The Wearables Battle

It's been seven years that we are seeing Apple Watch getting much attention, and it is very similar to what iPhone contacts in the smartphones category.

Also, a couple of years ago, Google bought Fitbit in 2019, and since then, I have been tracking this segment.

Every major tech giant wants to capture the wearables segment, be it Google, Apple, Amazon, Xiaomi, and the list goes on.

Let's understand what and why with some numbers :)

How big is the market?

According to Gartner, the wearables market is $82 Billion in 2021, and it will grow at a healthy 12-15% CAGR for the next 4-5 years.

If you compare this with the smartphone market, which is $500 Billion globally, the wearables segment has enormous growth scope.

Now you know why companies want a share of this piece :)

How are companies faring?

If we see the numbers, then?Apple seems to have a commanding lead.

• Apple generates ~10%+ of overall Revenue (this share was ~6% in 2018) from the wearable segment (Watch, pods etc.), but Watch contributes to ~50% of the entire wearable piece. It is the fastest-growing segment for them.
• iPhone has an installed base of 1000 mn+ devices. (Next is Samsung which has 750 mn+ devices.) but Apple could sell ~30mn watches last year compared to Fitbit of ~10mn. A huge market is available. And more iPhone they sell, more customers for other products hence prices are lowered.
• Apple has introduced FDA approved ECG test. That means they will try to introduce more features related to health going forward.
• The truth is, the FEAR of HEALTH SELLS more than anything else.

So now that Apple knows that your heartbeat is irregular and you are buying regular medicine for cholesterol or paying liquor bills via Apple card, can you imagine the value of that information. IMMENSE, which google doesn't have at this point.

So now you have the second reason - DATA. And that's what the companies want to refine their search offerings/recommendations to the end customers.

Exactly the scenario with the ear-worn devices (Airpods, Headphones)

Apple launched $549 AirPods Max last year; were they crazy? No.

• Global earphones and headphones market is somewhere around $30-35 Bn.
• AirPod (earphones) sales are somewhere around $10-12Bn, and users are in the range of 75-80 Mn.
• Apple also owns Beats which brings another $1.5-2 Bn in Revenue.

So technically, Apple owns roughly 30% of the market.

Even we consider that there is a latent demand for this product which is around 5-6% of users who will upgrade from AirPods to Max, which will bring in Revenue of $2 Bn (this is small compared to overall Apple's Revenue)

Then why launch?

• Be ready for AR/VR when immersive technology becomes ubiquitous.
• Cater to all (Apple now have ear-worn devices starting from $99 and goes up to $549 - the entire lineup is ready)

:) :)

What do you think now?

And, finally

Okay, so I always have this question up for discussion.

Wearables are meant for whom?

I mean, it is used by everyone, but initially, in my opinion, it was designed for Men.

We had fitness trackers before the watches gained traction, but fitness trackers were more like a utility and not the overall package. That's what I am saying, and the entire package was built as an accessory for Men.

Why do I think so?

Because all this while apart from swiss watches and aviators, men could use practically nothing as a fashion statement. (perfumes yes, pens yes, but to the minimal extent, I feel)

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