Gartner Research

Low-Cost Wearables Will Challenge Branded OEMs to Increase Focus on Design, Ecosystem and User Value

Published: 21 October 2014

ID: G00269665

Analyst(s): Werner Goertz

Summary

Low-cost wearable devices from China will pose a threat to full-featured, branded devices. Branded OEMs can use market momentum and respond competitively by carefully targeting the right segments, delivering value through apps and services, and meeting consumer demand for more aesthetic designs.

Table Of Contents
  • Impacts

Analysis

  • Apps and Ecosystems
  • Design and Aesthetics

Impacts and Recommendations

  • The second wave of low-price wearable devices from China will create a spike in consumer awareness that branded OEMs can exploit by emphasizing functionality, style and user value
  • Low-cost Chinese smartwatches will soon reach customers who have never been able to afford a wearable device, forcing branded OEMs to choose whether or not to pursue segments where price is the biggest driver
  • Functional integration at chip level will allow Chinese OEMs to further reduce costs and add functionality, challenging branded OEMs to redesign their own devices toward a single-chip architecture
  • Many low-cost smartwatches work on a stand-alone usage model, presenting branded OEMs with an opportunity to compete effectively with devices that act as companion devices to smartphones
  • The Chinese wearables ecosystem will quickly circumvent government restrictions imposed on the Google Now and Android Wear platforms with proprietary, compatible platforms causing branded OEMs to lose exclusive access to Android apps and ecosystems

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