Wearables & the Connected Home: Plotting a Route to Sustainable Growth in the Middle East & Africa
While technology continues to seep deeper into our daily routines, questions continue to be asked over the long-term viability of the wearables market in its current guise.
The market is currently flooded with various different form factors and styles from multiple vendors, with the latest figures from International Data Corporation (IDC) showing that shipments of wearables in the Middle East and Africa (MEA) grew 52.2% year on year in 2016 to reach a total of 2.34 million units.
This was primarily driven by the strong performance of low-cost basic wearables (i.e., devices that do not support third-party applications), which grew 67.9%. The growth for smart wearable devices (i.e., devices that do support third-party applications) was not quite as spectacular, with shipments up 20.7%.
While it's undoubtedly true that consumers have plenty of options to choose from in the wearables space, including wristbands, watches, clothing, headphones, and eyewear, there is very little differentiation between the various products or brands in terms of actual functionality.
Health and fitness represents the core functionally for the majority of wearables currently available on the market, and this is an area where smart and basic wearables perform equally well. And it is this reality that explains the huge difference in growth rates between the two segments.
Indeed, with basic wearables already perfectly capable of tracking parameters like heart rate, temperature, distance traveled, sleep patterns, and so on, what motivation is there for users to invest the additional funds required to purchase a smart wearable device?
At IDC, we expect the MEA wearables market to grow 24.1% year on year in 2017 to reach a total of 2.9 million units. And looking further ahead, we are forecasting the market to expand at a compound annual growth rate (CAGR) of 11.3% over the 2016–2021 period.
Clearly, then, the market's growth is slowing down. So, what next for a space that was once expected to be a frontrunner in spurring the growth of consumer devices, but now appears to be rapidly running out of ideas?
The first port of call is for wearables vendors to differentiate their products from smartphones and create a compelling need for wearables within the broader ecosystem of gadgets. Without this differentiation, wearables will stagnate and be viewed as little more than fashion accessories for your smartphone.
It is imperative that vendors come up with innovative solutions that move beyond health and fitness to enable consumers to perform day-to-day tasks in an easier way. And third-party apps will play a critical role in facilitating more complex functionalities.
Such apps are clearly underutilized in the current scenario, a factor that is limiting the growth of smart wearables, so vendors need to build a conducive environment for app developers to flourish. They should also look to enable all these devices to interact with each other and freely exchange information.
Imagine a day when your alarm goes off 15 minutes early as it has sensed heavy traffic on your route to work. As you wake up, your lights, music player, coffee machine, and shower are all turned on automatically. Your wearable, which has been analyzing your sleep pattern all night, is communicating with other devices in your home to make your day-to-day life more efficient.
This wearable is freely interacting with other gadgets and sharing information that is in turn triggering the activities of other devices. And the critical point here is that there is no human interference; the gadgets are doing this all by themselves.
As you can see, wearables have the potential to form an integral part of the future connected home, but only if vendors approach it in the right way. With so many different gadgets available on the market, there has to be a push for a common language that all these devices can use to communicate freely with each other. Because without this collaboration across the industry, the whole idea of the connected home starts to make a lot less sense.
Currently, users find themselves being locked into one particular framework, with the various choices including Apple's HomeKit, Samsung's SmartThings, Android's Things, and Amazon's Alexa, among others. The different devices that make up these ecosystems do not necessarily work with each other, which just makes life more difficult for consumers.
If we continue along this path, there is a very good chance that your smart light bulb won't be able to communicate with your smart door; and at this point, the whole selling point of the connected home collapses. It brings back memories of when each mobile phone manufacturer insisted on using a unique charger for their devices, and in that case, it took a long time for the industry to reach a standard framework.
With the rate growth for wearables slated to slow significantly over the coming years, vendors must find a new approach if they are to spur sustained interest from an already-skeptical consumer base. The growth of wearables and the connected home will go hand in hand, so it's imperative that stakeholders on all sides establish a common framework that will facilitate the long-term growth of these technologies.