Although many brand vendors have launched wearable products, orders for wearable devices may not be sufficient to drive growth for related component suppliers. The vendors have many different devices and each of them needs only a small amount of components support, according to sources from the upstream supply chain.
Since upstream suppliers need to specifically establish a team as big as a smartphone team to help clients develop new wearable devices, the sources are concerned that their investments in the wearable industry may not return anytime soon, as most non-first-tier brand vendors are still unable to place strong enough orders for wearables.
Seeing that many competitors have entered the wearable devices maket, most brand vendors have taken a conservative approach for the business and are mainly developing devices such as smartwatches or bracelets to test the water. As a result, about 90% of wearable devices shipments are contributed by the two types of products.
However, lacking differentiation and functionality that stands out from existing applications, demand for smartwatches and bracelets remains weak.
The Apple Watch, which was expected to be the leader of the wearable industry, only achieved sales less than three million units prior to mid-June, much weaker than originally expected.
With the Apple Watch's official launches in markets such as Taiwan, Italy, Mexico, Singapore, South Korea, Spain and Switzerland in late-June, whether the wearable device is able to increase its sales will become a key indicator of the wearable market's performance in 2015.
