Table of Contents
Executive Summary
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- The market
- Smart wristbands grow while smartwatches drop
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- Figure 1: Volume sales of smart wristbands and smartwatches in China, 2015 - 2016
- Low-priced wristbands drive growth, while smartwatch market lacks breakthrough products
- Companies and brands
- Xiaomi and Apple dominate, and Huawei and Samsung offer both wristbands and watches
- Low-priced VR headsets attract trial while high-end devices better educate consumers
- Innovation highlights
- The consumer
- Who owns wearable devices?
- Who intends to buy wearable devices?
- Xiaomi and Apple take the lead across tier one, two and three cities
- Leading brands’ wearables and smartphones users show similar age and gender profile yet different income and city tier profile
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- Figure 2: Brand penetration of smart wristband and smartwatch, September 2016
- Functions and price are major barriers for wearable devices
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- Figure 3: Purchase barriers for different wearable devices, September 2016
- Health function is major appeal, especially family monitoring features
- Consumers of different ages show different level of interest in product features
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- Figure 4: Attractive product features, September 2016
- High interest in various applications of VR
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- Figure 5: Interest in VR application, September 2016
- Consumers prefer technology brands over sports brands
- Buying for themselves, rather than for gifting
- Rental services appeal to 20-24-year-olds
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- Figure 6: Attitudes towards wearable devices, September 2016
- Virtual trial does not necessarily lead to purchase
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- Figure 7: Attitudes towards VR technology, September 2016
- What we think
Issues and Insights
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- What do consumers look for in wearable devices?
- The facts
- The implications
- Overcoming the purchase barrier of smart wristbands and smartwatches
- The facts
- The implications
- VR’s current role is still more in brand marketing and experience
- The facts
- The implications
The Market – What You Need to Know
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- Smart wristbands grow while smartwatch growth drops
- Low-priced smart wristbands drive volume growth
- Lack of breakthrough products and high price drags on smartwatch market
Market Size and Segmentation
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- Smart wristbands grow while smartwatches drop
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- Figure 8: Estimated unit sales of smart wristbands and smartwatches in China, 2015-2016
- Value growth hindered by drop in smartwatches and lower wristband price
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- Figure 9: Estimated value sales of smart wristbands and smartwatches in China, 2015-2016
- Smart wristbands taking up greater share in both volume and value
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- Figure 10: Volume and value share of smart wristbands and smartwatches in China, 2015-2016
Market Factors
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- Low-priced smart wristbands drive volume growth
- Lack of breakthrough products and high price drags on smartwatch market
- Replaceable functions are potential growth barrier
Companies and Brands – What You Need to Know
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- Xiaomi leads due to affordability
- Apple tops smartwatch market with challenges ahead
- Huawei and Samsung benefit from a balanced product portfolio
- VR and AR hardware is still in early stage of commercialisation
- Innovation highlights
Key Players
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- Smart wristbands and smartwatches
- Xiaomi leads in smart wristband due to low-priced products
- Apple leads the smartwatch market but faces challenges
- Huawei and Samsung benefit from comprehensive product lines
- Lifesense and Genius emerging in the market
- VR/AR technology
- Low-priced headsets attract trial while high-end devices can better educate consumers
- Key players in VR/AR hardware market – HTC, Oculus and more
- VR experience stores
- No leaders yet in VR content providers
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- Figure 11: Examples of companies offering VR content, 2016
Who’s Innovating?
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- More types of wearable technology
- Wearable devices for more people
- More applications of VR/AR technology
The Consumer – What You Need to Know
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- Wearable device owners tend to be younger, and there is opportunity in tier two and three cities
- Entry-level products are important to building trial
- Xiaomi and Apple take the lead
- Functions and price are major barriers for wearable devices
- Health monitoring feature is major appeal, especially family functions
- Consumers of different ages show varied interest in product features
- High interest in various applications of VR
- Consumers prefer technology brands, and they are more likely to buy wearable devices for themselves
- Virtual trial does not necessarily lead to purchase
Ownership and Purchase Intention
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- Who are the owners of wearable devices?
- No significant gender difference among owners of wearable devices
- Young consumers are more likely to own wearable devices
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- Figure 12: Owners of wearable devices, by age and gender, September 2016
- Opportunity in tier two and three markets
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- Figure 13: Owners of wearable devices, by city tier and monthly household income, September 2016
- Who intend to buy wearable devices?
- More females intend to buy smart wristbands
- Entry-level products are important to building trial
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- Figure 14: Purchase intention of different wearable devices, by gender and age, September 2016
Brand Penetration
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- Xiaomi and Apple lead in smart wristbands and smartwatches respectively
- Not all consumers can differentiate smart wristbands and watches
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- Figure 15: Brand penetration of smart wristband and smartwatch, September 2016
- Age and gender profile of leading brands is similar to smartphones
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- Figure 16: Users of leading smart wristband and smartwatch brands, by age and gender, September 2016
- Apple appeals to a wider income group and Huawei is more popular in lower tier cities, when compared with the smartphone market
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- Figure 17: Users of leading smart wristband and smartwatch brands, by city tier and monthly household income, September 2016
Purchase Barriers
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- Wearable devices should not be seen as a small version of smartphones
- Price is important for smartwatches, smart jewellery and smart clothing
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- Figure 18: Purchase barriers of different wearable devices, September 2016
- Functions, price and appearance are major purchase barriers for smart wristbands among young consumers
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- Figure 19: Purchase barriers of smart wristbands, by demographics, September 2016
- Among males and those in their 20s, function is a major purchase barrier for smartwatches
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- Figure 20: Purchase barriers of smartwatches, by demographics, September 2016
Attractive Product Features
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- Health monitoring is still the most needed function
- Consumers are interested in connecting wearables to other devices
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- Figure 21: Attractive product features, September 2016
- To appeal to consumers of different age groups…
- Current smart wristband and smartwatch owners seek improvements
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- Figure 22: Attractive product features, by ownership and purchase intention of smart wristband and smartwatch, September 2016
Interest in VR Applications
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- High interest in various applications of VR
- What are the most appealing VR applications?
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- Figure 23: Interest in VR application, September 2016
- Males and females show different areas of interest
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- Figure 24: Interest in VR application, % of very interested and somewhat interested, by gender, September 2016
- Parents are interested in children’s entertainment and learning with VR
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- Figure 25: Interest in VR application, % of very interested and somewhat interested, by household with and without children, September 2016
Attitudes towards Wearable Technology
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- Consumers prefer technology brands over sports brands
- Buying for themselves, rather than for gifting
- Buying for functions instead of following latest trends
- Affordable products, rather than rental services
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- Figure 26: Attitudes towards wearable devices, September 2016
- Males and those with high MHI would buy wearables for themselves
- Offering detailed information for gifting options
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- Figure 27: Attitudes towards wearable device purchase, by gender and MHI, September 2016
- Young consumers are more likely to be attracted by rental services
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- Figure 28: Attitudes towards wearable device renting, by age, September 2016
- Virtual trial does not necessarily lead to purchase
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- Figure 29: Attitudes towards VR technology, September 2016
Meet the Mintropolitans
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- Mintropolitans are more interested in family monitoring and exercise tracking features
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- Figure 30: Attractive product features, by consumer classification, September 2016
- What VR applications are Mintropolitans interested in?
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- Figure 31: Interest in VR application, by consumer classification, September 2016
Appendix
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- Methodology
- Abbreviations
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