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Supply chain: Crucial factor to wearable success

Posted: 04 Jun 2015 ?? ?Print Version ?Bookmark and Share

Keywords:IDC? wearable? supply chain? Apple Watch? OEM?

To say that the market for wearables is shaky is an understatement. Considering that it is a relatively new consumer electronics segment, the supply chain needs to be adaptable to probable extreme demand shifts. Needless to say, the do-or-die nature of wearables has a direct correlation with how flexible the supply chain is.

"There's been a big shift," said Bashar Nejdawi, EVP and president, North America Mobility for Ingram Micro. "Now, it's all about building in real time and leveraging live forecasts coming to the point of sale systems and advanced planning systems."

The market for wearable products is large and growing. This year, OEMs are predicted to ship a total of 45.7 million wearable devices, up 133.4 per cent from the 19.6 million units shipped in 2014, according to the most recent forecast data from the International Data Corp. (IDC) Worldwide Quarterly Wearable Device Tracker. By 2019, IDC estimates that total shipment volumes will hit 126.1 million units, resulting in a five-year CAGR of 45.1 per cent.

Wearable device shipments

Worldwide Wearable Device Shipments, Market Share and YoY Growth by Product, 2014-2019 (Units in Millions) (Source: IDC Worldwide Quarterly Wearable Device Tracker, March 30, 2015)

Today, the ability to cash in on the potential of this market is tied directly to the ability to react quickly to demand, whether organic or driven by marketing activities and promotions. "Now, the supply chain uses a high component of technology including big data, analytics and other technologies," said Nejdawi. These technologies, used correctly, have the potential to support and empower the breadth of supply chain activities, reaching even into the warehouse for tracking and moving products and to the end of the product life cycle to support reverse logistics activities, he added.

Although the push to get products to market is universal to the electronics market, mobile products are particularly susceptible to supply chain shifts. "The uniqueness of the mobile market is around the significant amount of impulsive buying," said Nejdawi.

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