Smartphones have taken the telecom world by storm over the past decade. There has been significant growth in their adoption worldwide, which can be largely attributed to the entry of several new players in this space. However, companies are now looking beyond smartphones to diversify their revenue streams, as the segment is becoming crowded and resulting in shrinking margins. To this end, smart wearable devices have emerged as a promising option for smartphone vendors, giving them an opportunity to explore the potential in the segment.
Wearables are smart, compact and lightweight devices that can be worn by the user and offer connectivity on the move. They comprise one or more of three components: sensors, user interaction capabilities and computing architecture. While in most cases connectivity is enabled through Bluetooth or Wi-Fi in conjunction with a smartphone, some devices also have inbuilt cellular connectivity. These devices can collect, store and transmit data to other devices or to a cloud infrastructure and can be easily paired with other devices. This helps in exchanging data and sharing computing resources. Currently, fitness trackers and smartwatches are the most popular types of wearable devices.
The market for wearables has already witnessed significant growth. There are two kinds of players in the market – smartphone vendors and pure-play wearable device companies. The former currently dominate the segment, owing to the compatibility features offered between the handset and the wearable device. As per research and advisory firm Gartner, 9 out of the top 10 smartphone vendors have entered the wearables market or are about to ship their first product.
In India, the wearables market is currently at a nascent stage, with penetration much lower than markets like the US and China. Xiaomi, Samsung and Motorola are the key smartphone players in the segment, while Fitbit and GOQii are the major pure-play wearables companies. As per research firm International Data Corporation, Xiaomi had the highest market share of 27.1 per cent for the quarter ended March 2016, owing to the success of its affordable fitness tracker Mi Band. Samsung accounted for 2.5 per cent market share, with its smartwatch Gear S2, which comes with the company’s own operating system Tizen, becoming the most popular product in the category. Meanwhile, Motorola’s new Moto 360 smartwatch has become as popular as its predecessor and has helped the company capture 1.4 per cent market share.
Among pure-play wearables companies, domestic fitness band vendor GOQii has emerged as the leader with an 18.1 percent market share. The company gives access to a personal trainer along with every band. Another pure-play wearables vendor that is making a mark in this space is Fitbit. The company accounts for a market share of 6.2 per cent.
Next-generation wearable devices will enhance the freedom of mobile communications, while seamlessly integrating into everyday consumer lives.
One of the major challenges facing the wearable technology market is the design constraints of these devices as most customers wear accessories such as watches, jewellery, wristbands and glasses to make a personal identity statement. The wearables often fail to reflect the fashion sense of the user as most of the smart wearable device manufacturers are focused on technology rather than on design. For instance, most of the smartwatches run on processors and components that are designed for smartphones, which make them bulkier than a normal watch.
Similarly, smartglasses may not reflect the fashion preferences of the user. To this end, some companies have started making devices that look more fashionable. For instance, companies have come up with smartwatches that look more like regular watches than smart devices. Google has also released new variants of its smart eyewear “Glass” with lenses and frames based on the latest styles in eyewear
Another challenge is that smart wearable devices consume a lot of power as most of them use wireless networks, global positioning system and other technologies. Currently, the battery of wearable devices lasts for one to two days and in case of intensive usage, it lasts for less than a day. For instance, the Google Glass battery lasts for 4-8 hours in case of heavy usage.
Further, there are data privacy and security-related issues with wearable devices. Most of these devices are small, but they are able to store a large amount of data. Owing to their small size, they are more prone to being lost or misplaced. In addition, wearable devices use GPS navigation systems to receive location-based information. Sometimes, users have to share their location to obtain certain information. For instance, Google Glass users have to share their location while using online restaurant search engines, which then gets stored in its database. This information can be retrieved and used by advertisers. Although the data is owned and controlled by the mobile carriers and content providers, end-users are concerned about their privacy, despite legal frameworks to safeguard it. Besides, customers face difficulties in using these devices. According to the Accenture Digital Customer Survey 2015, an alarming 83 per cent of the people who purchased smart wearable devices faced difficulties like finding the device too complicated and struggled to set them up. As far as smart fitness bands are concerned, industry data suggests that more than 40 per cent of the users tend to discontinue usage after a few months.
Healthcare-based wearable device companies intend to add new sensors to fitness bands, which will allow these devices to detect various biometrics beyond what is possible today. For instance, companies are working on developing non-invasive blood chemistry sensors that would transmit a laser beam to measure glucose levels and other health indicators. Further, companies are focusing on improving the aesthetics of wearables.
Efforts are being made to integrate the internet-of-things platform with wearable devices. Samsung has taken the lead in this regard with its new product, Smart Home, which allows users to manage their connected appliances through a single application. It is also compatible with the Galaxy Gear.
Apart from adding new features to the existing devices, companies are planning to launch other categories of wearables. For instance, manufacturers are working on smart buttons that could change the colour of a fabric or measure the exposure to ultraviolet rays. There are other types of devices, like a ring that will light up when someone “likes” a photograph on a social media platform.
Some industry experts are of the opinion that going forward, wearables will not require the support of any other device to operate. Currently, all wearables need to connect to a smarter device, like a smartphone, to function. For instance, Samsung’s Galaxy Gear sends an email alert and allows the user to read only a paragraph, however, the user needs to use the phone to actually read the entire note and respond. According to experts, smart devices will have to operate on a stand-alone basis in order to gain mass adoption.
In spite of prevailing challenges, the market for smart wearables is set to pick up considerably in the near future. As per a study by Juniper Research, global wearable device shipments are expected to increase to 150 million units by 2018, a ten-fold increase since 2014. Nextgeneration wearable devices will enhance the freedom of mobile communications, while seamlessly integrating into everyday consumer lives. The Indian market is also expected to witness significant uptake of all categories of wearables, especially in the smartwatches segment, owing to the upcoming launch of affordable smartwatches in the second half of 2016. The increase in volumes will give vendors more scope to evolve on all parameters, such as price, product features and target segments.
Puneet Kumar Arora