As the Internet of Things continues to expand together with 5G, wearables stock surges may be inevitable. Read about it in today’s article.
In this article:
- Record-Setting Quarter for Wearables
- Wearables Leaders
- Top-Selling Wearable Products
- Wearables Stock Surges
- What This Means for Retirement Investing
Wearable Stock Surges and the Continued Growth of the Internet of Things
Record-Setting Quarter for Wearables
The International Data Corporation (IDC) reported that wearable device makers set a new total sales record in Q3 2019. Via its Worldwide Quarterly Wearable Device Tracker, IDC announced that shipments of wearable gadgets totaled 84.5 million units.
According to the report, new hearables contributed the most to this record-setting quarter last year. In particular, they comprised close to 50% of the entire wearables market during that quarter.
Ramon Llamas, who heads the Wearables Team of IDC, says there’s one reason why hearables are the trending wearables these days. It’s because more and more smartphones without headphone jacks are flooding the market, compelling buyers to get wearables, too.
He also noted that further improvements in wireless earphone technology also contributed to the rapid increase in hearables sales. And more importantly, substantial drops in prices due to competition substantially increased demand for hearables, fueling 2019’s record-setting Q3 shipments.
Top technology companies led the record-setting surge in sales of wearable gadgets like the Apple Watch. Chief among the catalysts of this record-setting quarter is Apple.
The massively growing fame of its hearables – AirPods and Beats headphones – and its Apple Watch fueled it to the top spot. With 29.5 million wearable units shipped in Q3 2019, Apple was way ahead of its nearest competition, Xiaomi.
Speaking of Xiaomi, its Q3 2019 delivery totaled 12.4 million units of its Mi Band lineup of wearable products. It took second place mainly because of its aggressive marketing strategies that focused on Europe, Africa, and the Middle East.
Samsung took third place with its Q3 2019 delivery of 8.3 million units of its hearables and new smartwatches. Samsung’s main strategy was to launch its wearables by bundling them with its bestselling smartphones, which worked wonders for it.
At fourth place was Huawei, with 7.1 million units delivered in Q3 2019. This, despite its situation with U.S. authorities, which keeps it from installing Android on its phones, remaining unchanged.
Despite the challenges brought about by the situation with Google that keeps its new phones from installing any Android app, it had one thing going. That “one” thing was its home market, China, is the single biggest one in the world.
Lastly, Fitbit made it to the top five shippers of wearables in Q3 2019 with 3.5 million units of wearables shipped. However, its third-quarter shipments hardly changed from the same period last year.
The Fitbit brand’s future sales and revenues may gain momentum and improve with Google’s recent acquisition of the brand and its wearables portfolio.
Top-Selling Wearable Products
Of all wearables, earwear registered the highest market share and year-on-year growth. From only 11.9 million units shipped in Q3 2018, it jumped to 40.7 million in Q3 2019, which is a 242% growth.
Earwear’s market share also grew by leaps and bounds. From 27.4% of worldwide wearables shipments in Q3 2018, it cornered a 48.1% chunk of the market in Q3 2019.
As mentioned earlier, the likely reason for this jump is the removal of traditional earphone jacks from newer smartphone models.
The second top wearables, in terms of total shipments worldwide for Q3 2019, were wristbands with 19.2 million units. This was a 48.6% increase from the same period in 2018.
People initially bought wristbands for fitness purposes (e.g. counting total daily steps). Later on, wristbands took cues from smartwatches and included health-related smartwatch functions like heart rate monitoring.
Because they’re cheaper than smartwatches, it’s no wonder wristband shipments worldwide registered a 48.6% year-on-year growth in Q3 2019.
Rounding up the top three wearables in terms of worldwide shipments are smartwatches. For Q3 2019, global shipments of smartwatches totaled 17.6 million units, which is 48% higher than Q3 2018.
With many electronics manufacturing giants slashing prices on its relatively older models, more people were able to afford smartwatches. Considering older models weren’t that behind compared to newer ones, discounted prices proved to be worth people’s money.
Wearables Stock Surges
Record shipments mean high revenue growth, which is a key factor of a company’s earnings. And with higher than expected earnings come higher-than-expected increases in share prices and higher-than-expected returns on investment.
Apple Stock Performance in Q3 2019
Consider Apple’s stocks, which, at the beginning of Q3 2019, were $197.92 per share. By the end of that record-setting quarter, its share price went up by 13.16% to $223.97 per share.
On the heels of that record-setting third quarter, Apple’s share price went up by another 31.11% to $293.65 per share. For the entire second half of 2019, Apple’s stocks registered a 48.37% return on investment.
Xiaomi and Samsung Stock Performance in Q3 2019
Xiaomi and Samsung’s stocks aren’t listed on the NYSE and Nasdaq but in their native country’s respective stock exchanges.
Xiaomi’s stocks on the Hong Kong Stock Exchange dropped by 12% from HKD 10.00 per share at the start of Q3 2019 to HKD 8.80 by end of Q3 2019. However, it surged by 22.5% during Q4 2019 to end the year at HKD 10.78 per share.
Samsung’s stock price went up to KRW 49,050 per share by the end of Q3 2019 from KRW 47,000. That was equivalent to a 4.36% market return on investment in the said stock during Q3 2019.
During Q4 2019, it’s price jumped by 13.76% to end the year at KRW 55,800 per share. For the entire second half of 2019, it registered an 18.72% return.
Fitbit Stock Performance in Q3 2019
Talking about wearables stock surges, Fitbit tops the list. Afterword got out about Google’s plan to buy Fitbit, the latter’s stock soared.
After losing 59% of its share price during Q3 2019 on the heels of flat year-on-year sales, Fitbit’s stock surged to as high as $7.26 per share in November 2019. Eventually, it settled at $6.57 per share by the end of 2019 for a 72.44% return during Q4 2019.
What This Means for Retirement Investing
As companies roll out 5G all over the world, the Internet of Things (IoT) will grow significantly. As a result, companies that manufacture IoT electronic products like wearables will reap long-term revenue and income benefits.
The most sensible approach to investing in stocks of companies that make wearables is to stick to the blue-chip ones like Apple. They have the benefit of stability as well as the ability to ride the Internet of Things and wearables wave.
Do you think investing in wearables stocks is a good retirement investing strategy or not? Let us know in the comments section below.
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