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Massive growth for wearables

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Global shipments of wearable devices reached 49.6 million units during the first quarter of 2019 (1Q19), up 55.2% from the previous year according to data from the International Data Corporation (IDCWorldwide Quarterly Wearable Device Tracker. While wrist-worn wearables accounted for the majority of the market with 63.2% share, ear-worn devices experienced the fastest growth (135.1% year over year) and accounted for 34.6% of all wearables shipped.

“The elimination of headphone jacks and the increased usage of smart assistants both inside and outside the home have been driving factors in the growth of ear-worn wearables,” said Jitesh Ubrani research manager for IDC Mobile Device Trackers. “Looking ahead, this will become an increasingly important category as major platform and device makers use ear-worn devices as an on-ramp to entice consumers into an ecosystem of wearable devices that complement the smartphone but also offer the ability to leave the phone behind when necessary.”

“Shipments of wristwear – including watches and wristbands – grew 31.6% year over year, and continue to dominate the wearables landscape,” said Ramon T. Llamas, research director for Wearables. “While the functionalities and capabilities have grown and changed, the one common thread is the relentless focus on health and fitness. This has resonated strongly with users and health insurance companies alike, and new health and fitness insights attract a larger audience.”

Company Highlights

Apple maintained the leading position as the company offers three product lines; Apple Watch, AirPods, and select Beats headphones. The Apple Watch in particular has proven to be highly successful at capturing unit share, but more importantly dollar share as the average selling price (ASP) of these watches has increased from $426 in 1Q18 to $455 in the latest quarter. Apple also seems to be employing a similar strategy in its wireless headphone lineup as the latest AirPods are now available with wireless charging and an increased ASP.

Xiaomi ranked second largely due to the popularity of its Mi Band, which accounted for roughly five million shipments. While the company remains focused on the Chinese market, recent investments in Europe and the Middle East have been paying off as the company has managed to gain share in those regions.

Huawei ended the quarter with market-beating growth of 282.2%. The company’s success in the wearables market has been directly tied to its success in smartphones as the two products are often bundled together. However, with the recent uncertainty surrounding the company’s future in smartphones, the outlook for the wearables side of the business will also remain in flux.

Samsung, like Apple, also offers multiple product lines including the Gear/Galaxy watches and bands, the Galaxy Buds, and select JBL headphones. The launch of Samsung’s Galaxy S10 lineup helped the company propel its wearables business through the use of bundling. Outside of that, the JBL lineup of headphones also performed well thanks to the wide variety of options at a low cost.

Fitbit rounded out the top 5 and maintained its positive growth trajectory. The recent launch of the Versa Lite as well as the Inspire series has helped the company reach new users as well as encouraged upgrades, although this has come at the expense of a lower ASP. However, the company remains highly focused on the healthcare/enterprise segment and has continued to make strides in that market, surpassing many of its competitors. 

Top 5 Wearable Companies by Shipment Volume, Market Share, and Year-Over-Year Growth, Q1 2019 (shipments in millions)

Company1Q19 Shipments1Q19 Market Share1Q18 Shipments1Q18 Market ShareYear-over-Year Growth
1. Apple12.825.8%8.626.8%49.5%
2. Xiaomi6.613.3%3.912.3%68.2%
3. Huawei5.010.0%1.34.1%282.2%
4. Samsung4.38.7%1.75.3%151.6%
5. Fitbit2.95.9%2.26.8%35.7%
Others18.036.3%14.344.8%26.0%
Total49.6100.0%31.9100.0%55.2%

Top 5 Wearable Companies, Wrist-Worn Devices Only, by Shipment Volume, Market Share, and Year-Over-Year Growth, Q1 2019 (shipments in millions)

Company1Q19 Shipments1Q19 Market Share1Q18 Shipments1Q18 Market ShareYear-over-Year Growth
1. Xiaomi5.316.9%3.715.5%43.6%
2. Apple4.614.8%4.016.9%14.8%
3. Huawei3.912.5%1.35.3%213.0%
4. Fitbit2.99.3%2.19.0%35.9%
5. Samsung2.06.5%1.14.5%92.0%
Others12.540.0%11.648.9%7.8%
Total31.3100.0%23.8100.0%31.6%

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Huge appetite for foldable phones – when prices fall

Samsung, Huawei and Motorola have all shown their cards, but consumers are concerned about durability, size, and enhanced use cases, according to Strategy Analytics

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Foldable devices are a long-awaited disrupter in the smartphone market, exciting leading-edge early adopters keen for a bold new type of device. But the acceptance of foldable devices by mainstream segments will depend on the extent to which the current barriers to adoption are addressed.

Major brands have been throwing their foldable bets into the hat to see what the market wants from a foldable, namely how big the screens should be and how the devices should fold. Samsung and Huawei have both designed devices that unfold from smartphones to tablets, each with their own method of how the devices go about folding. Motorola has recently designed a smartphone that folds in half, and it resembles a flip phone.

Assessing consumer desire for foldable smartphones, a new report from the User Experience Strategies group at Strategy Analytics has found that the perceived value of the foldable form does not outweigh the added cost.

Key report findings include:

  • The idea of having a larger-displayed smartphone in a portable size is perceived as valuable to the vast majority of consumers in the UK and the US. But, willingness to pay extra for a foldable device does not align with the desire to purchase one. Manufacturers must understand that there will be low sell-through until costs come down.
  • But as the acceptance for traditional smartphone display sizes continues to increase, so does the imposed friction of trying to use them one-handed. Unless a foldable phone has a wider folded state, entering text when closed is too cumbersome, forcing users to utilize two hands to enter text, when in the opened state.
  • Use cases need to be adequately demonstrated for consumers to fully understand and appreciate the potential for a foldable phone, though their priorities seemed fixed on promoting ‘two devices in one’ equaling a better video viewing experience. Identification and promotion of meaningful new use cases will be vital to success.

Christopher Dodge, Associate Director, UXIP and report author said: “As multitasking will look to be a core selling point for foldable phones, it is imperative that the execution be simplified and intuitive. Our data suggests there are a lot of uncertainties that come with foldable phone ownership, stemming mainly from concerns with durability and size, in addition to concerns over enhanced use cases.

“But our data also shows that when the consumers are able to use a foldable phone in hand, there is a solid reduction of doubt and concern about the concept. This means that the in-store experience may more important than ever in driving awareness, capabilities, and potential use cases.”

Said Paul Brown, Director, UXIP: “The big question is whether the perceived value will outweigh the added cost; and the initial response from consumers is ‘no.’ The ability for foldable displays to resolve real consumer pain-points is, in our view critical to whether these devices will become a niche segment of the smartphone market or the dominant form-factor of the future. Until costs come down, these devices will not take off.”

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New exploit exposes credit cards on mobile phones

Check Point Security has found that handsets using Qualcomm chipsets that hold credit and debit card credentials are at risk of a new exploit.

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Now it’s more important than ever to update your phone.
Check Point security has found a vulnerability in mobile devices that run Android, which allows credit card details to be accessed by hackers.

Mobile operating systems like Android offer a Rich Execution Environment (REE), providing a hugely extensive and versatile runtime environment, which allows apps to run on the device. However, while bringing flexibility and capability, REE leaves devices vulnerable to a wide range of security threats. A Trusted Execution Environment (TEE) is designed to reside alongside the REE and provide a safe area on the device to protect assets and to execute trusted code. Qualcomm makes use of a secure virtual processor, which is often referred to as the “secure world”, in comparison to the “non-secure world”, where REE resides. 

But Check Point “fuzzed” a “hole” into this secure world 

In a 4-month research project, Check Point researchers attempted and succeeded to reverse Qualcomm’s “Secure World” operating system. Check Point researchers leveraged a “fuzzing” technique to expose the hole. Fuzz testing (fuzzing) is a quality assurance technique used to discover coding errors and security loopholes in software, operating systems or networks. It involves inputting massive amounts of random data, called fuzz, to the test subject in an attempt to make it crash.

Check Point implemented a custom-made fuzzing tool, which tested trusted code on Samsung, LG, and Motorola devices. Through fuzzing, Check Point found 4 vulnerabilities in trusted code implemented by Samsung (including S10), 1 in Motorola, 1 in LG, but all code sourced by Qualcomm itself. To address the vulnerability, the runtime of Android needs to be protected from both attackers and users. This is typically achieved by moving the secure storage software to a hardware-supported TEE.

Check Point Research disclosed its findings directly to the companies and gave them time to patch vulnerabilities. Samsung patched three vulnerabilities and LG patched one. Motorola and Qualcomm responded, but have yet to provide a patch, and there is no confirmation of a release date yet.

Check Point Research has urged mobile phone users to stay vigilant and check their credit and debit card providers for any unusual activity. In the meantime, they are working with the vendors mentioned to issue patches.

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