Under Armor And The Future Of “Wearables”

“Wearables” are invading the market in quick succession with many companies trying to make the most of this still nascent product category. Such products are poised to be the future of personalized technology aimed at making life simpler for customers at a very basic level. Under Armor (NYSE:UA), among other tech companies, is racing fiercely to incorporate technologies into its products. It is the company’s belief that by efficiently using large databases of information (recorded off devices placed on your body) and processing this information through machine learning, anyone can be made faster, more agile and stronger. The Baltimore-based apparel giant is currently focused on rolling out a new line of “intelligent” apparel that will help people record their activities, while providing them personalized feedback on their workouts, which will, in turn, help users achieve their fitness goals.

Under Armor’s latest innovation is a kit called the HealthBox (priced at $400), which it created in partnership with HTC. The Healthbox consists of three main components — a smart scale, a heart rate monitoring strap and a fitness tracking band. All three of these devices can be linked up to the company’s app, Record. ^[1] This app was already present in the market and allowed synchronisation with other companies’ fitness products. The apparel giant is currently in the process of updating this app to best suit its customers’ needs. Since 2013, the company has invested close to $700 million in an effort to make the app more customer friendly. It was noted that none of these apps work together and users tend to lose data when they shift from an old device to a new one. ^[2] Another problem that is cited often is that most fitness apps in the market provide you with an accurate record of your activity, but fail to tell you what to do with the information that is collected. This is where the company hopes to use machine learning to make suggestions to help improve one’s fitness routine. The systematic analysis of the information recorded from your fitness devices can identify patterns and outliers, which can help Record make well informed recommendations to improve your workout routine in real time.

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At the moment, the wearables market is growing at a faster rate than the sports apparel market. It is estimated that the combined sales of health apps and gadgets is going to hit about $120 billion by 2020. ^[3] This figure seems highly plausible as there is a general shift in trends towards eating and living healthy, particularly in the U.S. (Under Armor’s biggest market with almost 89% of total sales). As people learn more about problems such as obesity and diabetes (commonly associated with a bad lifestyle), Visits to fast food establishments have been on a constant decline. For instance, McDonald’s revenue has fallen consecutively for seven straight quarters. ^[4] Soda sales have also dropped consecutively for the last decade. Furthermore, gym memberships have also gone up from 41.3 million in 2004 to about 54.1 million in 2014 (a 31% increase). ^[5] More gym memberships mean higher sales in fitness equipments and apparel, which will further drive the wearables market.

Given the points highlighted above, it seems plausible that Under Armor is headed in the right direction to make a dent in the market going forward. The company already seems to have a long term plan in mind and if all things go well, the athletic apparels market can take a completely different form in the next few years despite competition.

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1. HTC, Under Armor’s HealthBox, www.slashgear.com [↩]
2. How Under Armor Plans to Turn Your Clothes Into Gadgets, www.wired.com [↩]
3. Silicon Valley’s Latest Threat, www.forbes.com [↩]
4. McDonald’s Sales in the U.S. Drop for Seventh Straight Quarter, www.theguardian.com [↩]
5. Number of Gym Memberships in the U.S. from 2000-2014, www.statista.com [↩]