Wearable Technology - US - December 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Wearable tech not for everyone
Figure 1: Ownership and intent to purchase, October 2017
Heavy competition from other tech spheres
Figure 2: Sales of laptops, smartphones, tablets, and televisions, 2013-17
Falling sales at specialists place bottom lines in the red
Figure 3: Brands under consideration for wearable tech purchases, October 2017
The opportunities
Upgrades
Figure 4: Historical upgrades and intent to upgrade, October 2017
The gift market
Figure 5: Intent to gift wearable tech, October 2017
Leaving the phone at home
Figure 6: Features sought in tracking devices, October 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Collapse of bands and clips curbs growth in 2017
Poor year ahead, bright decade to follow
Sports drives, sleep lags
Half of tech sales up for grabs
MARKET SIZE AND FORECAST
Decline in basic trackers hampers unit sales
Average selling price rising
Bright decade ahead
Figure 7: US manufacturer shipments of wearable tech, 2011-17
MARKET BREAKDOWN
Fitness dominant
Drones to clip wings of wearable cameras
Price drops combine with improvements in VR/AR
Growth in hearables and smartwatches
Figure 8: US manufacturer shipments of wearable tech, by segment, 2011-17
MARKET PERSPECTIVE
Households spending $2,000 annually on tech hardware
Figure 9: Sales of laptops, smartphones, tablets, and televisions, 2013-17
Competition for gift purchases
Figure 10: Intent to gift technology, wearable products vs personal products, October 2017
MARKET FACTORS 
Sports participation
Figure 11: Sports participation and fitness tracker ownership by sport played, September 2016
Tracking sleep
Figure 12: Sleep self-assessment, by generation, December 2016
KEY PLAYERS – WHAT YOU NEED TO KNOW 
New products stimulating specialists
Apple Watch reigns
Transformative experiences
WHAT’S WORKING?
Halo surrounds smartphone leaders
Figure 13: Top brands under consideration for wearable tech purchases, October 2017
WHAT’S STRUGGLING?
Marquee brands see sales decline
Figure 14: Second tier of brands under consideration for wearable tech purchases, October 2017
Fitbit’s terrible, no good, very bad year
Fitbit turnaround via the Ionic, Flyer
GoPro in turnaround with Hero6, Karma, Fusion
Figure 15: Global sales of Fitbit, GoPro, and Garmin fitness division, 2012-17
WHAT’S NEXT?
AR glasses
NFC
Language translation
Blood glucose monitoring
Figure 16: Interest in tracking blood glucose levels, by race and Hispanic origin, October 2017
Figure 17: Interest in tracking blood glucose levels, by age, October 2017
THE CONSUMER – WHAT YOU NEED TO KNOW 
No more than 52% interested in any category
Smartwatch, Fitbit owners plan to upgrade
Ringing in the holidays with an Apple Watch
Calling is second most-desired feature in trackers
Diverse array of VR experiences sought
OWNERSHIP AND INTEREST
Bands/clips suffer as ownership meets interest
Terminal penetration for fitness bands/clips expected at 39%
Figure 18: Ownership and interest in ownership, October 2017
Young men top mark for personal purchasing of wearables
Figure 19: Number of wearable tech products owned and desired, by gender and age, October 2017
Wishing dad a Happy Father’s Day
Figure 20: Number of products owned and desired, by parental status, October 2017
Hispanics favor wearable tech
Figure 21: Number of products owned and desired, by race and Hispanic origin, October 2017
UPGRADING
Upgrades/replacements are 40% of tracker sales
Figure 22: Historical upgrades and intent to upgrade, October 2017
Former upgraders ready to buy again
Fitbit and Apple owners show brand loyalty with intent to upgrade
Men more active upgraders
Figure 23: Historical upgrades and intent to upgrade, by gender, October 2017
Keeping 18-34s top of mind
Figure 24: Historical upgrades and intent to upgrade fitness trackers, by age, October 2017
Figure 25: Historical upgrades and intent to upgrade smartwatches and wearable cameras, by age, October 2017
GIFTING
One quarter plan to gift wearable in next year
Apple Watch a top wearable gift
Figure 26: Intent to gift wearable tech, October 2017
Hispanics ready to gift
Figure 27: Intent to gift wearable tech, by race/Hispanic origin, October 2017
Figure 28: Sports participation and fitness tracker ownership by sport played, Hispanics vs non-Hispanics, September 2016
Gift marketing to target both sexes
Counting seniors out as gift givers.
Figure 29: Intent to gift wearable tech, by gender and age, October 2017
His and hers
Figure 30: Intent to gift wearable tech, by parental status, October 2017
DESIRED FEATURES IN FITNESS TRACKERS
Lack of cellular potential deal breaker
NFC features need demonstration
Live events bringing contactless payments mainstream
Figure 31: Features sought in tracking devices, October 2017
Three keys to desirability: tracking, calling, and texting
Figure 32: TURF analysis – Features, October 2017
Older ages better fit for trackers, younger for smartwatches
Figure 33: Interest in tracking and communication features, by age, October 2017
Figure 34: Interest in high-tech features, by age, October 2017
Women see fitness, men see tech
Figure 35: Interest in tracking and communication features, by gender, October 2017
Figure 36: Interest in high-tech wearable features, by gender, October 2017
Digital assistants to become de rigueur for name brands
Figure 37: Interest in wearable tech features, by location of residence, October 2017
INTEREST IN VIRTUAL REALITY HEADSETS
Interest in VR headsets high, penetration low
Figure 38: Ownership and interest in ownership of VR headsets, by gender and age, October 2017
Price points a problem for tethered headsets
Figure 39: Ownership and interest in ownership of VR headsets, by household income, October 2017
Millennial Hispanics a top audience for VR
Figure 40: Ownership and interest in ownership of VR headsets, by race and Hispanic origin, October 2017
Kids and their parents
Figure 41: Ownership and interest in ownership of VR headsets, by parental status, October 2017
Last but not least...men aged 18-34
Figure 42: Ownership and interest in ownership of VR headsets, by gender and age, October 2017
INTEREST IN VIRTUAL REALITY ACTIVITIES
Far more than gaming desired
Figure 43: Interest in VR activities, October 2017
Three activities reach 90% of potential users
Figure 44: TURF analysis – Virtual reality activities, October 2017
Women, older adults seek more diverse array of experiences
Figure 45: Interest in VR activities, by gender, October 2017
Figure 46: Interest in VR activities, by age, October 2017
Bringing people from further away together
Figure 47: Interest in VR activities, by location of residence, October 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
TURF methodology
Abbreviations and terms
Abbreviations
Terms