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Bring down prices of wearable devices

Posted: 01 Sep 2014     Print Version  Bookmark and Share

Keywords:wearables  body electronics  smart watches 

Prices of wearables need to get lower if manufacturers and technology companies want these devices to succeed in Asian countries like China and India, an analyst said.

Charles Anderson, head of telecoms and mobility at IDC Asia/Pacific, said that in targeting the masses, companies should consider looking for ways to bring the prices of their products to levels that people can afford.

"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, noting that devices should strike a balance between good quality and low prices for the wearable market to "really take off."

Charles Anderson

Anderson: Price point has to come down.

Given the positive outlook of research firms about the future of the wearables market—forecasting millions of shipments for the devices and its components not only in 2014 but also in the years to come—industry players must act accordingly to make wearable devices affordable if they want to take advantage of this growth.

IHS published a whitepaper last year predicting that microelectromechanical systems (MEMS)—a key component in wearable consumer devices such as fitness trackers, smart glasses, and smart watches—will have a shipment of more than 40 million units this year. By 2015, this 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.

In addition to the upbeat predictions, Asians also show strong interest in the emerging wearable devices.

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 also 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 [just] 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."

Anderson supported the idea. He said that for wearables, such as smart watches, to accelerate, companies must invest in putting more functions or applications to these devices. This way, people will have more reasons to buy and use the product.

"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.

Dominant consumer-oriented companies like Google, Samsung, and Apple will have to consider these factors when designing and selling their wearable products as they have great influence over the market.


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