Wearable technology is on the rise. Be it smarwatches, glasses, fitness trackers or health monitors – the market is fast filling with new and exciting products, which 10 years ago we’d never have thought possible
This year is fast becoming the one that wearable technology got serious. Established players such as Sony and Samsung have already cemented their claim for smartwatches, whilst Google is putting the finishing touches to its Google Glass glasses. But there’s plenty more.
Mobile News takes a glimpse into the future to see what take-up of such products will be like, how they will develop and how the mobile market will benefit from their arrival.
At first glance, it may seem that there is little motivation for smartphone manufacturers to deviate from a path which involves releasing ever more sophisticated models of almost identical-looking phones.
Indeed, according to analysis firm Gartner, in the second quarter of last year, worldwide smartphone sales reached 225 million units, up 46.5 per cent from the same period in 2012. And the second quarter of 2012 saw the smartphone market grow 42.7 per cent year on year. However, it doesn’t take a genius to work out this kind of growth cannot go on forever.
Market saturation
Analysts agree smartphone market growth is set to decline between now and 2017, due to increased market saturation.
IDC, for example, predicts the smartphone market will only grow 10 per cent in 2017 (compared to 32.7 per cent in 2013). Average selling price (ASP) is also set to decline between now and 2017, by 4.2 per cent in emerging markets and 3.3 per cent in developed markets.
Research firm Citi argues that penetration for smartphones is currently between 75 per cent and 85 per cent in developed markets, meaning a saturation point could be reached as early as this year.
“Device exhaustion suggests that demand growth for high-end smartphones is noticeably decelerating as global saturation is achieved and hardware innovation is increasingly elusive,” Citi said.
This is true for the high-end market in particular. Forrester Research analyst Bryan Wang said: “It’s hard for Samsung and Apple to keep growing market share.”
On top of this, smartphone manufacturers are facing declining revenues from roaming, due to the introduction of ever-stricter regulations from the European Union, and contract lengths that have doubled from 12 months to 24 months – reducing the frequency of upfront payments.
With this in mind, manufacturers are now working on creating the “next biggest thing” that will allow them to maintain revenue in a world where everyone already has a smartphone.
Activity trackers
One area identified by analysts and manufacturers as having the potential to grow on the same scale as smartphones have in the past few years is wireless technology.
Berg Insight divides this into: consumer health devices, sensor devices, smart glasses, smartwatches and wearable activity trackers. Of these, the firm highlights “wearable technology” as an emerging product category with the highest growth potential in coming years.
According to Berg Insight, shipments of wearable technology devices will reach 64 million in 2017 by growing 50.6 per cent annually.
This rise has already begun; the firm said sales of smart glasses, smart watches and wearable fitness trackers –including Nike’s Fuelband and Jawbone’s UP – reached 8.3 million units worldwide in 2012, up from 3.1 million devices the previous year.
Currently, wearable fitness and activity trackers make up the vast majority of shipments, Berg Insight said, but by 2017 smartwatches are predicted to be the largest wearable device segment.
Rival analysis firm IHS has even greater expectations for the wearable technology market, which it defines as including augmented-reality glasses, cocktail dresses that light up when a smartphone rings and sports bras that monitor heart rates. It predicts shipments will have grown 500 per cent between 2011 and 2016 – or from 14 million to 92.5 million units.
However, another research company, GfK, points out that although awareness of wearable technology is fairly high – it ranges from 18 to 50 per cent and is particularly good among men and under-45s – and although there is obvious demand, product cost is too high to achieve mass adoption any time soon.
GfK’s research, carried out in September this year, shows 60 per cent of 16 to 24-year-olds find the idea of a connected smartwatch appealing, though the figure is lower for smart glasses – with only 40 per cent liking the idea. It identified price as a “barrier” to adoption, saying purchase intention halved (24 per cent to 12 per cent) once respondents learnt the cost of a smartwatch is between £150 and £200. Purchase intention for connected glasses also fell considerably after respondents were told of prices – £400 to £600 – from 16 per cent to seven per cent.
Affluent audience
Purchase intention for smartwatches dropped the most for 16 to 24-year-olds, from 32 per cent to 10 per cent.
GfK director of business and technology Anne Giulianotti said: “To get the market moving manufacturers need to communicate tangible lifestyle benefits and offer a sleek design – but even then any wearable tech device will only succeed if it is priced right.
“Our research suggests that the current price points are a barrier, restricting wearable tech to an older, more affluent audience.
“So while consumer awareness and interest is definitely there, we are still waiting for the launch of that ‘must-have’ wearable tech device for Christmas 2014.”
After the wrist, the eyes are proving the most popular part of the body to design wearable tech for. Several products in this area are due to go on sale this year, although the only one to come from a large mobile player is Google Glass – made by the creators of the Android operating system.
Hands free
Google Glass is a pair of specs without lenses but with a small screen hovering above the wearer’s right eye. It is activated by the words “Ok glass”, with spoken commands allowing users to take a picture, video, share to social networking sites, and search for directions.
The glasses also enable users to communicate effectively abroad, by translating what they say into the native language and saying it out loud.
Once they go on sale this year – the product is currently being trialled by those who successfully applied to be a “Glass Explorer” – the glasses will be available in charcoal, tangerine, shale, cotton and sky. Google has not announced UK pricing but US early adopters have had to pay $1,500.
Alternatives to Google Glass have, as with fitness trackers, so far not come from smartphone manufacturers but from outside the market. For example, Recon Instruments, which developed the world’s first head-up display for goggles (targeted at mountain bikers and skiers) has branched out to place this technology in glasses which can be paired with smartphones. When they go on sale this month, Recon’s Jet glasses will have a distinct advantage over Google Glass – they will be compatible with Apple’s iOS as well as Android.
Apple’s vision
Whether Apple itself will be entering the smart glasses market is uncertain. Cook has not ruled out developing a pair of connected specs, but has hinted that he is not as keen on them as other forms.
“There’s nothing that’s going to convince a kid who has never worn glasses or a watch to wear one, or at least I haven’t seen it.
“I wear glasses because I have to. I don’t know a lot of people who wear them because they don’t have to. I think the wrist is interesting.
The wrist is natural,” Cook said last May. Similarly, Samsung is rumoured to be working on its own pair of smart glasses, although this has not been substantiated by the manufacturer or by any solid evidence.
Aside from the novelty of the product, analysts have said connected glasses have numerous applications in the business world.
According to Gartner research director Angela McIntyre, over the next three to five years the industry likely to experience the greatest benefit from smart glasses is field service, which thanks to the productivity benefits offered by the technology could potentially increase profits by $1 billion (£622 million) annually.
Gartner predicts these savings could see the proportion of businesses using smart glasses rise from less than one per cent to 10 per cent in the next five years.
Full article in Mobile News issue 560 (March 24, 2014).
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