Right time for wearable devices

China witnesses rising fascination for smart watches and bands

Guo Wanting was ecstatic when he heard that Apple Inc would release its smartwatch in China.

The 33-year-old automotive engineer in Shanghai has always been a bit of a "tech geek" and could not wait to get his hands on the latest must-have gadget.

"I went online and immediately placed an order for the watch," he recalls, buying the cheapest model at $349. "Once it arrived, I immediately showed it off to my friends on WeChat."

China is being swept by a passion for wearable smart bands and watches, and major international players are muscling in.

At the top of the scale is the Apple Watch, which was rolled out in April. Prices range from $349 (308 euros) to $17,000 for the limited edition model of 18-karat gold.

The Moto 360, which was unveiled by Lenovo Group Ltd, the multinational Chinese technology company, is considerably cheaper at $249. It is the first smartwatch available in China which runs on Google's Android Wear operating system. Down at the bottom of the market, Jawbone Inc, a world leader in consumer technology and wearable devices in the United States, launched a smart wristband here as early as 2013.

Last year, Garmin Corp, which is well known for outdoor electronic products and is based in Taiwan, also released a smart wristband along with market leader Fitbit Inc.

But then the market for wearable devices is expanding rapidly. By late July, technology company Xiaomi Corp in Beijing announced it had sold more than 6 million smart wristbands since they first appeared in Chinese stores last year.

"Because of the advancement of Internet accessibility, wearable tech has expanded to everyday consumers through continuous innovation," Oliver Rust, managing director of Nielsen China, a leading information company, says.

This has prompted Huawei Technologies Co Ltd to jump on the bandwagon. The Chinese technology company has signed a deal with Jawbone to integrate its "health and fitness application" into a wide range of Huawei wearable devices.

Even online platform WeChat, which is part of Internet heavyweight Tencent Holdings Ltd, has developed a single, centralized operating system for smart bands and watches.

After starting in the health and fitness sector, WeChat plans to "connect everything eventually". Already in first-tier cities such as Beijing, consumers can even use a basic wearable "tracker" device, or Shuashua Bands, as a "payment swipe card" for public transport.

"Wearable tech is being designed to give consumers a more personal experience," Rust says.

It is also proving exceptional good business for the tech companies looking for the next big product.

Data released by consultancy firm iResearch in Beijing showed that the total shipment of wearable devices, including smart watches and bands will top 40 million by the end of this year, an expected jump of 128 percent compared to 2014. By the end of next year, the number is poised to increase by 85 percent to 75 million.

Already the Chinese wearables market is predicted to hit 11.49 billion yuan ($1.8 billion) by the end of this year, and will grow another 47 percent to 16.94 billion yuan by 2016, according to iResearch.

"By catering to individual demands with this technology, we are seeing a new niche developing with massive opportunities," Rust says.

Figures released by Global Systems for Mobile Communications Alliance, an industry body, showed that wearable child tracking devices are helping fuel strong demand here. Telecoms operator China Mobile has estimated that there are up to 50 child tracker bands on the market.

But this is not the only area of growth. A survey from the Consumer Electronics Association in the US reported that 67 percent of Chinese consumers used wearable smart watches or bands to monitor their fitness. Nielsen has come up with similar findings.

"Today there is a huge emphasis on aesthetics and design in technology, while health is an increasingly important topic for today's Chinese consumers," Rust says.

"By creating an outstanding consumer experience that focuses on these attributes, wearable tech will enjoy high growth in the near future."

Low prices have helped fuel sales of fitness smart bands. They use sensors that count the number of steps a person wearing a device has taken before relaying that information to a smartphone app.

Xiaomi's sales success can be largely attributed to that. The company's fitness bands retail at just 79 yuan each.

At the other end of the scale is the upmarket smartwatch segment. Apart from Apple's products, sophisticated models include the Kairos Watch range, which was released by the South Korea-based company of the same name last year and retails from $499 to $1,199.

Looking like a conventional Swiss-made mechanical timepiece, the Kairos can display text messages, notify the wearer of incoming calls and interact with smartphones and tablets.

Early this month, LG Corp announced plans to upgrade its Urbane 2 smart watch with an all-metal design. It will have 4G LTE connectivity and high-quality voice controls. The South Korea-based electronics giant has yet to reveal a price range for the Urbane 2 or a launch date.

Leading Chinese companies are also moving into the market. Apart from Lenovo's Moto 360, Huawei started selling its high-end Huawei Watch in Germany last month.

Again, it looks similar to a mechanical timepiece but has all the "smart functions", such as texting and e-mail. Prices range from 399 euros ($453) to 699 euros. A Chinese launch date has yet to be announced.

"A large number of Chinese companies rush to do the same thing once a product is popular," Yu Chengdong, head of the consumer division at Huawei, says. "But most of them will be struggling in three to five years time. At Huawei, we stick to the rule of making only top-class products."

shijing@chinadaily.com.cn

(China Daily Africa Weekly 10/23/2015 page19)