Wearables. The niche was once touted as the next big thing, slated to replace smartphones. We have already seen that things didn’t quite pan out the way they were supposed to. Last year in particular was a dismal one for wearables manufacturers with companies like Fitbit, Pebble and Jawbone struggling to make ends meet. However, Warren Buffett believes that the niche still has a lot of potential.
Berkshire Hathway, a multinational holdings company that has Warren Buffett as its Chairman and CEO, has a company called Richline Group in its portfolio. And the company is launching a brand new line of wearable jewelry called Ela. The move comes at a time when the wearable industry is not in the best shape. However, Buffett believes that there is hope for the sector yet.
While speaking with CNBC, Buffett said:
Jewelry is a centuries-old business that isn’t going anywhere, so it’s a safe bet. With the addition of technology, we’re simply updating something everyone knows and loves to better fit our modern age.
Of course, the jewelry of the past did not have batteries and were more of a status symbol and accessory. However, considering the gains that we as a race have made in technology, it is but natural that the things we wear should reflect them as well. Buffett is not exactly know for being an eager investor where technology is concerned. The fact that he is speaking out (and investing) for wearables means that he must have strong hopes from the sector.
And of course, Ela isn’t your normal, run of the mill wearable company either. Richline group is laying more of its focus upon the “Jewelry” part as compared to the technology. With this lineup, tech is more of a convenient add-on. And that is a pretty different approach with regards to the wearables market.
As Richline Group product and innovation manager Cliff Ulrich puts it:
We’ve designed Ela to be jewelry first. As a jewelry company, we understand jewelry retailers and consumers, what they want to carry and buy. They want to create an emotional connection, whether your giving Ela as a gift or buying it for yourself because you just got a bonus. Ela allows you to save memories in your jewelry, like a modern day locket.
Of course, there is a huge difference between the Ela lineup and the tradition line of wearables. The latter is marketed not as jewelry but as ultra-smart accessories. Meanwhile, the Ela lineup will consist of pieces that have bluetooth and that can be connected to a smartphone app to offer standard wearable functionality such as fitness tracking.
Well, companies like Fitbit (which laid off over 110 of its employees) and Pebble (which cold its software and IP to Fitbit) haven’t really done much to corroborate Buffett’s confidence in the sector. Let’s see what 2017 brings for the niche.
