Wearables at CES 2015

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CES 2015 was a show dominated by wearables. They were all around and not just limited to a specific set of companies or markets.  A wide variety of devices including activity trackers, smart watches, foot sensors, smart glasses, and pet trackers were on display. There were also some great conference sessions, which provided food for thought. For someone that covers the wearables market as a whole, it was slightly overwhelming, but I came away from CES with nine key takeaways about the defining trends in the wearables market.

  1. Smart watches are becoming the centerpiece device for wearables. Until now, it was activity trackers that defined wearables, but 2015 is going to be all about the smart watch. This was evidenced by the sheer number of smart watches on display at the show from the big brands like Sony, LG, Motorola, and Samsung or from the newer brands like Withings, Wellograph, Basis, Zensorium, Magellan, and Burg. Apple Watch fakes were also spotted at the show. The Apple Watch is a key reason for the industry coalescing around the smart watch. Apple has legitimized the market even before launching its product. However, there are other reasons why the smart watch is taking center stage. For one, the wrist is arguably the most underutilized piece of real estate on the body and balances accessibility and social awkwardness by providing a glanceable user interface. We haven’t even started on the unique interactions one can create with a connected watch through touch, heat, and vibrations as it sits on your skin rather than in your pocket. Other reasons are explored below.
  1. Utility will define the smart watch segment. The utility of activity trackers is simple. They measure your activity levels and help monitor that activity on an ongoing basis. If you are into fitness or are interested in your sleep patterns, trackers are for you. However, they don’t do much beyond tracking your activity and have struggled with retention issues. Smart watches help solve some of that by providing additional utilities like telling time, providing smartphone notifications, transforming into a payment device, providing identity authentication, or simply being a fashion accessory. The market will be diverse enough to include watches trying to do everything, as well as watches specializing in specific activities. One clear indication from CES is that different vendors will target different markets and different sub-segments. This trend is also driving chip vendors including Qualcomm, Freescale, ARM, and Broadcom to provide a range of solutions that address everything from a high-end multi-function watch to a basic MCU-driven watch.
  1. Smart watches are breaking into niches. At CES, there were specialist watches for triathlons, marathons, swimming, golfing, sleeping, and everyday running. All of these are in a watch form factor rather than a tracker form factor because watches can display a range of information, and provide additional utilities. Garmin has further categories for professional athletes or semi-pro athletes, while there are designs specific to males and females. At the other end of the spectrum, the Basis Peak watch specializes in catering to the average person interested in keeping fit and, more importantly, changing their habits, using heart rate as the basic metric for their algorithms. Wellness was a popular theme with smart watches and one watch that really impressed me was the Zensorium Being, which tracks your mood and stress in addition to heart rate, activity, and sleep. Some of this is also being driven by the fact that people will own multiple watches, depending on their utility and function.
  1. Traditional watch faces are becoming smart. The Withings Activite Pop has received a lot of attention due to its looks and simplicity. What Withings has nailed is that you don’t need a fancy touchscreen to enable smart features. On the face of it, it looks like a normal watch, but look closely and it has a dial to track your steps. Casio also had their traditional watch face G-Shock watches that connect to your smartphone and provide notification, weather updates, steps, etc. Other smart watches that went for the traditional look included Martian and iFit. Expect to see many of the traditional Swiss watchmakers embracing smart but in a traditional watch UI. Tag Heuer was rumored to launch a smart watch at CES, but it didn’t come through. If and when they launch, it will most likely be reusing their traditional watch real estate and sticking to aesthetics.

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  1. Don’t be fooled by the fakes and me-toos. While one could spot the niches, there were a number of me-too watches and trackers within those niches, so much so that the general consumer or industry watcher might see CES as being a disappointment from a wearable perspective. I also tracked down the fake Apple Watch at the show, which I was told has already sold 10,000 units although I wouldn’t take their word for it! It’s quite clear to me that the market will take off with the Apple Watch later this year, but this will be followed by a long tail of niche segments and sub-segments as evidenced at the show. If you look at the wearables market from a value chain perspective, CES demonstrated that the value chain is ready and the market is already thinking of ways to differentiate from Apple, although the attempts might seem rudimentary. The important thing to note is that the machinery for the smart watch market is in place and we are at the very beginning of the cycle. This is what one would expect at the early stages of any new product category, rather than expecting a mature well-differentiated marketplace.
  1. Smart glasses are far away from consumer reality. The news about the demise of Google Glass didn’t have an effect on the number of smart glasses that were on show at CES. Sony and Toshiba both had smart glasses at their booths, although both were non-commercial beta devices with no timeline for commercial launch. Another vendor that has caused a stir in the press recently is ODG with their military-grade technology. Having been a Glass Explorer myself and having used Google Glass for some months, the ODG, Toshiba and Sony glasses felt extremely basic in functionality and were unimpressive. On the other hand, Epson and Vuzix were showing off their enterprise/industrial smart glasses. Most of these glasses are being used for very basic tasks such as reading bar codes or doing hands-free video calling and are seeing some amount of traction for enterprise-focused applications. It’s ironic that, in terms of software and UI, Google is far ahead of their competition, although their design and form factor is socially awkward. The best bet for Google Glass might be to license their software and OS, and let the market work out the design. Nevertheless, I didn’t see any evidence of smart glasses becoming a consumer technology anytime soon.

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  1. Smart clothing is still limited to athletes and early adopters. We didn’t really have any major smart clothing showcased at the show apart from Cityzen Sciences from France. They too had a smart t-shirt and sensor-infused cycling shorts targeted at the higher end of the fitness market. There were also some smart socks that got attention, but for the most part it was absent. Most of the fitness smart clothing manufactured for the large sports brands is controlled by specialist white label manufacturers, which don’t really need a booth at the show. Having been in contact with some of these manufacturers, I know that they were present at CES, but were purely there to meet suppliers and potential clients rather than have a public face. The pricing for fitness-focused smart clothing is still prohibitive and until that comes down, we are unlikely to see the category move away from the pro athlete and early adopter markets.
  1. Don’t expect too much from wearable UI or software in 2015. With most watches and trackers showing the same basic UI and functionality, CES 2015 did fail in providing any standout UI or software platforms. Apple is likely to lead on that front. There were some encouraging comments made by Yahoo during a CES conference session around the unique touch and feel attributes of the Apple Watch and how developers can take advantage of it. However, its still a new platform with developers unsure of what the market will be, and therefore don’t expect huge leaps. Its been mentioned many times that contextual applications will really drive the adoption of wearables, essentially buzzing us or checking on us at the right moment depending on the task or location. There are multiple issues with the way notifications are done on smart watches today. Compared to Google, Apple is on the back foot when it comes to context-awareness. Also none of the wearables showcased at CES 2015 really provided a glimpse of the contextual applications or use cases. Android Wear has been available to developers for almost a year now, and in that time we haven’t really seen any standout applications or experiences on that platform. LG did showcase its first WebOS based smart watch currently branded for Audi, and gave hope that this market will have additional platform options other than Apple and Google. First looks were impressive, but it’s not clear if LG will push its own WebOS for future versions of the G Watch R or go with Android Wear.
  1. Wearable & IoT interactions are starting to emerge.  There were some interesting interoperability demos, which showcased how wearables could play a role in the larger scheme of IoT. Both BMW and Audi showed off how a smart watch could control their cars in the future. BMW had an app running on the Samsung Gear S, which acts as a remote valet parking assistant. Audi had collaboration with LG, which showed off a brand new WebOS smartwatch that could unlock the car via NFC. Misfit also showed how its new smart bulb, the Misfit Bolt, interacts with its Misfit Shine tracker. As you wake up in the morning, the bulb can simulate a gentle sunrise. At CES 2016, I would expect to see more such interoperability demos of wearables, especially with smart home devices. Keep an eye on Samsung and LG, who are both moving rapidly into that space.
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