Intel Corporation (INTC) recently announced that it will team up with Luxottica Group SpA (LUX), global maker and distributor of eyewears, to develop high technology smartglasses for the wearables market.
Based in Italy, Luxottica designs, manufactures and distributes fashion, luxury and sports eyewear to over 80% of the world's major eyewear brands. Its best known brands include Ray Ban, Oakley and Persol. It also makes sunglasses for brands like Giorgio Armani, Burberry, Stella McCartney, Versace, Vogue and Donna Karan, among others.
The eyewear, featuring fashionable designs and latest technology, will offer Intel an edge over Google’s (GOOGL) Android Wear smartwatches and Apple’s (AAPL) iwatch. The partnership will help both to the companies to capitalize on the phenomenal growth expected in the niche wearables market. The first glasses are expected to be launched in 2015.
The wearables market offers products ranging from smartglasses to fitness bands and watches. These gadgets appeal to consumers as gadgets as well as fashion accessories. Though currently at a nascent stage, this market is expected to have radical implications on a number of sectors, like fitness, healthcare, medical, industrial and military. A growing number of technology giants, like Google and Apple, are betting high on this market’s potential and developing wearable technology products.
Intel, though a late entrant in the smartphone and tablet market, is firing on all cylinders to expand into the growing wearable technology arena such as smart watches and other Internet-enabled wearables. This partnership with Luxottica is yet another effort by the chipmaker in this regard.
Additionally, in September, Intel teamed up with Fossil Group, the global maker and distributor of consumer fashion accessories, to develop next-generation fashionable products for this market. Reportedly, the new version of Google Glass, to be launched in 2015, will also be powered by Intel’s chips, replacing the ones from Texas Instruments. Additionally, the chip giant has already collaborated with The Michael J. Fox Foundation for Parkinson’s Research to develop a wearable device to better monitor and treat Parkinson’s disease. It also acquired Basis Science, which manufactures health-tracking smart watches, earlier this year.
According to IDC, nearly 112 million units of wearable gadgets are expected to be shipped by 2018. Another report from Transparency Market Research states that the market is poised to reach $5.8 billion by 2018.
We believe that with the recent collaboration, Intel stands to gain from the significant growth potential of this market.
However, success in the wearables space could prove to be crucial for Intel. In 2013, it incurred a loss of $3.15 billion in its mobile chip division. So the company plans to make the most of the promising wearables market.
Intel currently sports a Zacks Rank #2 (Buy).
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