Consumer Technology Growth is Being Fueled by Rising Demand for Wearables
Ronald Monte | October 30, 2017
Technology stocks have long been a growing sector that has been mainly driven by personal computers, smartphones and other devices that have largely been around for some time. There is about to be a major shift, though, towards several emerging technologies including wearable devices that will forever change how people interact with artificial intelligence and other tech.
Over just the past few years, advances in technology have enabled people to pay for things using their watches and even take phone calls on their wrists – a reality long confined to the likes of comic books and movies. The future is now!
But this is only just the beginning. Technology is increasingly being embedded in clothing, eyewear, jewelry, shoes and elsewhere. It’s only a matter of time until not having wearables will put people at a disadvantage. And as more and more products come to market, demand is expected to continue increasing.
By the next decade, the global wearable technology market is expected to be much bigger, especially as the focus of these devices shifts from mainly smartwatches and fitness trackers to also include augmented reality, virtual reality and other use cases that likely have not yet even been invented. These devices are giving us increasing access to information while becoming less a novelty and more integral and important. In just one example, Cemtrex collaborated in 2016 with the apparel brand Alpine Stars to release a wearable tech motorcycle airbag jacket. It was the first product of its kind and could potentially save many lives.
Varying estimates peg the wearable tech market as doubling, tripling or growing even more by just the next decade, depending on which analyst you speak to. But already this year, more than 125.5 million units are expected to be shipped, according to one prominent analyst.
“Given the rising consumer apathy toward smartphones, it is little wonder so many companies are chasing the rapidly growing opportunity presented by wearables,” said another analyst. “We’re particularly excited about the potential for augmented and virtual reality devices.”
As people begin to increasingly embrace wearables and other always-connected Internet of Things (IoT) devices, manufacturers will need to meet that demand in a way that maximizes production and minimizes costs. This will lead them to increasingly rely on 3D printing, blockchain and other emerging technologies; areas they may not have expertise in. As shown in the Cemtrex’s investor presentation, the company’s investors are poised to benefit from this outsized growth when compared to industry peers.
“It’s not just the end users who will benefit from these advanced devices,” another prominent analyst also recently said. “Opportunities also exist for developers and channel partners to provide the apps, services, and distribution that will support the growing abundance of wearables. From a deployment perspective, the commercial segment also stands to benefit as wearables enable productivity, lower costs, and increase ROI in the long term.”ndance of wearables. From a deployment perspective, the commercial segment also stands to benefit as wearables enable productivity, lower costs, and increase ROI in the long term.”
As a leading provider custom of engineering and manufacturing solutions at all stages of product development and production from idea to finished product, Cemtrex (Nasdaq: CETX) is in a prime position to take advantage of this expected spike in demand.
For fiscal year 2016, Cemtrex net income rose 76% on the back of a 65% increase in revenues over the previous year, and an earnings per share (EPS) of $0.59, a 43% improvement on 2015. But the best is yet to come.
“The public company’s strategy has been to seek customers in emerging economies worldwide and pockets of industry in the U.S. that are expanding rapidly, such as the manufacturing of medical devices and automotive electronics,” Crain’s said in including Cemtrex on the list off the back of a 585% explosion in growth since 2013.
More and more experts have begun to recognize this potential and are singing the praises of investing in Cemtrex shares, with one analyst saying that traders are “feeling more bullish” and another calling it an “interesting value.”
This sentiment comes as Cemtrex stock (Nasdaq: CETX) has traded up more than 68% on the year, outperforming the Nasdaq index and proving to be a valued stock in many investment portfolios seeking superior returns to other options in the stock market. Share prices are expected to continue rising through at least the end of the year as the bull market continues to roar, setting all-time highs through the fourth quarter.
A big driver of this surge can be attributed to a unique aspect of the wearables market within personal electronics, the need to rapidly move from ideation to production. This is a byproduct of these devices becoming more mainstream and fashion forward. And consumers are now also demanding more from their devices.
“Now it’s about getting the experience right — from the way the hardware looks and feels to how software collects, analyzes and presents insightful data,” said a leading wearables analyst.
To get it right, these companies are increasingly counting on Cemtrex. More than $2 million in sales related to this sector has already flowed into Cemtrex balance sheets – a number that is expected to double by 2018.
Cemtrex’s team of 100 industry experts to has enabled companies to create unique products not found elsewhere and get them to market in a timely manner. Many of these conversations have also given us insight not found elsewhere, including how many manufacturers plan to move at least some operations back onshore to the U.S. from overseas.
A prime example of this shift is the increased demand for packaging labor, which has has doubled over the past two years and will reach $998 billion by 2020 before hitting $1.1 trillion in 2024. The U.S. will start to take larger amounts of this labor pool mainly because of increasing demand for these products.
As companies bring these operations back home, Cemtrex will be there to help companies of all sizes optimize and streamline them at all stages of the supply chain, reducing costs and getting products into the hands of consumers even faster.
We have just begun to scratch the surface of what the wearables market will be. But no matter which direction it heads in, Cemtrex will create long-term shareholder value by being a driving force to help companies innovate and create a more intelligent, connected future.