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Wearables: Their Time Has Come Norm Rose June 2015 ANALYSIS Wearables: Their Time Has Come Norm Rose June 2015 This article explores the evolution of the wearables segment, with a focus on applications for the travel industry and barriers to adoption. This content is published by Phocuswright Inc., a wholly owned subsidiary of Northstar Travel Media, LLC.The information herein is derived from a variety of sources. While every effort has been made to verify the information, the publisher assumes neither responsibility for inconsistencies or inaccuracies in the data nor liability for any damages of any type arising from errors or omissions. All Phocuswright publications are protected by copyright. It is illegal under U.S. federal law (17USC101 et seq.) to copy, fax or electronically distribute copyrighted material beyond the parameters of the License or outside of your organization without explicit permission. © 2015 Phocuswright, Inc All Rights Reserved. Wearables: Their Time Has Come June 2015 About Phocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright fosters smart strategic planning, tactical decision­making and organizational effectiveness. Phocuswright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives,marketers, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage. To complement its primary research in North and Latin America, Europe and Asia, Phocuswright produces several high­profile conferences in the United States and Europe, and partners with conferences in China and Singapore. Industry leaders and company analysts bring this intelligence to life by debating issues, sharing ideas and defining the ever­evolving reality of travel commerce. The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents. Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC. © 2015 Phocuswright Inc. All Rights Reserved. 2 Wearables: Their Time Has Come June 2015 Table of Contents Introduction 5 What constitutes a wearable? 5 The failure of Google Glass 5 Apple Watch a watershed moment for wearables? 5 Wearables in the travel industry: why the connection? 6 Examples of wearables for travel 6 The wearable wallet, ID, boarding pass and room key 8 Barriers to wearable adoption 8 The future of wearables – virtual computers? 8 Summary – the wearable future 9 Endnotes 10 © 2015 Phocuswright Inc. All Rights Reserved. 3 Wearables: Their Time Has Come June 2015 Figures and Charts Fig. 1: Examples of Wearables for Travel 7 Fig. 2: The Cicret Bracelet 9 © 2015 Phocuswright Inc. All Rights Reserved. 4 Wearables: Their Time Has Come June 2015 Introduction By 2019, 148 million units of wearable computer devices will be shipped.1 Wearables include fitness bands that track your body's physical well­being, glasses that provide augmented reality, watches that issue alerts and provide seamless payment capabilities, and even small thumbnail covers that allow you to control electronic devices remotely. A clear emerging leader in the wearables category is the new Apple Watch; global pre­orders hit 2.3 million before it even appeared in stores on April 25, 2015.2 Many travel companies and services ­ including airlines, hotels, trip itinerary managers and flight alerts ­ have already created Apple Watch apps. Clearly wearables have moved from hype to reality, but is the travel industry actually ahead of consumers' adoption of wearables? Why is there such a strong connection between wearables and travel? How will wearables impact the travel experience in the near term and in the future? What constitutes a wearable? As the name implies, wearables are computer devices that sit on top of your body, your child's body or even your pet's collar. Wearables include anything from a piece of clothing, jewelry, glasses and wrist watches and bands, to small devices that seamlessly attach to your skin or fingernail. A wearable acts as a computerized extension of your body that augments your body's natural abilities through digital technology. The overall wearables trend reflects the emergence of smaller devices with dedicated functions that act seamlessly with your body and the physical world. Many view the calculator watch, introduced in 1975, as the first mass market wearable computer device. The calculator watch had limited success other than with science geeks and math nerds.3 More recently, from 2008­2014, wearables became more mainstream, with the introduction of fitness trackers led by companies such as Pebble, Jawbone, Fitbit and Garmin. The failure of Google Glass Not all wearable launches have been successful. The obvious example of a market disappointment is Google Glass, which was introduced in 2012. Google Glass is a computer that is built into in a pair of glasses and allows Internet searches, photos, videos and augmented reality. Google recently pulled the product from the market, as mass adoption was lacking and there were significant privacy concerns. One of the main criticisms of Google Glass concerned the issue of privacy, as the wearer could record video of anyone without their knowledge or permission. Google Glass even brought a new term into the popular vernacular, when some wearers were labeled "glassholes," due to their obnoxious behavior while wearing the device. Despite an overall lack of consumer acceptance, some sectors of the travel industry embraced Google Glass. A trial with Virgin Atlantic Airways demonstrated how Google Glass could enhance the customer service experience by driving more personalized passenger interaction. Google Glass may be off the market for now, but internal sources indicate it is not dead. The Google Glass team now reports to Tony Fadell, chief executive of the home automation business Nest, which Google in 2014.4 Google Glass is likely to reappear as a fashion accessory in the not­too­distant­future. Apple Watch a watershed moment for wearables? The biggest wearables announcement came late last year with the introduction of the Apple Watch. As with the smartphone, Apple is not the first to make a smartwatch, but many believe the company will redefine the category. Airlines have rushed to ready their Apple Watch apps; American, Alaska Airlines, Air Canada, British Airways, Delta, EasyJet, Emirates, JetBlue, Japan Airlines, Qantas, United and WestJet are among the carriers that have or will shortly update their apps for compatibility with the Apple Watch. In addition to airlines, Apple Watch apps have been released by Booking.com, Expedia, FlightStats, TripIt, TripCase and Marriott, to name just a few. The Apple Watch currently relies on the iPhone for connectivity, so today it acts as an extension of the smartphone. The ultimate positioning of the Apple Watch within the smart device ecosystem has not been fully defined. But it appears the watch primarily acts as a messaging and navigation platform, alerting the user to emails, phone messages, texts, social media updates and, in the case of travel, itinerary elements and directions. The Apple Watch is truly a first­generation Apple © 2015 Phocuswright Inc. All Rights Reserved. 5 Wearables: Their Time Has Come June 2015 product, so some bugs have appeared with the release. The device's "taptic engine," which enables the watch to give the user the feeling of being tapped or buzzed on the wrist, was found to be faulty, causing shipment delays.5 An even more inherent problem with the Apple Watch is the lack of usability for the primary function of telling time. The watch requires a somewhat artificial flick of the wrist when it is sleep mode in order to display the time ­ not a very subtle move when checking the time during a business meeting.6 Despite these shortcomings, the Apple Watch is clearly a game changer for the wearables industry. As the product matures and competitive offerings from Google and others emerge, we are seeing a shift from having to pull out your smartphone to check messages or navigate unfamiliar places, to simply using your watch for this and other purposes. In this way, the role of the smartphone is changing. The smartphone continues to act as the hub for the wearable device ecosystem. But as next­ generation smartwatches that do not depend on the smartphone emerge, the watch for many will take its place for simple functions around messaging, social media, navigation and communication. Wearables in the travel industry: why the connection? Most would agree that we are at a very early stage in the wearables revolution. Why then have travel companies lined up with wearable apps, particular for the Apple Watch? The strong connection between wearables and the travel industry is based on the constraints naturally imposed on travelers. During transit we are often juggling luggage or food, and moving quickly to catch a flight, check­in to a hotel, grab a cab or attend a meeting. Travelers are naturally on the move. The hands­free promise of wearable computers provides a logical benefit to the traveler. In addition, with the continued growth of the Internet of Things (IoT) and the increased number of messages that will be micro­targeted toward travelers, the wearable computer becomes a more manageable communications device. Messages about local activities and restaurants, special offers from area merchants and insight into a destination's culture, history and architecture can all be transmitted via IoT devices such as beacons. The wearable device can act as a quick notification platform for receiving these types of messages, provided the information can be filtered based on personal preferences. No one wants a world of wearable spam. Examples of wearables for travel Figure 1 illustrates just some of the many ways in which wearables may be used throughout the travel process.
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