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Wearable Technology - UK - December 2016

“Wearables’ expensive price tags can clash with their nature as ‘nice-to-have’ devices, leading consumers to worry they will stop using the device not long after purchase. Adoption could thus benefit from initiatives that empower current owners to act as advocates for the technology, as well as from longer trial periods, rent-to-buy schemes and love-it-or-give-it-back warranties.”
– Sara Ballaben, Senior Technology Analyst

This report discusses the following key topics:

  • Broadening interest to increase perceived value
  • Wearable technology needs to be a “hands-on” experience
  • Can the workplace be a backdoor to mainstream adoption?
  • Fostering data sharing among wearable owners
  • Moving beyond tracking to coaching

For the purposes of this Report, Mintel has used the following definitions:

The term ‘wearable technology’ (also referred to as ‘wearable devices’ or ‘wearables’) in this Report refers to a category of technology devices that can be worn on the body, either as an accessory or as items of clothing.

Generally, wearable technology can perform some of the same computing tasks as smartphones and have the ability to connect to the Internet, which enables data exchange. In addition, they can provide sensory and scanning features such as biometrics and tracking of physiological functions and allow for real-time access to this information.

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Table of contents

  1. 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

                                                                                                                                                      Wearable Technology - UK - December 2016

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