and user experience, Ramon Llmas, IDC wearable research manager, told FierceMobileHealthcare via email. Llmas said he hopes the company doesn't have a knee-jerk reaction to run into the smartwatch market, following the release of Apple's Watch.

"There's been a groundswell of interest for the company to go into smartwatches that allow for third-party applications, but I disagree," he said. "That radically changes the value proposition for Fitbit, instead of focusing on its core mission: change behaviors to fit a healthier lifestyle."

The IDC report arrives just a few weeks after Fitbit announced it was refiling for an initial public offering with new documents aiming to raise $358 million given an estimated value of $3.3 billion. The revised filing came on the heels of a lawsuit by rival Jawbone that claims Fitbit is poaching employees; in addition, recent Argus Insights research claims the wearables maker is struggling and that its leadership in wearables is less than 50 percent. 

Llmas says Fitbit's continued market leadership is tied to focusing on providing users with more prescriptive data and insight on practical areas, as well as expanding features tied to user interaction.

"Don't tell me to walk more, but provide insights on what else I can do better," Llmas said. "Skip coffee? Go to bed earlier? Or how about telling me that I'm about to catch a cold? Now that would be sweet."

The research firm predicts that dropping price points on wearable tools--including displays, sensors and processors--also will drive the greater shipment figures.

"They are all becoming less expensive, and vendors are in a position to either pocket or pass the savings to the customer," Llmas said. "Price erosion will be gradual and felt in different areas faster than others, like a health and fitness tracker versus a smartphone."

The market winner, he believes, will be the one with the best brand.

"The tough part is also differentiation, because so many devices and vendors are doing the same thing," Llmas said. "Let's get creative and bring in new elements, like social media and experiences; connecting to IoT systems; focusing on specific niches, especially within the enterprise; and we're still just scratching the surface on what health and fitness applications can be brought to bear."

For more information:
- access the IDC report
- read the announcement

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