CES 2017: The Wearables Market Is Entering a Mature Phase

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At CES 2017, wearables had a dedicated marketplace of more than 80 exhibitors. In addition, wearables were showcased across many other subcategories, including health and wellness, sports tech, sleep tech, and family and baby tech, totaling more than 250 exhibitors. We are indeed seeing a digitization and democratization of healthcare, which is becoming a central theme for wearables, very much in line with the findings in Tractica’s Wearable Devices for Healthcare Markets report.

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Smart Watches

While CES 2016 had more activity and less substance around wearables, 2017 felt like the market is maturing and moving beyond the lack of differentiation and trough of disillusionment. The market has found its voice, becoming coherent and moving beyond the initial hype. Fossil provided the best antidote to the general negativity that you see in the press concerning wearables. Rather than being a market that is on the wane, Fossil’s multiple brands and its recent acquisition of Misfit demonstrated how fashion and accessories can be used to successfully market smart watches, with technical features cloaked in the background. Fossil plans to launch more than 300 connected watches during 2017, which makes it one of the strongest contenders in the market going forward. Its hybrid watch, which has an analog frontend with a digital backend, is an example of how Tractica sees the market maturing. At the same time, pure touchscreen watches like the Samsung Gear S3 running on Tizen were prominently showcased at the show, and given equal prominence to Samsung’s flagship products like TVs and washing machines.

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Pebble’s demise and recent acquisition by Fitbit, rather than being a bellwether for this market, provides important clues as to where many of the smart watch companies have gone wrong. Fossil’s focus on the fashion and accessories aspect of smart watches seems to have been taken directly out of Apple’s playbook, and is something that traditional watch vendors like Fossil are beginning to replicate and scale. At the same time, Fitbit sees the smart watch as an extension of its fitness tracker and understands the need for fashionable accessories to compete in the space. Smart watches are a key category for wearables, and if what was visible on the showroom floor at CES 2017 represents where the industry is going, the movement is surely heading in the right direction.

Smart Clothing

Apart from smart watches, Under Armour (UA) expanded its smart shoes lineup, adding three new shoes to its Speedform product category. It also added new functionality that allows runners to assess their readiness before a run by jumping a few times. UA also announced a smart sleeping apparel product for professional athletes, which emits far infrared waves to help athletes recover faster. Kevin Plank, UA’s CEO, also mentioned in his keynote update that UA will provide smart connected apparel and footwear to all 30 Major League Baseball (MLB) teams beginning in 2017. UA is definitely leading the wearables wave among sports apparel companies with incumbents like Nike and Adidas barely dipping their toes into the water.

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Hearables

Hearables are going to be a definite trend in 2017, not just for smart connected earphones, but also for hearing aids. The ReSound smart hearing aid can connect to a smartphone, enabling volume control and ambient sound filtering, and features a Bluetooth headset. Sony also showcased its Xperia Ear product, one of the first of its kind that can provide smart assistant functionalities through an earpiece, becoming a valuable accessory to the smartphone and using head gestures to interact with the device. One could argue that Apple’s AirPods will soon take over these functionalities, giving Apple another wearable under its belt after the Apple Watch.

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Augmented Reality Headsets

There were also a number of exhibitors featuring augmented reality (AR) headsets or smart AR glasses. For the first time, we had mixed reality (MR) headsets on display at the show, including the Microsoft HoloLens and the Daqri Smart Helmet. It is clear that the AR headset market is moving beyond basic assisted reality, as showcased by Google Glass, Vuzix, and Epson, into more MR type functionality. MR features three-dimensional (3D) holograms that are placed in the context of the environment around it, unlike assisted reality, which simply overlays a screen in front of your eyes without any contextual information.

However, both Daqri’s Smart Helmet and Microsoft’s HoloLens felt cumbersome to wear for extended periods, with the field of view (FOV) being one of the major limitations. Daqri also showcased its new smart glasses during the show, which are priced at $4,995 for the developer edition. Osterhout Design Group (ODG) showcased its R9 and R8 smart glasses, with a wider FOV and a suggestion that it could be used for consumer use cases such as gaming and entertainment. However, the pricing for the R8 and R9 glasses at $1,000 and $1,800, respectively, is still beyond the reach of most consumers. Another interesting product is the Occipital Bridge, which is the Samsung Gear VR equivalent for AR.

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For now, the market for AR headsets is clearly centered on enterprise use cases, but the consumer market for AR glasses is not far behind. Both Amazon and Apple scouts were seen hovering around the Augmented Reality Marketplace, which suggests that we are very close to seeing one or both of these players kickstart the consumer AR glasses market, which could change market dynamics. At the same time, the sports market continues to be a key industry vertical for AR glasses with Intel’s Recon, Kopin, and Oakley all showcasing AR headsets for athletes or cyclists.

Wearable Cameras

At CES 2016, we saw one of the first 360° vision cameras from Ricoh. This year, there was an abundance of 360° vision cameras from Kodak, Insta360, and Humaneyes Technologies, among others. However, the next step in cameras is likely to include stereo depth sensing technology. A few companies at the show were showcasing compact 3D stereo cameras, including Weeview’s Eye-Plug and  Stereolabs’ ZED, which can capture images and video in high resolution and depth. Most cameras capture images and video with a single lens, so the experience is only two-dimensional (2D). Just like your eyes, stereoscopic cameras have two lenses, which add depth as the third dimension. Once you combine 360° vision with stereo depth in a compact wearable camera form factor, it raises interesting VR applications, massively enhancing the immersive experience. If you have been underwhelmed by a 360° video or photo on a VR headset, it is most likely the 2D capture that is responsible. The best way to enjoy a 360° image or video is through a VR headset, and as the VR headset market grows, so will the market for wearable cameras that can capture both 360° video and stereoscopic depth. This is an area worth keeping both eyes on.

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