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Gottfried Leibniz said, “When a truth is necessary, the reason for it can be found by analysis, that is, by resolving it into simpler ideas and truths until the primary ones are reached,” (Brainy Quotes, 2016). The truth that is an industry analysis report allows small business owners to understand and prepare for the external factors that could work both for and against the company. The qualitative and quantitative information highlight an estimation of profitability as it signals much-needed truth on the economic marketplace for which the business will perform. The following industry analysis report is based on the idea of the Panic Watch, a swimmable, wearable device that works to help individuals in distress in the water alert friends and family that help is needed. The report will include information about the industry size, growth rate, revenue and sales projections, along with information on industry structure, nature of participants, key success factors, industry trends, and past, present and future economic, environmental and technological issues.

Industry size, Growth rate, Sales Projections and Revenue

Currently, the wearable technology industry has projections of 411 million smart wearable devices to be sold in 2020 with a combined value of $34 billion dollars (Lamkin, 2016). This year alone, the industry will pull in $14 billion in revenue with smart watches accounting for 50 percent of that revenue, approximately 60 million shipments (Lamkin, 2016). According to CCS Insights, Global forecasts are to reach 123 million in volume with estimated growth of two percent annually (2016). A report released in 2013 about outdoor participation suggests that some 17 million American ages six and older either swim for competition or fitness (Outdoor Foundation, 2013). Sales projections for the Panic Watch are based on 0.05 percent of that segment (850,000) with a price point of $79 amounting to $67,150,000.

Industry Structure

To get a better understand of the industry structure, the five forces model developed by Professor Michael Porter is a suitable tool, (Barringer & Ireland, 2011). The threat of substitutes is low because there is no other company making a device which alerts family and friends when a swimmer is in distress by way of an app. There is at least one other device which signals an alarm to parents. However, this device uses a box located close to the parents and is only suitable for pools. The threat of new entrants could be rated as low because there are many barriers to entry in this industry. Namely product differentiation, capital requirements and government barriers such as patents. The aspect of rivalry among existing firms is also low because the smart watches and fitness trackers are not focusing on the swimmable safety aspect which the Panic Watch offers. There is a huge degree of difference with this product. The Bargaining powers of suppliers and buyers are both at medium because of their ability to reduce the quality of the materials needed for the finished product as well as how sensitive the buyer will be to the cost of the device.

Nature of Participants

The major players in this industry are well-known tech companies with strong financial positions, credibility, and proven and successful products. When it comes to fitness trackers, Fitbit has established itself and created an innovative positioning. According to a survey conducted by PWC, 59% of customers are excited to interact with wearables from Apple (2016). Apple Watch and like products have enjoyed a level of accomplishments which have propelled these companies as industry leaders creating insurmountable competitive advantages. These participants make the competition a challenge in terms of resources which could bring awareness to the Panic Watch. However, the key factors of success could allow the device to create a niche and provide value to its users.

Key Success Factors

The Panic Watch key factors of success include its ability to increase the response time in the event a swimmer is in distress and pinpoint the location of the individual. The technology of the Panic Watch will send messages through an app to shared family and friends of the oxygen levels, heart rate and location of the swimmer in distress. This will allow people to send help quickly and hopefully save lives. There are times when a swimmer may stand a chance and unfortunately drown. There seems to be a new trend with people falling over on cruise ships. The wearable device will offer a GPS location of the individual which could assist in rescue and recovery efforts. One of the main keys to success is there is no other device on the market offering this technology.

Industry Trends

Although the industry is relatively new, there is a promising future for wearable technology. Advancements in technology will only improve productivity, efficiency, connectivity, health and wellness and so much more (PWC, 2016). Fifty-six percent of consumers contend that life expectancy will increase because of wearable technology as well as 57% agree that people will rely more on their wearable devices for support than they do their friends and family (PWC, 2016).

Long-term Prospects

The adoption rate of wearable parallel that of tablets (PWC, 2016). In 2012, some 20% of American had tablets. That number has doubled today (PWC, 2016). In 2014, 21% of Americans enjoyed the benefits of wearable devices. That number is expected to jump to 70% in 2012 (PWC, 2016).

Figure 1 CCS Insight

Past, Present and Future of Economics, Environmental and Tech Issues

It is somewhat challenging to discuss the past economics, environmental and technological issues plaguing the wearable tech industry because the industry is still in its infancy. While all looks promising for the industry, because it is still new, there is a high level of uncertainty. At this point, it is also wise to note environmentally, some materials that are used to make these devices has aroused concern as it damages natural resources. Presently, the economics of this industry is a sound one showing impressive growth for the next four years. There are projections which triple the number of Americans using wearable technology by 2020. Most importantly, Moore’s law which suggests that computing technology doubles every 18 months or so will allow for enhanced generations of the Panic Watch as well as effective processes which can prove cost-effective and value-creating for the consumer.

References

Barringer, B. R., Ireland, R.D., (2011). Entrepreneurship: Successfully Launching New Ventures

(5th ed.). Pearson.

Brainy Quote, (2016). Analysis Quotes. Retrieved from

http://www.brainyquote.com/quotes/keywords/analysis.html

CCS Insight, (2014). Market Forecast Wearables Worldwide, 2014 – 2018. Retrieved from

http://www.ccsinsight.com/images/reports/pdf/Sample_CCS_Insight_Market_Forecast_

Wearables_WW_Jul_2014.pdf

Lamkin, P., (2016). Wearable Tech Market to Be Worth $34 Billion by 2020. Retrieved from

http://www.forbes.com/sites/paullamkin/2016/02/17/wearable-tech-market-to-be-worth-34-

billion-by-2020/#553dc6663fe3

Outdoor Foundation, (2013). Outdoor Participation Report 2013. Retrieved from

http://www.outdoorfoundation.org/pdf/ResearchParticipation2013.pdf

PWC, (2016). Consumer Intelligence Series: The wearable technology future. Retrieved from

http://www.pwc.com/us/en/industry/entertainment-media/publications/consumer-intelligence-

series/wearable-technology.html