Wearable Tech Is Wowing The Market

A big week for wearable devices has helped lift the sector’s investing profile.

To little surprise, Apple Inc. AAPL was the source of some of that good feeling. A report last week estimated that the company had sold 2.79 million of its recently debuted Apple Watches, as of mid-June.

What’s more, according to data provided to a Reuters report, nearly 20 percent of Apple Watch buyers are not only shelling out hundreds of dollars for the initial product but are springing for a spare band, too, giving the tech giant a profitable second profit dip.

Reuters noted that the Apple Watch’s entry-level sports band retails for $49, but costs only $2.05 to make. The data cited by Reuters showed that about 17 percent of shoppers have purchased more than one band.

While the black sport band is the most popular choice for both the band that comes with the device and extras ordered by customers, the $149 Milanese loop is the second-most popular band, suggesting many customers are pairing a practical sport band with a more luxurious option to make the watch more versatile, Reuters said.

That means Apple can capture considerably more revenue above the $349 entry-level sport model.

Coinciding with estimates on the Apple Watch’s past was speculation about the future of its successor.

According to a Forbes.com article citing the skinny from Apple-watching site 9to5Mac, rumors have focused around the Apple Watch 2 incorporating a FaceTime camera and tether-less functionality.

The former would see a HD camera added to the bezel on the front of the watch, allowing Watch wearers to video-conference with one another. Forbes.com noted that Apple itself announced that FaceTime audio will arrive with watchOS 2 later this year, so video may be the logical next step.

A more useful feature being touted for the Apple Watch 2 is extra tether-less functionality, Forbes.com said. It’s purported that features such as emails, texts, and app updates could be hitting the next-generation Watch without the need of an iPhone to transmit the data. This, apparently, is the result of a new Wi-Fi enabled chipset, which will also power a “find my watch” feature.

Apple didn’t have the entire spotlight this past week, however. Shares of Fitbit Inc FIT soared in their stock-market debut, jumping more than 50 percent above their initial offering price, and giving the San Francisco-based company a valuation of about $4.1 billion.

It marked the third-largest US IPO this year.

Fitbit’s devices, which track daily steps taken and calories burned as well as sleep duration and quality, are indicative of the consumer trend toward health and fitness, according to a report in the Wall Street Journal.

The company captures about 68 percent of market share for US activity trackers, according to NPD Group. But the Journal said that some investors wonder if Fitbit can remain such a dominant player in the industry. In addition to Apple’s push, of course, the market is already populated with rivals Jawbone and Garmin Ltd. GRMN.

Market research firm IDC estimated that 72.1 million wearable devices will be shipped this year, more than doubling from last year’s 26.4 million, the Journal noted.

IDC said vendors like Fitbit and Xiaomi have helped propel the industry with their bands priced under $100, but it predicted smart wearables, or those capable of running third-party apps, would take the lead next year.

The Wearable Tech motif has gained 1.9 percent in the past month. In that same period, the S&P 500 is flat at 0.0 percent.

In the past 12 months, the motif is up 10.6 percent; the S&P 500 has gained 8.2 percent.

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