Michael Kors announced its entry into the wearables market at Baselworld 2016 Thursday. The Michael Kors Access smartwatch will start at $395 and is geared to the fashion-focused consumer, said company CEO John Idol. Designer Michael Kors said in a statement: “Why can’t tech accessories be chic and glamorous? You wear them every day.” Technology “should reflect your personal taste as much as anything else, but it should also give you access to all the experiences that you want,” Kors said. The Android Wear-powered watch is due in stores this fall, said the company. Features include interchangeable leather and silicone wristbands, social media updates and text and email alerts, app notifications, “smart help” from Google, fitness tracking and voice activation, said the company.
Global shipments of wearable devices are expected to grow 38.2 percent this year to 110 million units, IDC said in a Thursday report. The research firm sees an expanding lineup of vendors combining with “fast-growing consumer awareness and demand” to push double-digit growth through 2020, when annual shipments will reach 237.1 million units, it said. “Although smartwatches like the Apple Watch or Android Wear devices capture the spotlight, they will only account for a quarter of all wearables in 2016 and will grow to about a third by 2020," IDC said. "It's time to start thinking about smarter watches -- traditional watches with some sort of fitness or sleep tracking but are unable to run apps -- built by classic watch makers. These devices have the potential of making the technology invisible while still integrating themselves within day-to-day activities.”
Futuresource Consulting estimates 99 million wearable devices were sold globally last year “across all categories,” up 76 percent from 2014, the firm said in a Wednesday report. Sales increased 267 percent to $24 billion, reflecting average selling price increases spurred by momentum in the connected watch category, it said. In the smartwatch segment, Apple “quickly established itself as outright market leader despite being late to market compared to some of the other major brands,” it said. Smartwatches overtook activity trackers as the largest product segment in revenue terms from the previous year, Futuresource said. Q4 was also the first quarter in which smartwatch shipments overtook those of traditional Swiss watches, it said. “Classic high end brands such as Tag Heuer and Breitling and mass consumer watch brands such as Fossil and Guess have already started to introduce connectivity and smart features to their watches in order to embrace changing customer needs and market competition.” Futuresource sees smartwatches as getting “smarter and more capable,” but not at the expense of cannibalizing smartphones, it said. “Other issues like battery life are also improving for smartwatches.”
The classification for the Microsoft Band is based upon the device's ability to connect to a smartphone, ruled Customs and Border Protection, so the band gets duty-free treatment when imported from most countries. Its ability to connect to a user's smartphone over Bluetooth is the essential character for classification purposes, the agency said Jan. 19 in a ruling it recently released. CBP previously made similar rulings on the Apple Watch and on a Samsung smartwatch. When connected to a smartphone, the Microsoft Band can display phone call information, news, weather, heart rate, pedometer measurements and other things, said CBP. When not paired, the wrist band lacks the ability to show much of that information, it said. Although the device allows "some basic sound reproducing functions," and other functions, "the Microsoft Band is primarily designed to display, manipulate, and store data via the use of various applications utilized by a Bluetooth-connected mobile telephone," said CBP. The band is made up of component articles and should be classified based on the component that provides for the essential character, CBP said. "Although each of the Microsoft Band’s component articles (e.g., the microphone, speaker, AMOLED display, heart rate monitor, accelerometer, and gyro sensor) enable important functionality in the operation of the Microsoft Band, it is the Bluetooth transceiver that is indispensable to the core, essential condition of the Microsoft Band, because the radio transceiver facilitates the display, manipulation, and storage of data between the Microsoft Band and paired external devices." Based on the role of each of the component articles "in relation to the use of the merchandise, CBP concluded the Band's essential character is imparted by the Bluetooth transceiver. The band is best classified as a radio transceiver in subheading 8517.62.00, which provides for, 'Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus,'” said CBP.
Just 35 percent of respondents in a recent ABI Research study are considering buying a smartwatch in the next 12 months, said ABI Monday. More than 80 percent of those not interested said their primary reason for not buying a smartwatch is that they believe their smartphones can adequately address all the necessary functions a smartwatch can provide, said NPD. Most consumers have the impression a smartwatch “is a smartphone accessory rather than an independent device," said analyst David McQueen. But McQueen said consumers could warm to smartwatches if manufacturers strategically brand them separately from a smartphone. Pricing is critical, said McQueen. Only a quarter of respondents who expressed interest in buying a smartwatch said they would pay more than $300 for one, NPD said. The average selling price of a smartwatch last year was $316. Fashion is also a major consideration. Survey responses indicate “a fashionable appearance” ranks higher than voice or audio capabilities for consumers. "Although respondents perceive voice functionality as less important, voice interaction will help fit more features in a smaller, fashionable package," said analyst Sam Rosen. Also, popular consumer smartwatch features -- message and phone call alerts -- are trickling down to basic, lower cost fitness bands and traditional watches, “further reducing the value to undecided users," said Rosen.
Global smartwatch shipments reached 8.1 million units in 2015's holiday quarter, compared with 7.9 million shipments of traditional Swiss watches, Strategy Analytics said in a report. It was the first time that smartwatches outshipped Swiss watches on a global basis, said the research firm. Smartwatch shipments jumped 315 percent in Q4 compared with a 4.8 percent decline in traditional Swiss watches, it said. Smartwatch sales are growing rapidly in North America, Western Europe and Asia, it said. “Apple Watch captured an impressive 63 percent share of the global smartwatch market in Q4 2015, followed by Samsung with 16 percent.” Apple and Samsung together account for a “commanding” 80 percent share of all smartwatches shipped worldwide, it said. “The Swiss watch industry has been very slow to react to the development of smartwatches. The Swiss watch industry has been sticking its head in the sand and hoping smartwatches will go away.”
The International Trade Commission opened a Tariff Act Section 337 investigation (No. 337-TA-981) into claims by Saxon Glass that imports of an Apple Watch model are infringing its trademark, the commission said in a Monday announcement. Saxon's Nov. 10 petition alleged the Apple Watch Sport’s ION-X strengthened glass infringes Saxon’s own IONEX mark. Saxon is requesting a limited exclusion order and cease and desist order banning import and sale of the Apple Watch Sport. Apple representatives didn’t comment Wednesday.
The smartwatch is a “category waiting for a market,” said Juniper Research analyst James Moar in a research report Tuesday. While numerous smartwatch vendors have produced a variety of watches -- creating a market with customization and price segmentation -- there have been “no great leaps forward that have revolutionised the category,” said Moar. Recently launched devices have added aesthetic appeal with “more polished looks” and subtle changes in functionality, but there has been no major change in device capabilities or usage, Moar said. “With smartwatch functions established, it is now up to consumers to decide if they want them, rather than technology companies providing more reasons.” Apple Watch had 52 percent of global smartwatch shipments last year, despite launching in early Q2, said Juniper. Android Wear shipments were under 10 percent for the year, and Samsung’s Tizen-based Gear S2 hasn't achieved strong sales since its November launch “despite being well received,” said the researcher. Most other smartwatch sales are from “cheaper, simpler” devices from smaller players, such as Martian, X and Razer, with its recently announced Nabu Watch, it said. Apple Watch aside, the market has been driven by lower-priced devices, including the Breitling B55 Connected and the Martian Guess Connected, which typically provide basic notification and tracking functions without an app-capable operating system on the device itself, it said. But Juniper said the smartwatch ecosystem is “growing rapidly,” with dedicated software companies emerging to develop games and productivity apps. Finance deals with retailers will be a key part in bringing prices down and making smartwatches more visible to general consumers, it said.
One in 10 U.S. broadband households plans to buy a smartwatch by mid-2016, a Parks Associates report released Tuesday said. Smartwatch adoption in broadband households grew from 4 percent at the start of 2014 to 7 percent currently, Parks said. "Unique form factors" will help spur sales this holiday season, analyst Harry Wang said, saying smartwatches are especially popular in broadband households with children due to family-oriented use cases. Smartwatches also have “significant health applications,” Wang said. Wearables will be the subject of a Parks Connections Summit at CES Jan. 6, 10:30-11:45 a.m., in the Venetian Hotel, level 4, Marcello 4501.
Fossil launched its first smartwatch Tuesday in time for the holiday season. Powered by Android Wear, the Q Founder tracks activity, connects to apps, alerts users of notifications and features customizable digital watch faces, the company said. Users can use preloaded watch faces, download others and customize their own, it said. Q Founder is compatible with the iPhone and Android phones and was to begin selling in select stores Wednesday for $275, Fossil said.