Innovation

Top IoT and wearable tech trends for 2016: Smartwatches in transition as smartglasses rule

This year will prove to be a key year for IoT and wearables as they pair together to revolutionize the enterprise and consumer markets with unprecedented growth.

Smartwatches such as these from Fossil were on display at CES 2016.
Image: Teena Maddox/TechRepublic

The future of wearables, which includes activity trackers, smartwatches, smartglasses and embedded sensors in clothing, is quickly evolving and changing to reflect technological advances and new products available in the marketplace.

At CES 2016, there was a plethora of wearable devices dominating the scene, particularly fitness trackers, sensors, smartwatches, virtual reality and augmented reality headsets, also known as smartglasses. Health-related wearables, particularly those for seniors and babies, and for monitoring sleep and health conditions, constituted a large segment of the new devices on display.

Several industry experts shared their predictions on what we can expect to see in the next 12 months in each of these categories.

A transitional year ahead

John Haggard, CEO of Nymi, said, "2016 is gearing up to be another transitional year for wearables. In 2014, we saw the introduction of several new wearable technologies and form factors to the market, led by fitness trackers. This past year, we've experienced the broader commercialization of many fitness trackers and smartwatches, with adoption rapidly climbing. 2015 was the year where companies started talking about having a wearables strategy which indicates that wearable tech is here to stay."

"In 2016, we're going to see continued consolidation in the market, with single-function devices taking a back seat to devices that feature a useful stack of applications," Haggard said.

There will be a definite shift in the marketplace, according to Liz Dickinson, CEO of Mio Global, which

The Mio line of wearables.
Image: Teena Maddox/TechRepublic
manufacturers the Mio line of heart rate wearable tech.

"We will see a lot of exits from the smartwatch category - either through bankruptcy or acquisition. Meta watch, perhaps Pebble. The fitness band category will see significant price erosion. New entrants like Xiaomi and others will cause fitness and activity band manufacturers to diversify through fashion partnerships. Significantly more fashion brands will enter the activity tracking space. Activity bands will start to deliver more information than just steps, sleep and calories. It is likely they will start to specialize and deliver deeper analytics for functions like swimming, biking and other activity specific applications," Dickinson said.

Brian Ballard, CEO of APX Labs, said "The biggest thing is we've gone from hype to momentum to traction in 2016. It's where rubber meets the road in enterprise adoption. We've seen all the major vendors double down on enterprise. Whether smartglasses or wearables. Watches and fitness trackers are the ones that span both categories."

Ballard predicted that one megatrend will be the collision between the Internet of Things and wearable devices as many major companies are considering how wearables will benefit their manufacturing facilities.

In 2015, industry analysts expected smartglasses to realize $1 billion in annual costs savings in the field services industry, and they estimate the market will grow to $6 billion in 2016, Ballard said.

"I think monocular smartglasses are going to really fly this year in enterprise. I think you're going to see true augmented reality glasses like Microsoft HoloLens and cousins like Epson's glasses bridging gap between the two," Ballard said. "We are seeing some early adoption trends that we think will take off around HoloLens, biometric authentication, token, and wearable IoT sensors."

AR glasses are particularly beneficial in the enterprise. Dan Ledger, principal for Endeavour Partners, said, "We're getting to a point now where Google Glass came out a few years ago and ran its course and Google is working on its new iteration of that and Microsoft has some incredible products. The stuff that in five years you will look back and say, 'I never imagined we were going to be able to do this and create these type of experiences.'"

Smartglasses will be a hot commodity for back-end operations in particular, according to J.P. Gownder, vice

Microsoft Hololens use.
Image: Microsoft
president and principal analyst at Forrester.

"Smartglass pilots for back-end operations (like pick-and-pack work) will outnumber customer-facing pilots (for customer service) three to one. Top verticals will include oil and gas, utilities, manufacturing, transportation, warehousing, and logistics, where they will deploy smartglasses to workers in order to drive operational excellence. Vendors will include Atheer Labs, Epson Moverio, Vuzix, XOEye, and others — but most especially Microsoft, whose HoloLens will be released for enterprises sometime in 2016," Gownder said.

Health programs at work spurring growth

More companies are offering health programs where employees get discounts if they track their activity with a wearable device, and this is opening up opportunity for manufacturers.

A Tech Pro Research report showed that 47% of companies surveyed are using, or planning to adopt wearables within their organization this year. Among those using them, smart watches, sensors and headsets were the three top categories of devices being used, or considered.

Ledger said, "One of the things we're seeing is a huge explosion in employer wellness programs that are continuing to help drive both adoption and engagement on wearable products. These programs wrap another layer of incentives around the experience so people have more to gain by sticking to their wearable devices. We're going to continue to see an increase in these corporate programs."

"The established and more premium activity trackers are starting to feel that, one, if you are well aligned with these programs that it's a good thing. Some of these companies do a lot of wholesale business with employers selling hundreds or thousands of activity trackers vs. selling them one by one to retail channels. What's also starting to happen now is that we get these more sophisticated offerings, the type of activity tracker you have becomes less important," Ledger said.

"If you go to Amazon, you're starting to see the emergence of all these off brand activity trackers that have the same chips as the high end ones and they're selling for $20 or $25. The world is getting a little trickier for those more established players," he said.

Consumer wearables on the rise

The Consumer Technology Association, as previously reported in TechRepublic, predicts that 38 million wearables will be sold this year, with smartwatches and fitness trackers making up the bulk of the sales. The combined revenue from fitness trackers and smartwatches is $4.9 billion.

As for smartwatches, despite their popularity, Ledger said, he thinks they serve mostly as a second screen for a smartphone. "They're mostly products of convenience at this point. If I lost my Apple Watch my life wouldn't change dramatically. This device saves me a few minutes of time every day," he said.

In 2016, "Smartwatches will still have a good audience but they're not yet at a point where they're universally useful to people. They still require a lot of maintenance and charging every night. For a lot of people it's still kind of a novelty. A fun thing to have, it saves you a few minutes of time every day but it's not nearly as essential of a device as smartphones and for some people an activity tracker," Ledger said.

Gownder said, "Smartwatches will continue to grow, but they'll also continue to disappoint some people. They're never destined to become as common as smartphones, but too many people expect them to be. Instead, they'll become a common smartphone accessory that reaches 25 million people globally by the end of 2016."

The consumer demand for smartwatches can be finicky, and investors just as much so, as evidenced by the significant drop in Fitbit's stock price after the company announced its new Fitbit Blaze smartwatch at CES 2016 and investors were underwhelmed.

This year will see more seniors wearing tech, and CES 2016 offered dozens of new devices for seniors, as reported in TechRepublic.

Ted Leonsis, former CEO of AOL and current founder and partner of Revolution Growth. Leonsis said in 2016, "an Internet of Things wearable industry will emerge to monitor the elderly. As the population ages and people live longer, a health care industry that monitors people living alone will become a major new category for investment."

"Quick advancements in wearables for elderly are needed as the world population is aging at an unprecedented rate - it's been reported that by 2050, 2 billion people will be over 60. And those individuals will have grown accustomed to technology being a part of their daily lives, unlike previous generations," Leonsis said.

Invisible sensors in clothing are also increasing, with Samsung debuting a new line of clothing at CES 2016, including a men's suit, belt, golf shirt and athletic wear.

"Clothing-based wearables will continue to grow. On the fitness side, companies like Athos will find a home with elite athletes and at gyms. OMSignal's fitness monitoring, already available in Ralph Lauren's Polo Tech shirt, will become more common. Smart workout clothing and undergarments will begin to gain market awareness by the end of 2016," Gownder said.

What to do with all that data

IoT machines are feeding live data into the enterprise, and giving the workforce access to that data in real time is essential. "Glasses are high performing way to do it. Bluetooth beaconing is an awesome idea but if you don't have a way for employees to engage in it you don't have the 'so what' factor. We look at wearables as the missing mate to IoT," Ballard said.

"One of our investors is General Electric. Look at the trends they're pushing with Predix [Cloud] being a massive industrial cloud solution with data flowing through. When you have a workforce that's engaged with those systems you can get real time operational systems that work," Ballard said.

Ledger said there is an issue with the massive amounts of data being collected.

"The industry is really struggling to figure out what to do with that data. If you are an athlete and you do training it's helpful to have a watch that does heartrate tracking. Athletes know how to use that information to determine their readiness to train and to help measure exertion levels during workouts. The average consumer who has a Fitbit has no idea what that information can be used for. And there isn't contextual information to help them," Ledger said.

The vast amount of data being collected means that privacy and security measures will also need to be in place to protect consumers and the enterprise from malicious threats.

Sam Rehman, CEO of Arxan Technologies, said, "We can expect to see a much more meaningful advancement in the rigor of security requirements laid down by the regulators in 2016. This is partly due to accelerated advancements in public-private threat intel-sharing, and the regulators' acknowledgement of the need to seek out cutting-edge threat data and security best practices from the organizations that are on the front lines of defending against them. For example, in IoT, the FDA is making significant improvements in beefing up minimum security requirements for medical devices including wearables, which could otherwise pose grave safety risks to people, care providers, and medical device manufacturers that depend on their trusted operation. Since the vertical markets are so intimately interconnected, we will also see more teeth behind enforcement of security requirements."

Despite the range of opinions on the future of wearables, one thing is for sure. There will definitely be change in 2016 as the industry evolves and matures and both the enterprise and consumers figure out how wearables will fit into their worlds.

See also:

The dark side of wearables: How they're secretly jeopardizing your security and privacy

Survey: Harnessing the power of IoT and big data

Infographic: BYOD increases work, but not spending, for IT

Hands on at CES 2016 with the consumer Oculus Rift and Touch controllers

About

Teena Maddox is a Senior Editor at TechRepublic. She's an award-winning journalist and specializes in business and lifestyle features. She has also worked at People magazine, W magazine and Women's Wear Daily.

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