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Wearable Technology - UK - December 2016

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Over 3 million wrist-worn wearables sold in the UK in 2016
Figure 1: Estimated unit sales of wrist-worn wearable devices, by product category, 2016
Health and fitness tracking remains major driver
Phablets make easily accessible wearables more compelling
Figure 2: Screen size of smartphone owned and future purchase intentions, December 2015
Virtual and augmented reality to expand B2B potential of wearables
Figure 3: Activities interested in using a VR headset for, July 2016
The consumer
Consumers warm up to wearables
Figure 4: Ownership of wearable devices, September 2016
Fitbit leads the UK market
Figure 5: Brand/type of wrist-worn wearable device owned, September 2016
Gifting a key driver for fitness bands
Figure 6: Ways in which consumers got hold of the wrist-worn wearable devices owned, September 2016
Wearables unlikely to gain mainstream appeal in the next 12 months
Figure 7: Proportions of consumers who plan on purchasing wearable devices within the next 12 months, by brand, September 2016
Price is the top driver of decision in wrist-worn wearable purchases
Figure 8: Factors that would most influence the choice of wrist-worn wearable device to buy, September 2016
Health remains the main driver of interest
Figure 9: Most interesting applications of wearable technology, September 2015 and September 2016
Health tracking can effectively encourage data sharing
Figure 10: Companies with which consumers would share their personal information through a wearable device, September 2016
Price and security equal obstacles to adoption
Figure 11: Attitudes towards wearable technology, September 2016
Two in five owners have given up on their wearable device
Figure 12: Attitudes about usage of wearable technology after purchase, September 2016
What we think
ISSUES AND INSIGHTS
Broadening interest to increase perceived value
The facts
The implications
Wearable technology needs to be a “hands-on” experience
The facts
The implications
Can the workplace be a backdoor to mainstream adoption?
The facts
The implications
Fostering data sharing among wearable owners
The facts
The implications
Moving beyond tracking to coaching
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Over 3 million wrist-worn wearables sold in the UK in 2016
A global perspective
Health and fitness tracking remains the major driver
Phablets make easily accessible wearables more compelling
e-SIMs make wearables independent from smartphones
Virtual and augmented reality to expand the B2B potential of wearables
Wearable gaming beyond VR headsets
MARKET SIZE AND SEGMENTATION
Over 3 million wrist-worn wearables sold in the UK in 2016
Figure 13: Estimated unit sales of wrist-worn wearable devices, by product category, 2016
The emphasis on health is a mixed blessing
The smartwatch segment is gaining ground
e-SIMs should support sales in this category
A global perspective
Figure 14: Forecast volume sales of wearable devices worldwide, 2015-17
Smartwatches will lead global growth in 2017
Figure 15: Forecast breakdown of volume sales of wearable devices worldwide, by category, 2015-17
MARKET DRIVERS
Health and fitness tracking remains major driver…
…and tech-enabled healthcare is now mainstream
Phablets make easily accessible wearables more compelling
Figure 16: Screen size of smartphone owned and future purchase intentions, December 2015
e-SIMs make wearables independent from smartphones
Virtual and augmented reality to expand B2B potential of wearables
Figure 17: Activities interested in using a VR headset for, July 2016
Wearable gaming gets a boost
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Introducing connected health ecosystems
Samsung enters the hearables space
Wearables get social
Smart coaching through wearables
Smart clothing hits the high street
Google’s Project Soli could revolutionise interaction with wearables
Fitbit and Apple monopolise above-the-line adspace
LAUNCH ACTIVITY AND INNOVATION
Introducing connected health ecosystems
Figure 18: Under Armour’s Health box, November 2016
Figure 19: Philips’ HealthSuite, November 2016
Samsung enters the hearables space
Figure 20: Samsung’s IconX in black, November 2016
Wearables get social
Figure 21: Snap’s Spectacles, November 2016
Smart coaching through wearables
Smart clothing hits the high street
Figure 22: Commuter Jacket designed by Google and Levi's, November 2016
Google’s Project Soli could revolutionise interaction with wearables
ADVERTISING AND MARKETING ACTIVITY
Fitbit and Apple monopolise above-the-line adspace
Figure 23: Recorded above-the-line, online display and direct mail advertising expenditure on smartwatches and fitness trackers, by selected leading manufacturers and retailers, December 2015-November 2016
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Consumers warm up to wearables
Gifting a key driver for fitness bands
Wearables unlikely to gain mainstream appeal in the next 12 months
Price is the top driver of decision in wrist-worn wearable purchases
Health remains the main driver of interest
Health tracking can effectively encourage data sharing
Price and security equal obstacles to adoption
Disengagement is more of a worry than a reality
OWNERSHIP AND ACQUISITION
Consumers warm up to wearables
Figure 24: Ownership of wearable devices, September 2016
Young men the keenest on wearables
Fitbit leads the UK market
Figure 25: Brand/type of wrist-worn wearable device owned, September 2016
Gifting a key driver for fitness bands
Figure 26: Ways in which consumers got hold of the wrist-worn wearable devices owned, September 2016
Watches are popular in the workplace
PURCHASE PLANS
Wearables unlikely to gain mainstream appeal in the next 12 months
Figure 27: Proportions of consumers who plan on purchasing wearable devices within the next 12 months, by brand, September 2016
Smartwatches will pose a growing threat to fitness bands
Early adopters continue to drive the market
Figure 28: Repertoire of wearable devices that consumers currently own and plan to buy, September 2016
CHOICE FACTORS
Price is the top driver of decision in wrist-worn wearable purchases
Figure 29: Factors that would most influence the choice of wrist-worn wearable device to buy, September 2016
Non-owners are most worried about the cost of entry
Smartwatches have a more complete proposition
Figure 30: Factor that would most influence (ie ranked first) the choice of wrist-worn wearable device to buy, by wearable devices owned, September 2016
Consumers are not ready to compromise on functionality and style
Continued activity in the hybrid watch sector
WEARABLE APPLICATIONS
Health remains the main driver of interest
Figure 31: Most interesting applications of wearable technology, September 2015 and September 2016
The health angle is key to driving interest outside the early adopters…
…but there is a risk of creating too narrow a focus
Depolarising interest to increase willingness to pay
Figure 32: Repertoire of most interesting applications of wearable technology, September 2016
Connected homes and mobile payments will broaden appeal
Wearables can help make sense of POS mobile payments…
…and the range of options is expanding
Non-health features can help convert interest into action
Figure 33: Most interesting applications of wearable technology, by ownership and plans to buy wearable devices, September 2016
DATA SHARING
Consumers are very careful about sharing their data
Figure 34: Repertoire of companies with which consumers would share their personal information through a wearable device, September 2016
Health tracking can effectively encourage data sharing
Figure 35: Companies with which consumers would share their personal information through a wearable device, September 2016
Health concerns span the generations
Financial institutions hold potential
A positive outlook ahead
Figure 36: Companies with which consumers would share their personal information through a wearable device, by ownership and plans to buy wearable devices, September 2016
ATTITUDES TOWARDS WEARABLE TECHNOLOGY
Price and security equal obstacles to adoption
Figure 37: Attitudes towards wearable technology, September 2016
Overcoming the price barrier
Strong interest in try-before-you-buy initiatives
Disengagement is more of a worry than a reality…
Figure 38: Attitudes about usage of wearable technology after purchase, September 2016
…but the number of abandoned devices is still a real issue
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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