The phone distribution and logistics business - operating as
Ingram, which has 1,500
Company officials would not say how much the Fitbit and Jawbone contracts were worth, but they described the deals as "material" to a division that reported
"These companies are getting a lot of traction and generating considerable volume," said
The market for wearable tech - everything from standard earphones to digital skin patches - will grow from
"There are a lot of markets that wearables can address: in particular, health care," said
The emerging industry is still a drop in the ocean compared to Ingram Micro Mobility's main source of business, the mobile phone industry.
Consulting giant Deloitte, which defines wearable electronics more narrowly, gives a much smaller 2014 market estimate of
That compares to 1.8 billion mobile phones sold in 2013, according to
"Wearables are growing faster. They're just much, much, much, much smaller," said
Ingram sees the gap, and it has no intention of steering away from its existing phone business, Paskoff said. But the growth of the wearable-tech market is hard to ignore, especially as the company looks for a more diverse mix of customers.
"They're still emerging," he said. "It's very difficult for us to quantify whether that's going to be 50 percent of our business in three to five years or 10 to 20 percent of our business. But we see it as being material. And we are putting a lot of time, energy and investment in these new categories."
Paskoff described the new focus as "complementary" to the core of mobile phone distribution and logistics.
To a lesser extent, the company is also pursuing business with home automation customers. So-called smart homes digitally sync appliances with a central control. That market isn't as developed, though, Paskoff said. Ingram has one customer in the niche,
In general, Ingram is trying to reach out to more customers after historically focusing on a handful.
Revenue has hovered around
Executives admit the company, for too long, relied on just one or two big customers, such as
A limited number of customers also means a single acquisition or merger can kill a large piece of revenue in an acquisition-obsessed industry. AT&T demonstrated the tumult in 2011 when it announced plans to buy
Tough market No. 2
Ingram appears to be taking the correct approach with wearable tech, even though it's turning attention toward a nascent market, said
"Especially at this stage in the market, it's all about going with some of the stronger companies. It is about brand. If you ask a [retailer], 'What's your most popular health tracker?' More of them than not, they're going to say Fitbit or Jawbone."
Market potential aside, wearable tech could face as much volatility as the phone industry, he and other analysts said.
Fitbit and Jawbone could face stiff competition from the tech giants, much like how
"We'll see a lot of the traditional smartphone vendors enter the space," he said.
Phones still rule
Wearable tech is a piece of a much broader, years-long strategy for Ingram Micro Mobility to diversify its customer base.
The company in April nabbed a long-term arrangement with 360 Group, which is a consortium of four of
Ingram's share price rose 62 percent from the announcement in
"Despite a surprise miss," Barclays analysts wrote, "the long-term story for IM seems intact given potential savings from restructuring, a ramp of new distribution deals at
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