Wearables: What to Expect at CES 2016

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With CES 2016 coming up in a few weeks, it’s a good time to review our expectations for wearables at the show. In 2015, wearables were one of the key highlights of the show as the world awaited the Apple Watch, niche segments within the smart watch market were created, smart glasses companies endeavored to fill the void created by Google Glass, and there were glimpses of smart clothing and its promise as the ultimate wearable. Following are five of Tractica’s predictions about what to expect from wearables at CES 2016.

Focus on standalone 3G/4G smart watches.  Smart watches are just getting started, and we expect even more of a presence for these devices at CES 2016 than there was at last year’s show. Although CES 2015 was all about the buildup to the launch of the Apple Watch, CES 2016 is likely going to be about standalone 3G and 4G smart watches that don’t rely on a smartphone as a companion device. We have already seen multiple calls for the Apple Watch to become standalone, and to be separated from the iPhone. According to the latest rumors, the second generation Apple Watch is unlikely to have standalone mobile network connectivity, although Apple has started to move in that direction with native apps in Watch OS2. Last year, we had a handful of standalone smart watches like the LG Watch Urbane LTE and the Samsung Gear S, but this time around we expect to see a much larger selection of both 3G and 4G connected smart watches at CES 2016. Chipmaker Qualcomm is driving most of the momentum here as it leverages its smartphone modems, and builds a strong case for the standalone smart watch. Qualcomm’s CSR acquisition could also enable cellular connectivity to a whole new range of wearable brands like Polar, Suunto, TomTom, and Jaybird. During the buildup to the show, we have already seen Omate announce its standalone smart watch, True Smart. Standalone connectivity makes a lot of sense for sports-focused smart watches and it is conceivable that we could even see cellular connected fitness trackers. Battery life does get impacted with cellular radios being added, however with most smart watch owners used to charging their smart watches every day, this is becoming a bit of a non-issue, although longer battery life is always better.

Advanced analytics on fitness trackers.  Fitbit went public earlier this year, but questions still remain around the value proposition of fitness trackers and Fitbit’s recent stock price reflects some of that uncertainty. At Tractica, we still believe there is a role for trackers, especially for sports and fitness enthusiasts who are looking for that extra edge when it comes to the quantified self and insights on performance improvement. Also, as trackers become cheaper, there is a large population of users who are looking to get fit, but need encouragement and motivation. Therefore, we expect to see a lot more data science and analytics improvements being showcased at CES 2016, trying to woo both the advanced sports enthusiast as well as the fitness novice. Sleep analytics should also see improvements, as well as nutritional analytics where we are heading toward smart algorithms telling us what we have eaten, or rather should be eating, just by tracking physiological metrics.

Smart headphones are likely to be a new device category.  We are likely to see many more smart headphones this year, with the early adopters being fitness buffs and audiophiles. At Tractica, we have long believed that smart headphones could be the dark horse of the wearables market. CES 2016 could be the year when smart headphones truly rise to prominence and emerge as a key new wearable device category. We expect both established headphone brands and new startups to try to crack this space. There has been a lot of activity in this market from new companies like Bragi, Elbee, and Moto Hint, as well as Intel’s collaboration with SMS audio. However, most products are only available for preorder or have been early prototypes. Smart headphones have numerous possibilities as a wearable, as they can be discreet, can integrate smart voice-based assistants, may have their own fitness tracking sensors embedded, and could have standalone 3G/4G connectivity, making them a standalone wearable device rather than just an accessory.

Smart glasses will gain further ground in the enterprise.  Since Google suspended the consumer-facing focus of the Glass project, there has continued to be a significant amount of enterprise-related focus on smart glasses. Tractica highlighted 40 different enterprise wearable case studies in a white paper published earlier this year, in which we found that a large share of use cases from medical to construction and manufacturing have been driven by smart glasses. While Vuzix was acquired by Intel and continues to see adoption of smart glasses into the fitness segment, 2016 will see a continuation of the enterprise adoption of smart glasses. The consumer use case for smart glasses is still a challenging proposition, unless Google comes up with a radical redesign in Glass 2.0. It seems, however, that consumers are much more interested in what Oculus and other vendors will have to offer in the virtual reality (VR) space, and many will not wait for mixed-reality (MR) glasses like Microsoft HoloLens or Magic Leap. In addition, Apple’s acquisition of Metaio has gotten everyone in the augmented reality (AR) community excited. Therefore, smart glasses are likely to experience an increased level of attention by enterprise organizations. There are also companies like Daqri and Atheer Labs that have yet to do a wider scale launch of their smart glasses, which will be much more similar to HoloLens than to Google Glass. So we will be keeping an eye out for what these two companies are talking about at CES 2016.

Wearables are becoming an integral part of IoT.  Wearables have always been considered to be a sub-segment of the Internet of Things (IoT) sector, but market developments in 2016 should illustrate a higher degree of intersection between the broader IoT space and wearables. Smart home and connected cars are two areas where we have already seen some integration, but Tractica expects this trend to intensify in 2016. Wearables are devices that are on you most of the time, but their value increases when they integrate with your immediate environment and provide additional control for connected devices and systems. The Apple Watch integration with AT&T’s Digital Life service is just a leading indicator of where things are headed. This smart home case can be extended into building automation, especially around workplace wearables where an employee could be able to control office lighting or temperature control for where they are seated. Apple seems to be somewhat ahead of Samsung, LG, Pebble, and others in terms of supporting smart home features, but we expect the others to catch up soon. It is no surprise that CES 2016 will include a heavy focus on the connected car, and unlike last year’s Audi and BMW demos with smart watches, we expect to see a wider range of wearable-connected car integrations and use cases emerge, possibly including smart glasses.

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