Will Apple Inc. Be the King of Wearables in 2016?

FitBit and Apple are the two brands most Americans think of when it comes to wearables, but the data seem to suggest there’s room for a mid-market supplier to come in and make a name for itself.

Motley Fool Staff
Motley Fool Staff
Dec 9, 2015 at 4:14PM
Technology and Telecom

Among the many players in the wearables industry, Apple (NASDAQ:AAPL) and Fitbit (NYSE:FIT) are two of the most well-known with the most loyal fans. However, the elephant in the room may be the difference between Fitbit's more value-priced devices and Apple's luxury-priced smartwatch.

Many think Apple is asking for more than consumers may be willing to pay, and this will make it difficult for Apple to attract new fans.

This leaves plenty of room for more competitively priced products, from manufacturers like Fossil (NASDAQ:FOSL) and Pebble, to step in and entice potential consumers with their smart devices. Will this indeed cost Apple dearly when next quarter's sales numbers come in?

Listen to the full podcast by clicking here. A full transcript follows the video.


This podcast was recorded on Dec. 4, 2015.

Dylan Lewis: Another thing to look at that IDC noted, was just that there seems to be some room in the middle of this market. So again, from their report, "The average smartwatch or band came in at just over $400, and the average basic watchband came in around $94. This leaves a lot of room for new players like Fossil and niche players like Pebble as they have an opportunity to address this space."

So, I don't know if we'll start to see the blurring of the lines there. I think Apple made it very clear that they want to have this luxury product, and their pricing clearly indicated that. And the way that they rolled it out with these kind of like fittings and this very kind of like luxury high-designer-type atmosphere in the stores and the experience that they curated with that. And you totally see the opposite end of the spectrum with Xiaomi and Fitbit where they're much more accessible and very competitively priced.

So, there might be some middle ground there where I think one of the criticisms with something like an Apple Watch is that it is not, it's not something that if I'm working out and doing some heavy workouts, lifting weights, if you like ding it or something like that, you'd be kind of annoyed, right? If you scratched it or you maybe broke the screen or something like that lifting, you know like that's something that might happen, and so there might be this middle market here that develops.

Certainly Fossil is publicly traded, so that's something to look at. I think IDC, a lot of the names that they're throwing out here are private players right now, kind of smaller players. But it will be interesting to see what Fossil does with that kind of space.

Vincent Shen: Yeah and some of these other competitors like you mentioned with Fossil, a very significant portion of the market, 35% is still not those top five vendors that we talked about. So there's a lot of small players. You know, with Samsung getting knocked out, that doesn't mean that for the next quarter, especially with the holiday season where one certain product might get a lot of popularity and surge with sales, suddenly we have another new player, or even two in that top five. I don't think we'll be able to unseat the top three, though.