Wearables market ‘shifts’ into high gear

Article By : Dylan McGrath

Many of the smartwatches hitting the market this year will cut out the smartphone middleman and connect directly to the cellular network on their own, analysts say

« Previously: Savvy geek: Wearables blend fashion with function

The wearables market is on the verge of kicking into high gear with smartwatches, fitness trackers and a host of other products that take the concept from its early stages to a more mature product category, according to Ramon Llamas, research manager for IDC's Wearables team.

"The wearables market is doing something that is very important. It’s shifting," Llamas told EE Times.

Blocks smartwatch (cr)
*Figure 1: The Blocks Modular Smartwatch. Born with a Kickstarter campaign that raised more than ₹10.88 crore ($1.6 million), the concept of Blocks is that it enables consumer to custom-build their own watch by choosing a watch face and surrounding it with modules that provide various functionality. The company is accepting pre-orders through its website, but has not definitively said when the watches will ship.*

Llamas expects sales to continue climbing in 2017, driven largely by two major enhancements to wearable products: the addition of cellular connectivity to smartwatches and “wearables that look like wearables, not electronics devices.”

To illustrate his point, Llamas pointed to the evolution of the cellular handset last decade. "In 2006, silver clamshell phones were all the rage," he said. "But the market didn't stop there. It changed, it evolved. The same thing has happened in the wearables market."

First off, many of the smartwatches hitting the market this year will cut out the smartphone middleman and connect directly to the cellular network on their own. Products from Samsung and others started creeping up last year, but according to Llamas there will be more on the way in 2017.

The advantage of this cellular connectivity in a smartwatch, Llamas said, isn't necessarily the ability to make calls right from the wrist. "Think about all the applications that you are going to be able to use to communicate with different people and things," he said.

Tag Huer smartwatch (cr)
*Figure 2: The 2017 TAG Heuer Connected Modular 45, the second generation of smartwatch developed by the famous Swiss watchmaker in collaboration with Google and Intel and Google, went on sale earlier this week. These watches also embrace the modular concept and boast Android Wear 2.0, GPS, NFC and an AMOLED screen.*

But the second major change taking place in wearables now may well have a more profound effect on the market. A number of smartwatches hitting the market in 2017 will look much less like high tech gizmos and more like their conventional counterparts, he said. These devices are not necessarily dominated by a prominent LCD or LED touchscreen to offer a digital readout, but may in fact have the old-fashioned big hand and little hand clock face. In other words, a watch that is contemporary, stylish and "actually looks like a watch," he said.

As an example, Llamas pointed to watchmaker Fossil. He said the company is coming out with 300 different models this year, and that a fair number of them are likely to be smartwatches and "hybrid" watches that look indistinguishable from mechanical watches but offer fitness tracking and other "smart" functionality.

Fossil smartwatch (cr)
*Figure 3: The Fossil Q hybrid smartwatches offer the style of a classic analog watch but with smartwatch functionality such as filtered notifications, sleep and activity tracking and even a "selfie button."*

Fossil has already announced that it would update its Fossil Q smartwatch product line to incorporate Android Wear 2.0.

"The technology is doing exactly what it should do: it’s becoming invisible," Llamas said. “The market is shifting, it’s pivoting. We are getting to the point where people who have been on the fence about wearables, 2017 is the time they are going to start opening up.”

For now, the fitness tracker still dominates the wearables category, with Fitbit commanding more than 19% of all wearables market share in the fourth quarter, according to IDC. However, Fitbit is heavily focused on the U.S. market, which according to IDC is rapidly approaching saturation for fitness trackers.

IDC wearables vendors (cr)
*Figure 4: Worldwide top 5 wearable device vendors (Source: IDC)*

IDC also spotlighted the rise of a new category of wearable devices—ears-worn devices known as hearables. Hearables, which include devices such as wireless earbuds and smart headphones, accounted for more than 1% of all wearables shipments in 2016 for the first time, according to the firm. Numerous hearables are expected from prominent vendors this year, pointing to the potential for further growth, IDC said.

First published by EE Times U.S.

« Previously: Savvy geek: Wearables blend fashion with function

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