The deceleration was driven by a decline of 9.2% in shipments of basic wearables over the period, while shipments of higher priced smart wearables actually increased 28.4% in the quarter, suggesting that consumers are increasingly interested in the expanded capabilities of more technologically advanced products. Furthermore, while watches and wristbands accounted for 95% of all shipments in Q1 2018, other products are rapidly growing in popularity. Shipments of sensor-laden clothing, for example, grew 58.6% compared to Q1 2017. The vast majority of these products are step-counting shoes but companies are offering increasingly diversified sensor-enabled apparel pieces, such as shirts and shorts, primarily with fitness tracking functionalities.

Health-related capabilities are still the focus of many wearables, and technological advances are allowing companies to integrate ever more personalized and precise tools into their products. “Additional sensors, years of underlying data, and improved algorithms are allowing pillars of the industry like Fitbit and Apple to help identify diseases and other health irregularities,” explained Jitesh Ubrani, senior research analyst…