These are both clothing companies, they make base layer clothing, socks and other apparel but the core is the base layer. The companies focus on the use of wool as the tried and tested base layer of choice. History has it that wool has long been a great wicking fabric great for outdoor activities where staying dry and keeping warm are essential. My father in law has a saying for wool "Cotton is rotten and wool is cool". Basically cotton doesn't wick and you end up with a foot that looks like a prune if you're skiing.
Based on this manufacturers found that using polysester to create a wool like feel also worked well to wick away moisture. Under Armour has made an absolute killing using this theory. As in all things supply and demand take over and when wool became affordable again but could command a premium price it came back into play. R&D departments aka skiers and outdoors people always knew that wool was a great way to go, really warm, durable and wicked away moisture (oh yeah, and it's green). When a new way to produce it came around and the itchiness went away boom! A new line of products was born.
Founded around '95 Smartwool was the first "brand" to hit this market. It is a fun little brand with a cartoon character for the logo and a fun bright user interface on the website. The products are packaged as a happy go lucky type of product much like "Life is good".
Icebreaker has been in the market since around 1994. The brand is a chic and stylish brand with strong imagery to back up claims of the best base layer in the world. It has a refined, progressive almost European look to it and with images of 
half men half ram and naked women riding them you get a Calvin Klein feel when you look at it.
Both companies use Merino wool. Supposedly the softest, strongest, best wool on the planet. Both have two different ways to capture the same market. Outdoors people who spend money on premium brands. Don't let the cartoon character or the man ram fool you, both command premium pricing and both are doing what they have to do to get you to buy.
In 2005 Smartwool was acquired by the Timberland company. Icebreaker had sales of $100 million in 2010. Neither are hurting for cash and both want to sell. During the outdoor retailers expo in Salt Lake City I commented how Icebreaker had caught my eye with the imagery and the idea (last year). I'm still waiting to see what these guys do for an encore and what they are doing to push their product. In an earlier post I mentioned how companies like The North Face and Mountain Hardware don't need to do much in terms of spending but for a company that is still trying to gain top of mind advantage a decent spend is essential. They could opt for the push method and market directly to customers or they could utilize the interesting dynamics that exist with outdoor retailers and get it in the store, make a presence there and let the store do the advertising for you.
Smartwool has been smart. In a recent trip to Cabela's I saw Smartwool products (only socks). They have created a large enough brand for themselves and have crossed over from simply non motor powered outdoor retailers (think REI) to all aspects of the outdoors. Icebreaker has not made it into the Cabela's type stores. In fact on a recent visit to REI the Smartwool brand had a commanding edge on Icebreaker in terms of SKU's and shelf/rack space. I had a hard time even finding the Icebreaker brand. When I did it was in a small disguised section of the store. (In Icebreaker's defense, Europe is their largest market right now with 1/3 of their sales being there)
If I had to bet I'd say that neither of these guys are going away. It'll be interesting to see how they continue to position themselves. I could see Icebreaker moving into a mod retailer or making a strong push with the current branding into Cabela's type stores and making a bigger splash in the REI's of the world.
For Smartwool... they'll just keep on selling. That's what they do, good product, fun brand, and good marketing. I see them getting bigger and capturing more of the market. They'll likely push for an even bigger presence in the current retailers.
The ace in the hole... online sales, how are they going to attack those? Do they make a push with the Backcountry.com's of the world? Do they do strategic campaigning leading to their websites? The future will tell. Until then, two companies, one product... good times.
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