Pragmatic Kiwis refuse to buy into wearables hype: IDC

“New Zealand is full of price conscious consumers who need to see real value in purchasing a device,” says Chayse Gorton of IDC.

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If there is to be significant growth in the market it will be driven by adoption of devices that are able to solve a problem.

Chayse Gorton, IDC New Zealand

Adoption of smartwatches and fitness wearables is growing year on year, but the latest IDC research suggests Kiwi consumers may already be over the initial hype of these devices.

The New Zealand Device Landscape study from IDC reveals that although wearable fitness device adoption at 11 per cent is now higher than the worldwide average, smartwatch adoption is less than half the average rate in 2016.

“New Zealand's wearable adoption rates could be interpreted as suggesting there is room for significant growth, particularly in the smartwatch market,” says Chayse Gorton, client device market analyst, IDC New Zealand.

“However, on further analysis this hypothesis is not as clear as it first appears. If there is to be significant growth in the market it will be driven by adoption of devices that are able to solve a problem,” says Gorton, in a statement. “This is because New Zealand is full of price conscious consumers who need to see real value in purchasing a device.”

The data was based on the results of the IDC 2016 ConsumerScape 360º survey, which included 1,502 New Zealand respondents.

IDC expects the highest commercial adoption to come from wristbands rather than smartwatches.

Wristbands have the edge

Gorton says across Australia and New Zealand, IDC expects the highest commercial adoption to come from wristbands (58 per cent in 2017) rather than smartwatches.

“I would expect this to be related mostly to the health sector, perhaps monitoring of the elderly for live health statistics,” he tells CIO New Zealand.

There could also be a niche uptake in the childcare sector for monitoring of children on field trips (e.g. GPS tracking) and insurance (where healthy people could reduce their premiums), he states.

He explains fitness wearables resonate well with local consumers partly because New Zealand is a sporting nation, and these devices improve the user's’ tracking capabilities.

As a result, he says, New Zealand fitness wearable adoption lifted from 9 per cent, in 2015, to 11 percent adoption in 2016.

“In contrast, when you look at the adoption of more ‘one size fits all’ style smartwatches, adoption rates are lagging.

“New Zealand smartwatch acceptance was flat year on year, only achieving 3 per cent adoption in the New Zealand market in 2016. For the same countries displayed in the graph below, average smartwatch adoption is 8 per cent,” says Gorton.

In the longer-term only 13 per cent of New Zealand consumers expect to purchase a wearable in the future, and this is already impacting shipment numbers, he states.

Across Australia and New Zealand, wearable shipments declined 15 per cent in the first six months of 2016, compared to the same period in 2015. "This suggests that unlike other countries, New Zealand consumers are quite pragmatic about the technology and not at all caught up in the hype of wearables."

Although consumers value the ability to monitor health aspects in real time, use map/GPS functions, and send SOS messages etc, a greater ROI will be achieved by purchasing devices specific to their individual needs, he states.

For this reason, until the price of smartwatches falls significantly it will be specific purpose wearables that will drive adoption rates, he concludes.