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Low price, more functions key to wearables take off

Posted: 01 Sep 2014 ?? ?Print Version ?Bookmark and Share

Keywords:wearables? body electronics? smart watches?

Market research firms are all positive about the future of the wearables industry, forecasting millions of shipments for the devices and its components not only in 2014 but also in the years to come within the decade.

For example, a whitepaper published by IHS last year predicted that microelectromechanical systems (MEMS)a key component in wearable consumer devices such as fitness trackers, smart glasses, and smart watcheswill have a shipment of more than 40 million units this year. By 2015, shipments will more than double to almost 100 million units, and past 180 million by 2018.

Matt Wilkins

Wilkins: The willingness to try new technology is one such cultural factor affecting the Asia Pacific region.

This forecast is not too far from tech giant Cisco's estimate of 177 million devices sold by 2018 and from the 170 million units predicted by ABI Research for 2017. On the other hand, an IDC research showed a much conservative calculation with 19 million units in 2014 and 112 million units in 2018.

Given the optimistic prognoses by these research firms on a global scale, how does the wearables industry then fare in Asia?

Matt Wilkins, director for tablet and wearables at Strategy Analytics, said that Asian consumers, particularly in China, have higher levels of enthusiasm for wearable devices than those in the United States and United Kingdom, based on consumer surveys conducted by the company. "The willingness to try new technology is one such cultural factor affecting the Asia Pacific region," he said.

But for these body electronics to be more successful, they have to be "useful." This is the opinion shared by Mark Koh, senior analyst at Frost & Sullivan APAC, emphasising that these devices should be able to "sustain the interest" of consumers "aside from being a shiny object."

Mark Koh

Koh: For wearables, one of the biggest issues is functionality.

"For wearables, one of the biggest issues is functionality," he said. "Form is too focused on fashion sense... Fashion tends to be a big driver."

Charles Anderson, head of telecoms and mobility at IDC Asia/Pacific, supported the idea. He said that for wearables, such as smart watches, to accelerate, "you got to somehow convince people what you can do with it. A notification is convenient, but it's not worth 500 bucks to pay for a notification. [People] want to see what the applications will actually be," he said.

"[Wearable devices] run the risk of building up a lot of excitement, and then people are starting to realise that 'Oh, it doesn't actually do that much'," he added.

Apart from an enriched functionality, Anderson stressed that price is a huge factor in Asia for wearable devices to become mainstream like how smartphones and, to a certain extent, tablets are today.

"Price point is going to be one [huge factor] for sure because you want to go after the masses, that billion middle class... Price point has to come down," he said, adding that devices should strike a balance between good quality and low prices for the wearable market to "really take off."

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