What to Expect from the Wearables Market in 2017

what-to-expect-from-the-wearables-market-in-2017

There is a healthy amount of cynicism around wearables. This is not surprising when you read the news about Intel supposedly laying off its wearables group, Snapchat’s spectacles ushering in a new generation of “glassholes”, Fitbit lowering its holiday quarter expectations, and Apple Watch losing popularity. It is too early to crunch the full year 2016 numbers, as we do not know what the holiday season will bring for wearable companies. But, here are some general thoughts on what Tractica expects in 2017:

  1. Fitbit is reportedly acquiring Pebble for close to $40 million, which sounds like a very good deal for the fitness tracker vendor that is trying to expand into smart watches. We expect more consolidation in the wearables market in 2017. The rubber is meeting the road for a number of wearable companies that have not been able to scale successfully, and are struggling with hardware. Jawbone is another troubled wearable vendor that could be up for grabs.
  2. GoPro will also be acquired in 2017. Camera sales are falling, and its flagship camera drone, Karma, was recalled recently. GoPro is also known to be bleeding hardware engineers and has announced major layoffs. Leading candidates for acquisition are Apple, Google, Samsung, and possibly Snap Inc. Camera manufacturers like Canon and Nikon could try and wade in to this market, as well.
  3. Smart watches will continue to experience growth, while the Apple Watch loses market share, with traditional watch brands, fitness watch vendors, and kids’ watches taking a greater share. Google is reportedly launching two new Android Wear watches of its own in line with its Pixel phone, with voice assistant capabilities. We expect Google Assistant to be baked into the Android Wear 3.0 update in 2017. Android Wear will be at the forefront of connected watch use cases among its growing ecosystem and developer community. Samsung is also likely to launch a Viv-enabled Gear smart watch in 2017.
  4. Apple will try to regain some of its credibility by announcing a connected Apple Watch in 2017 (with a release in 2018) that does not require tethering with an iPhone. We expect 2017 to be another lackluster year in general for the Apple Watch 2, with most users waiting for the connected watch, which will most likely have a new design. Connected watches open up many possibilities, especially related to fitness where a lot of the wearable success has been so far. Real-time artificial intelligence (AI)-based voice coaching with AirPods and Apple Watch is where this is going.
  5. Expect to see more activity and experimentation in the smart glasses/wearable camera space, with eyewear brands and camera manufacturers coming up with their version of Snap spectacles. This will include more simplified wearable camera types of glasses, rather than sophisticated augmented reality (AR) features.
  6. Magic Leap will announce its product in 2017 (finally!) with a release in 2018. Most likely, Magic Leap will compete with the Microsoft HoloLens, providing a standalone AR/mixed reality (MR) headset, pushing Microsoft to release a second version of HoloLens. The first version of Magic Leap is likely to disappoint customers in terms of pricing, bulk, and features. Magic Leap has raised expectations so high that it is very easy to disappoint people with the final product being nothing like what we have seen in the videos. However, Magic Leap’s product will usher in a new era of content partnerships for smart headsets with gaming companies, movie studios, and animation studios.
  7. China’s Xiaomi is likely to overtake Fitbit in terms of shipments in 2017. China and India will see a rapid increase in home-grown fitness and wearable device companies. Other Chinese vendors like Huawei and Codoon continue to push forward in the wearable space. Huawei has recently released its fitness watch, Huawei Fit, which is similar to Fitbit and could end up being bigger than its Android Wear watch. At the same time, Indian device vendor GOQii is also becoming a key competitor for Fitbit in the Indian market. China and India have the second and third largest populations of obese people in the world, with leading rates of heart disease and diabetes. This provides a major opportunity for startups in India to bring innovative fitness and wearable solutions to the market.

Overall, Tractica expects 2017 to be a year with some major announcements and growing mergers and acquisitions (M&A) activity, but in terms of real activity of shipments and volumes, we are unlikely to see major movement, and, quite possibly, slower growth. The year 2017 is expected to be a stopgap one in preparation for 2018, which is when Tractica expects AR/MR technology and connected smart watches to be ready for mass consumer adoption.

Comments are closed.