Going into CES this year, there was a general feeling among many industry participants that the news around wearables would be subdued, with 2016 being a year when the hype starts to simmer down and the actual work of getting the technology into consumers’ hands starts. Now that CES is over, we can safely say that wearables are entering a testing phase, where the majority of offerings on the market have yet to establish a credible value proposition, with most devices still in the early adopter or experimentation stage. Walking around the show floor, it was quite evident that fitness remains the main focus of wearables with everything from fitness trackers to smart watches, smart shoes, and smart clothing. Fitness is the most direct and well-understood value proposition. Other value propositions like notifications on a smart watch are still unclear for the majority of people.
Smart Watches – Trough of Disillusionment?
Unlike CES 2015, which had a number of smart watch announcements, this year there was just one major smart watch announcement from Casio. While others like Samsung and Huawei chose to upgrade their current range of watches with new styles aimed at women, Casio decided to focus on an outdoor adventure watch that helps with activities like fishing, cycling, and trekking. While the military-grade attributes of ruggedness, real-time weather forecasts, and a month-long battery life are impressive, the $500 price tag is likely to put off most people aside from avid outdoor adventurers. Fossil, which acquired Misfit last year, also showcased its Q range of smart watches, utilizing both analog and digital frontends. Tag Heuer had its $1,500 connected watch, which doesn’t really live up to the price tag. My own $150 Pebble watch gives me much more bang for the buck in my opinion, unless you are a fan of the titanium casing and Swiss credentials. Apart from these well-known brands, there were hundreds of companies from China offering Apple Watch lookalikes. Untethered smart watches that have 3G or 4G connectivity didn’t show up as much as I had expected, which suggests that smart watch vendors are playing it safe for now.
Lack of Differentiation
The main issue in the smartwatch market today is that of differentiation, with most watches looking similar, especially if they run Android Wear. One would have expected that being digital and having multiple sensors on board would give companies an opportunity to innovate in terms of the applications and use cases, but that has not happened so far. Also, the Apple Watch has disappointed most people, with sales being much smaller than what was initially expected. We have yet to see Christmas sales figures, but I would be surprised if Apple hits this one out of the park.
Yet to See Broader Smart Home and Wearables Integration
One use case that I have been talking about in the lead-up to the show is the watch being connected to the smart home, not just as a control device but also to receive alerts. One company that might be ahead of the curve here is Martian, which was showcasing voice-based control of Lutron, Ecobee, and Schlage smart home devices. We have seen Apple Watches being used by AT&T in its smart home offerings, but I find it hard to believe that smart watch vendors like Samsung haven’t really pushed the utility of a smart watch in the home. Smart home as a category did have a lot of activity at the show, with some evidence that the market might be experiencing a resurgence, despite the fragmentation in standards.
Fitness Trackers are Still Going Strong
Fitbit, whose value proposition around trackers has been questioned with tracking becoming common in smart watches, finally launched its own smart watch offering called Fitbit Blaze. Unfortunately, Fitbit hasn’t really pushed the boundaries, with the device being quite similar to the Basis Peak watch. Overall, trackers still seem to be going strong, with Misfit announcing a fashionable fitness bracelet called the Misfit Ray. Withings showcased an e-ink fitness tracker device called Go, which can be worn as a clip or as a watch. Jewelry was also a related theme in the tracker space, with companies like Martian teaming up with a high-end jeweler from India, PCH Jewellers. The Indian fitness tracker market is just kicking off, and having a smart fitness tracker that looks like a gold bracelet should go a long way, with India being one of the biggest markets for gold jewelry. Some tracker companies have decided to gamify fitness, like the IRO which uses challenges and games to incentivize users to stay fit. Gamification is already a trend for fitness trackers in the enterprise market, but in the consumer space it is still new.
Smart Glasses are Here to Stay in the Enterprise
As expected, smart glasses are gaining traction within the enterprise. Both ODG and Sony were out in force, demonstrating their enterprise use cases for smart glasses and real-life situations where their glasses are being used. DAQRI also had its smart helmet on display at the Intel booth. There were also a number of smaller Chinese companies showcasing smart glasses, which suggests that the technology is getting commoditized to some extent and that pricing of the hardware should see a steeper decline. There have been advances in the Field of View (FOV), with ODG showcasing a prototype with 50-degree FOV, one of the widest in the market. While some dubbed the Sony SmartEyeGlass as a HoloLens competitor, there is still a wide gap in terms of what the vendors showcase in their videos and what they achieve in reality.
Smart Clothing is Not Niche Anymore
Smart clothing is not niche anymore and this year we had a number of companies offering smart vests, smart bras, smart shoes, and smart socks, all of which use smart fabric sensors to track biometrics or physical motion. Samsung was the biggest company showcasing smart clothing at its booth, with a smart suit for men, which has NFC tags and sensors embedded in the suit. Both OmSignal and Sensoria had new smart bra products. Xenoma uses smart fabrics to enable motion sensing, which could be used as a gaming interface – think of the Kinect platform enabled through a smart shirt. Smart footwear is now entering the mainstream, with Under Armour launching a smart running shoe that costs $150 and has the ability to track steps and foot placement. The smart shoe technology seemed to be embedded in the shoe itself rather than in a replaceable sole. Another company called Footmoov also launched a line of wearable footwear.
The big trend in wearable cameras seems to be 360 vision. Ricoh’s Theta 360 vision camera is a very impressive device that can capture spherical high-resolution pictures and video without the need for multiple lenses or rigs of cameras. Ricoh sees its camera being used by adventure thrill seekers who use the GoPro but still lack a solution from the leading action camera company. GoPro was showing off its 12 camera rig that is used for spherical 360 video capture, and while the content is impressive, GoPro needs to quickly address the 360 vision market with a much more compact and portable solution. Giroptic is another company that was at the show offering a 360 camera solution in a compact form factor. With YouTube and Facebook both supporting spherical videos, and VR headsets like the Oculus Rift going on sale this year, we should see more of these wearable cameras selling.
Smart Fitness Tracking Headphones
As suggested in our pre-CES blog post, smart headphones were a trend at the show. Misfit launched its smart wireless headphone called Specter, which includes fitness tracking capabilities. Jaybird also plans to integrate fitness tracking features in a future iteration of its E3 wireless headphones. Under Armour also had wireless headphones with fitness tracking features. The next phase would be integrating a smart AI-based voice assistant, something which we could expect to happen at CES 2017.
Gesture control using wristband devices is going to become much more popular, with companies like Sphero offering a gesture controlled version of its BB-8 robotic toy later in 2016. Another startup that gained a lot of attention at CES, and was a finalist for Best of CES, was ZeroUI, which is developing a smart glove technology that can control land-based robots and has the potential to do much more in the future. Think of the Myo armband, but a much more robust and cost-effective solution.
Another interesting wearable device spotted at CES was the Okto smart ring, which can become a phone by placing it on the ear, as it has a microphone and speaker. The Okto ring is a classic example of experimentation in this market, which is interesting but probably doesn’t have a clear use case.
Separate from the show floor, there were a number of interesting conference sessions at CES related to wearables, much more extensive this year compared to last. Session topics included the questions of wearable data accuracy, FDA approvals, healthcare & wearables, IoT & wearables, MEMS sensors, and many others. The sessions gave attendees a glimpse of where the wearable market is headed in the future, which is essentially branching out of fitness into general healthcare. On one of the panel sessions, it was stated that wearables today are targeted at the physically fit, however their real value and larger market proposition is for people that are unfit and especially the elderly. For this market transition to happen also requires a shift in the design and UI of wearables, making them less visible and less fashionable. There is also a need for the sensors and data to become more accurate, so that your physician or healthcare professional can prescribe these devices. While the market is slowly moving in that direction, much more needs to be done by the regulators, the healthcare service providers, eldercare facility operators, insurance companies, and the device manufacturers. The day a wearable device is able to predict a heart attack a few days or weeks ahead of time, is when people will start to realize the value of these devices, and it’s when the real market will take off.