Luxury Portable Consumer Electronics in the US

PROSPECTS

Luxury wearables now sole segment within luxury portable consumer electronics

Following the collapse of the British luxury mobile phone brand Vertu, the only major brand in luxury portable consumer electronics, in 2017, the category now consists solely of luxury wearables. With consumers having rejected luxury mobile phones in favour of the functionality, compatibility and value of standard smartphones such as Apple’s iPhone, Samsung’s Galaxy and Google’s Pixel models, which they can then accessorise with cases from luxury leather goods brands, the return of the subcategory is unlikely.

Smartwatches drives growth in luxury wearables

While luxury wearables currently faces many of the same challenges that led to the demise of the luxury mobile phones subcategory, including high prices and stiff competition from the mass market, the subcategory continues to enjoy strong growth in the market as consumers increasingly embrace luxury smartwatches as a complement to their non-luxury mobile phones. Although the Apple Watch is largely credited with popularising smartwatches in the US market, in the years since its launch, a number of technology companies and luxury brands have partnered to launch smartwatches with varying degrees of functionality, from customisable dials, notifications and activity tracking at the low end of the scale, to voice assistants and downloadable applications such as Uber at the high end of the scale.

COMPETITIVE LANDSCAPE

Luxury brands expand their smartwatch offering

With the Apple Watch helping to usher in the widespread adoption of smartwatches among US consumers since its initial launch in 2015, luxury and non-luxury brands alike have released a variety of new and revamped smartwatches and other wearable electronics in a bid to compete in recent years. The luxury brands among them include Michael Kors, Emporio Armani, Tissot, Montblanc, Salvatore Ferragmo, Frederique Constant, Tag Heuer, and Louis Vuitton, with the majority of their offerings running on Wear OS by Google software.

Luxury portable consumer electronics enjoys the highest e-commerce share within personal luxury

E-commerce continued to be the fastest growing sales channel for luxury portable consumer electronics throughout 2018 and 2019. The channel represented over one third of value sales in 2019, the highest percentage within personal luxury, which comes as little surprise given the tech savviness of luxury smartwatch wearers.

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