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Overview of the Wearable Technology Licensing Market

Much of the wearable computing technology that stole the spotlight at the 2015 International Consumer Electronics Show in Las Vegas last week, including Google Glass and Apple’s highly anticipated Apple Watch, are licensed products forged as a result of the partnership between technology and fashion brands.

The Prospects

The wearables category actually emerged at the 2014 CES. But this year, it really took off. Show producer, the Consumer Electronics Association, predicts 2015 US sales to grow 61% to 30.9 million units, representing consumer spending of $5.1 billion. That’s a yearover- year increase of 133%! In 2014, research firm Endeavour Partners found adoption of smart wearables growing at an accelerated pace because of increased media coverage and retail availability of wearable products, more gifting of the gadgets and their inclusion in corporate wellness programs. But it also found high levels of abandonment, with about a third of users throwing the things in a drawer after 6 months.

Nevertheless, many believe that the market for wearables will continue to develop over the next 2 to 3 years and will undoubtedly be influenced by factors including improvements in design and technology. Of course, some analysts and even consumers remain skeptical and consider tech wearables as little more than a novelty.

The Products

New products shown at CES ranged from a cycling jacket with lights that flash when the wearer lifts his or her arm to signal a turn to an LED light-up bra and the Ringly, an Internet-connected ring that transmits smartphone notifications. Entertainer and entrepreneur will.i.am of the Black Eyed Peas showed off a $400 touch-screen-equipped wrist band (don’t call it a watch) from his tech company i.am+ that can be used for calls, texts, social media and music.

The Brands

With consumers drawn to the category at least as much for fashion as function, many technology, sports and fashion sector brands are jumping in or expanding their licensed offerings, including:

  • Garmin International partnered with designer Jonathan Adler for a collection of patterned accessory bands (similar to changeable watch bands) for its vivofit and vivofit 2 daily activity trackers, shipping to retail in the first quarter;
  • Fitbit, the market leader in health and fitness wearables, expanded its Tory Burch partnership to include silver and rose gold metal accessories and new silicone wristband designs;
  • Wearable maker Misfit teamed with Swarovski for a line of Swarovski Shine products, including waterproof activity and sleep trackers and sparkling accessories;
  • Guess Watches partnered with Martian Watches on a line of smartwatches under the Guess Connect brand and described as “Powered by Martian” that will allow wearers to connect to their smartphone’s voice command app in what may be the first fashion smartwatch to be distributed worldwide through both the fashion watch and consumer electronics retail channels;
  • Smartphone maker HTC is collaborating with Under Armour on a series of connected fitness products that will work with Under Armour’s UA Record fitness tracker apps and website;
  • Consumer electronics manufacturer Sakar International licensed the Bally Total Fitness brand for health and fitness wearables, including activity trackers and a heart rate monitor scheduled to hit retail in the second quarter; and
  • At CES, Intel CEO Brian Krzanich recapped the company’s wearable deals with brands including SMS Audio, Fossil, Opening Ceremony/MICA and Luxottica Group’s Oakley. Oakley and Intel are working on an intelligent product to enhance athletes’ performance, which will be available later this year.

It’s Not Just Wearables

Other emerging categories at CES included 3D printers, 4K Ultra-High Definition televisions, connected thermostats (such as the Nest Learning Thermostat that programs itself and can be controlled remotely using a smartphone or computer), and unmanned systems (drones and home robots). Collectively, CEA expects these categories to double in revenue this year. Some brand and licensing announcements that stood out:

  • 3D System will develop a chocolate 3D printer with The Hershey Co.;
  • Seedonk International signed a brand licensing agreement with Kodak for a series of video care monitoring products, beginning with the Kodak Baby Monitoring System, which was selected as a 2015 CES Innovation Awards honoree;
  • Netflix created a Netflix Recommended TV logo program to help consumers identify smart TVs that work well with Internet TV services. Sony, LG, Sharp, Vizio and manufacturers of Roku TVs are expected to deliver models with the Netflix Recommended TV designation this spring;
  • TV manufacturers including Haier, HiSense and Insignia will introduce Roku-branded TV sets featuring the same content available on Roku streaming boxes.

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