Chinese firms poised to grow as players in the ‘wearables’ market

With demand for wearable devices expected to climb, mainland tech firms expand into sector

PUBLISHED : Friday, 10 October, 2014, 1:26pm
UPDATED : Saturday, 11 October, 2014, 2:41am

More mainland companies, including major brands and a new wave of start-ups, are expected to make rapid progress in the wearable computing devices market over the next few years, tapping opportunities in both consumer and industrial applications.

Worldwide demand for more sophisticated "wearables" is expected to ratchet up by early next year, when technology giant Apple is set to release its category-defining "smartwatch" products.

"A lot of these companies were actually diving into wearable devices before the Apple Watch announcement on September 9," said Mike Dennison, president of Flextronics' consumer technologies group.

"We see their expansion happening rapidly and the types of wearable products diversifying quickly."

Singapore-based Flextronics is the world's second-largest contract electronics manufacturer, with a workforce of 200,000 spread across 30 countries and sales of US$26 billion in its past fiscal year to March 31.

Dennison predicted wearables would become a US$1 billion-a-year, standalone business within his group, which now had 25 clients in that market segment compared with about three some two years ago.

Vice-president for product industrialisation David Johnson said Flextronics was working with four mainland companies, including start-ups, on wearables. He said other mainland firms were showing increased interest in the area.

More engagement with domestic companies augurs well for Flextronics because of the wearable segment's big potential on the mainland.

"Wearables are a high-growth market that no hardware or software vendor can ignore," Matt Wilkins, a director at market research firm Strategy Analytics, said in a report. "We expect the United States, Britain and China to be among the largest markets for wearable users worldwide in the next five years."

Computer giant Lenovo launched its first wearables - two internet-ready "smart glass" models - in July. The industrial-focused M100 was designed with US firm Vuzix, while the "New Glass" model for mainland consumers was developed with a company called Ceyes. Both devices feature mainland-developed operating systems.

They were products of Lenovo's new business development division, which "partners with smaller companies focused on unique, innovative concepts", said Lenovo chief technology officer Peter Hortensius.

Shenzhen-based ZTE, the world's fifth-biggest telecommunications equipment supplier, introduced its "Blue Watch" early this year. The smartwatch can be used as a remote camera controller, a pedometer, caller ID display and for accessing social media.

Flextronics makes wearables such as the fitness activity-tracking wristbands from Fitbit and Jawbone, smart sports goggles from Recon Instruments, and biometric sportswear from OMSignal.

Technology market research firm IHS forecasts that global shipments of wearables will reach 130.7 million units by 2018, up from 51.2 million last year. The market comprises five categories: military, industrial, infotainment, fitness and health care.

But Dennison said research firms offered different estimates of the wearable segment's market size, which showed "inaccurate expectations of what the market is and could be".