Can Wearable Devices Succeed In Fashion?

According to the world clothing and shoe net, chip maker Intel (Intel) has been trying to please for years.

In order to promote wearable technology to become a real phenomenon in a wider range.

But in July 2017, there were reports that Intel, which used to use chips in smart devices from Tag Heuer to MICA smart Bracelet in Opening Ceremony, is currently working on its generalized wearable technology.

The wearable fitness equipment department, which produced the only bright spot, will lay off staff.

According to a recent report from CNBC, New Technology Group, Intel, is responsible for the development of forward-looking products and concepts, and now focuses on Augmented Reality.

Intel declined to comment, but the company's insider informed BoF about the layoff plan.

The strategic pformation of Intel reflects that the wearable technology industry is facing a bigger crisis as a whole, largely because it fails to develop products that really make consumers feel attractive.

Jawbone, an early pioneer in this field, raised $more than 900 million in the past 20 years, valued at 3 billion 200 million in 2014, and began to go bankrupt in June this year. Fitbit raised $730 million and worth more than 4 billion dollars when it was publicly listed in June 2015. In February this year, it bought 23 million of the smart watches Pebble, and its value dropped to the current 1 billion 300 million US dollars.

Research firm Strategy Analytics data showed that Fitbit's global wearable device market share dropped to 16% in the second quarter of 2017, down from 29% in the same period in 2016, while Fitbit sold 3 million 700 thousand smart items in the same quarter.

Less than 5 million 700 thousand in the second quarter of 2016, revenues amounted to $353 million, down 40% from 586 million in the same period last year.

As of the current quarter, the loss reached $63 million, compared with a profit of slightly less than US $10 million in the same period last year.

To be sure, the challenges faced by Fitbit are related to the fiercer competition brought about by Apple Watch, which is commonly used as a fitness tracking device, and by Chinese competitors, millet and similar products.

Market demand for Fitbit products is not high.

The current situation is quite different from that in 2013. The Credit Suisse reported at that time that the wearable technology market had gone to the "inflection point" and would have a "significant and universal impact" on the economy. The value of the wearable technology reached 300 to 50 billion dollars in 2013 around three to five years ago.

In the past year, fashion has already taken the train, causing the so-called "wearable season" trend.

In September 2012, Diane Von Furstenberg's T platform came with Google's (Google) networking glasses. At the end of the day, designers and Google Google co founder Sergei Brin shared the curtain call (Sergey Brin); in 2014, Tory Burch and Fitbit collaborated in designing accessories to design a fashionable strap that could be embedded in the products; in the same year, the Samsung smart watches were unveiled at the fashion show; as of 2015, the company had launched its own wearable device for the first time; in 2016, the American fashion giant launched a smart T-shirt called "smart" T-shirt to monitor the wearers' heart rate, breathing and movement.

But the fashion industry's wearable technology alliance is at least not convincing.

Although most of the equipment is far behind, some devices continue to be manufactured and sold in the market.

Google Glasses Google Glasses has been eliminated by the market in 2014; the accessories of Tory Burch can still be sold at several retailers, but Minkoff's products are nowhere to be found. Glasses

Opening Ceremony is also the same as the MICA Bracelet designed by Intel, which doesn't look like a serious product at all.

Apple Watch is by far the most successful - or the most failed - wearable product, which depends on who you are asking: first, Apple Watch, which is selling technology and fashion accessories for gimmick, because several aesthetic and advanced choices have been made on the case and strap, and even a successful product has been jointly designed with Herm s.

But with the increase of the market share of Apple Corp (Apple), most consumers do not buy this product for aesthetic purpose, but are practical functions such as tracking, notification and timing of fitness indicators.

Apple watch business is growing.

Strategy Analytics said that Apple Corp sold 2 million 800 thousand devices in the second quarter of 2017, which accounted for 13% of the global wearable device market. In the second quarter of 2016, only 1 million 800 thousand shipments were sold, accounting for 9%. Although the number of delivery equipment did not represent the actual sales volume, it only indicated that the number of companies sending equipment to the store (Apple Corp did not disclose the number of sales of Apple Watch), CEO Cook Tim said in early August that sales of the device had increased 50% over the past year.

In the latest fiscal season, Apple's "other products" category (including Apple Watch, Apple TV, Beats electronics, iPod and accessories) created a sales of US $2 billion 740 million, an increase of 23% compared with the same period in 2016.

It is rumored that Apple's next generation rumours include support for LTE, meaning that users do not need to bind it to a nearby iPhone to make phone calls or use other connection services.

For some people, this will make Apple Watch more useful and accessible to a computer rather than a wrist watch.

But this will not make Apple Watch more fashionable.

But can wearable devices really succeed in fashion? Many people think that functionality is the top priority.

Without technology support, a nice ring, necklace or bracelet can only be a piece of jewelry.

Apple's design concept of simplicity and pragmatism has spread all over the world, but its fundamental function is to create real loyalty for users.

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Overall, the biggest challenge facing wearable devices is product retention.

"Over time, the use of these products has dropped dramatically," said SoftTech VC, a venture capital fund of California Palo Alto, an early FitTech investor. Stephanie Palmeri, a partner of the company, said, "these products need to be recharged, and then you have to remember to install watches, rings or bracelets."

According to a report by Gartner in 2016, the use rate of smart watches was 29%, while the fitness data tracker was 30%.

The survey conducted online interviews with 9592 respondents in Australia, the United States and the United Kingdom.

"About 35% of people buy tracker devices for 6 months or so," said Weston Henderek, head of Internet intelligence at NPD group. "This is a very high proportion."

Such a high rate of abandonment is partly due to the fact that equipment needs to be upgraded constantly (for example, when the first generation of Apple Watch is bought, the second generation will be bought).

Wearing the wearable device as a gift to others will also face a higher rate of abandoning.

"We all know that if this type of product is sent to you by others, you are unlikely to stick to it," Henderek said. "If you want to use it as part of the exercise plan, you will be more willing to stick to it.

This is much better than your mom's Christmas and you say, 'dear, it's time to shape up', and then send you a tracking device.

Such a gift might make you angry. "

Unfortunately, the data generated by these products are not too addictive, nor will they create high user interaction rates.

"If you just build up technology, it doesn't mean people are willing to pay," said Charlie O 'Donnell, partner of Brooklyn Bridge Ventures, which invested in Ringly, an intelligent jewellery brand.

There must be some consumers who are obsessed with collecting and monitoring their personal data, whether walking or sleeping.

But most people are bored with this simple counting measurement very quickly.

"Many of these things didn't really know how to really integrate into people's daily life when they were designed," O Donnell added.

Once you reach your weight target, you are not so active.

In addition to activity tracking, other wearable smart clubs also include notifications. For example, when you have new messages on Slack, your Apple Watch will react, and your partner's Ringly bracelet will vibrate when you call.

But most of the time, these products are just bulky.

"A few years ago, when Google first launched Android Wear, it was still promising, but there were also many difficulties. Google solved the problem very slowly," Henderek said. "Therefore, you can see that many suppliers have withdrawn from the market and have not actively launched new equipment or functions as much as possible."

Google's updated version, Android Wear 2.0, started shipping earlier this year, but it had gone through months of delays, and it must have missed the holiday season that could be shipped.

Henderek added: "I think part of the reason is the delay of Google, which hinders the development of their ecosystem. By comparison, Apple launched Apple Watch and developed the operating system specially for the device.

But even though Google may be technically challenged, they are more successful than apple.

In some ways, Android Wear has done: "on Android Wear 2, we can really concentrate on doing these things: see what people do before using Android Wear watches, how to do it better and faster than before," said David Singleton, vice president of Google engineering and Android Wear, who regards health data tracking, interconnection and self expression as the top three consumers using smart watches.

"We listened carefully to feedback from our partners, which could help them better present products to users.

There is also a bonus point: wearing a Android watch does not require you to buy a Android phone, but Apple's Apple Watch needs to be tied to the iPhone system.

"Before you get out of Android Wear 2.0, if you use iPhone, you really can't implement the same function as you use Android phones," Singleton said. "On products, we are always committed to bridging the differences between iPhone and Android mobile users. This is definitely an obstacle we are trying to overcome.

"

To be precise, if there is any opportunity for a wearable device market to achieve large-scale success, there must be more and more attractive functional usage.

"The future is not going to be a smart shoe leading the whole market," Parkes said. "We are not looking for iPhone in the wearable world.

As you can see, there is no fashion brand that is suitable for every age group and user group.

What other functions besides active data tracking and notification push?

According to the report issued by Market Research Future in 2016, the wearable device market, which is dominated by medical function in the world (such as monitoring blood sugar level of diabetics), is expected to grow at a CAGR of 27% over the next 10 years.

Fashion is also important for any product worn on the human body.

The reason why smart watches do not really destroy Swiss watches industry also imply that the field of wearable devices still faces significant challenges in aesthetics.

In fact, although the Swiss watch industry is facing financial difficulties (online penetration is not high and the Chinese government is attacking the gift atmosphere), it coincides with the rise of smart watches, but the sales difficulties of smart watches actually come from consumers who are not accustomed to wearing watches.

If Apple really wants to grab the market share of the watch industry, it must make an aesthetic beyond imagination to convey its personal style and social status.

Many people would think that no one has done this -- apple, Fitbit or other wearable devices.

The success rate of wearable devices emphasizing aesthetics is not very optimistic.

Lenovo (Lenovo Moto) shelved its smart watches at the end of last year; Apple stopped selling 18 KK versions of Apple Watch priced at 10000 to 17000 dollars; the second generation version was made of ceramic as watchcase, with a maximum price of $1300. Moto

From Cuff to Pebble in San Francisco, the focus of wearable device start-ups has shifted from fashion jewelry to conventional styles.

Others believe that Apple has successfully solved these challenges.

"Apple has been very aware of the importance of fashion and luxury for wrist wear since its first day," said Neil Cybart, apple analyst and founder of Above Avalon. "You can say so, the strap is the most important element of Apple Watch, because there is no comfortable and fashionable watch strap, no one will wear this device all day."

But many investors still fail to find the wearable devices that are both fascinating in form and function.

Burch Creative Capital deputy manager Sam Kaplan said: "we also take a biased view of fashion in investment, but we still can not determine the positioning of wearable technology in the fashion spectrum."

So far, the New York based investment company, led by Christopher Burch, a fashion entrepreneur, has no longer considered investing in wearable devices.

"The biggest challenge is that design may limit the market potential of a product," Palmeri said. "These products must be able to enter a large enough market to appreciate this style and to wear or wear every day."

"Apple Watch is useful for many people, but it is not attractive to me in terms of aesthetics. I don't need to have such a complicated function," says Dr. Amanda Parkes, chief Innovation Officer of Fashion Tech Labs, a fashion science and technology expert and Miroslava Duma supported investment fund. "Choose to be more diversified."

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In the final analysis, products that really combine fashion styles and functions are most likely to succeed.

Some progress in the field of health is more interesting. For example, Safilo Group SpA, which makes glasses for Dior, Fendi and other luxury brands, is working on combining brain wave detection technology from Toronto Interaxon company to create glasses products to measure wearers' brain waves so as to make sure that they focus on meditation training.

And Ringly.

"In my ideal world, people spend less time on mobile phone notices," said Christina d 'Avignon, co-founder and chief executive of the brand.

I want to reduce the time people are staring at the screen.

The company's focus also includes making products smaller, aiming at minimizing the technical components of their devices as much as possible, reducing the limitations imposed by the shape itself.

Although D 'Avignon declined to disclose revenue, she said Ringly has been growing since June 2014 when it first launched its products.

The function of wearable devices is not only more concentrated, but also more and more free in form.

The form of wearable devices is no longer confined to bracelets or watches, which brings new opportunities for fashion designers and accessories designers.

Parkes is particularly interested in smart fabrics, or will have an impact on the B2B field. It will go far beyond the first generation of products such as Google Project (Jacquard). Google and Levi s will use this jacquard design cowboy jacket to shop in the autumn.

"At present, we think that wearable devices are" active "and need to be recharged," Parkes said. "Clothes are passive. There is no need for maintenance.

But when the boundaries are blurred, for example, the fabric is woven into the optical fiber battery, and then the optical fiber circuit is built on its own.

This is a form of wearable devices playing an important role in the Internet of things. "

Many existing wearable devices, especially hybrid watches loaded with Google Android and other operating systems, can also play a role in this regard.

"I think the life span of hybrid watches will be very long," said Benedict Evans, partner of Andreessen Horowitz. Silicon Valley venture capital has invested in Jawbone and Fitbit: "it can be used in the next 30 years."

Many brands will also gamble in this field.

This autumn, all the new men's watches on the shelves of all Michael Kors stores will contain intelligent functions to some extent.

(Evans and Parkes also saw opportunities in "ears", such as Evans's first iteration product of AirPods wireless headphones released by consumers in 2017.

)

Of course, there is still a big business opportunity in the market, but some people still hesitate: glasses.

Although Google's Google Glass has not been successful in business, "the technology behind it is absolutely amazing," Park Glass said. "In addition to problems in marketing, early users are not fashion or style opinion leaders, and there will definitely be a rebound in the future."

Snapchat's Snapchat Spectacles, which could soon be sold out, won early success, suggesting that consumers are ready to experiment.

Now, Google and apple are reported to be developing commercial glasses.

But for now, the wearable device market will continue its current calm period.

What role the fashion will play in the next wave will largely depend on the extent to which the industry is willing to participate in the research and development phase.

"If we had" hype cycle "and" disappointment trough "as Gao Dena said, we are there now," Evans said. "We are looking for real new phenomena."

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