Smartwatch adoption: don’t end up as a laggard

Smartwatch adoption: don’t end up as a laggard
Timex-DataLink_04LLet me present you my first smart watch: Timex Datalink. My mom gave me this as a present when I was 23, back in 1995 (Oh my, I just gave out my age!). For those that haven’t seen one of these, it was the first watch capable of downloading information from a computer. Co-developed by Timex and Microsoft it was capable of data transferring from outlook calendar and tasks, No email, no voice unfortunately. It didn’t look very different than any other digital watches from that time (did I mention they were water resistant?), but they were unique because they could synchronise wirelessly through light (using the monitor screen) with the computer and data was transferred from the computer to the watch quickly and easily. It seemed revolutionary those days. Nevertheless, it was a complete failure (do you see them somewhere today?) While the concept was fine, they were too ahead in time so the functionality was very limited, and there was no integration with mobile devices and apps (they didn’t exist!). So when everyone started talking about smart watches (again) I remembered my old Timex Datalink. I don’t use watches anymore (smart watch or not), but back then I did. So this triggered my curiosity as what are the chances for smart watches to succeed. I decided to run a small poll between my friends and asked:
  1. Would you use a smart watch?
  2. Why?
  3. Under what circumstances would you consider using one?
This is what I discovered:
  • Some people (10%) don’t know what a smart watch is.
  • 10% said no, my smartphone provides me all I need plus if smart watches connect through Bluetooth they make batteries die fast. They would only consider using a smart watch if it is free (as part of a smartphone purchase for example) and technology improves (and battery life becomes a non-issue).
  • 40% said they don’t use watches today so why start using it now? They recognize that it needs to have a compelling advantage over the other devices we use today (mobile, tablet, laptop, etc.). If it is about health monitoring there are a plenty of devices in the format of wristbands that they would use instead. Video streaming would be another good reason to adopt it.
  • 10% answered that a watch is something related to fashion (and in some cases luxury) so unless an established well recognized fashion/luxury watch maker brand enters into the segment and makes them attractive, there is no way they would use it. Clearly this segment of consumers wouldn’t buy it from Apple, even if they come in gold and with diamonds, but they would buy it from Rolex for example. The good news for them is that Rolex is launching one.
  • 10% said they would use it out of curiosity (this reminds me myself back then with the Timex Datalink smart watch). If smart watches provide much more functionality and convenience than they did before, there is a chance that this segment may continue to use them after the “trial” period.
  • 20% said definitely they would use a smart watch. Even more, they believe that it will become an accessory required for many daily tasks and interaction with business as in health for example. If you get a discount in health insurance (or life insurance) associated to a healthy lifestyle, a smart watch seems an ideal device to combine the monitoring capacity with other daily activities as talking and mailing. For those that today carry a watch it will be a seamless experience compared to when we moved from landlines to mobiles. Insurers moving into the use of wearables, including smartphones, to monitor lifestyle and provide benefits associated to it, will encourage adoption by people in this segment.
Some conclusions around this small and targeted survey are that smart watches don’t escape to the same logic of any other product market introduction. There are clearly some early adopters (30%) but with risk of some dropping out if the product does not convince (those that would use it out of curiosity). Pragmatists, that would only use it if provides a clear advantage (40%). Some of these will fall into laggards (or not adopt it) if they don’t see a real benefit. Conservatives, more reluctant to change as they perceive watches to have a different meaning (and use) than smart watches. Finally, laggards that will see how everything evolvers before jumping in (20%). Bell curve We need to see what happens with wearables in general, as there may be other devices and interfaces better than a watch? In my opinion there is still a long way to go before having all the ducks in a row, but no doubt that if linked to real benefits such as savings and convenience the chances of smart watches to succeed increases. Insurers, if not doing it yet, should be considering smart watches and wearables in general as part of its products and its customer experience. Don’t wait to see who the winner is in the wearables segment of the IoT, or you may end on team laggard.
About Juan Mazzini

Senior analyst focused on expanding Celent's coverage of IT and business strategy issues to Latin America. I've been working +20 years in the insurance and banking IT industries.

My research and consulting focuses on: Life and P&C insurance IT related issues, core banking, FinTech, digital, innovation, IT and business strategy, and systems selection.

My recent consulting work includes: vendor and system selection advisory for financial institutions in Argentina, Bolivia, Brazil, Chile, Colombia, Mexico, and Peru; assessing market demand for core systems and emerging technologies in Latin America, and providing go-to-market advisory to vendors, systems integrators and consultancy firms.

I am frequent speaker at industry events, contributor to many conferences, and evaluator for technology competitions such as BBVA Open Talent and Finnosummit Challenge.

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