Smart Watch Usage in 2020

DEGREE PROJECT IN MEDIA TECHNOLOGY 300 CREDITS, SECOND CYCLE STOCKHOLM, SWEDEN 2016 Smart Watch Usage in 2020 A STUDY OF USAGE BEHAVIOURS AND THE DEV...
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DEGREE PROJECT IN MEDIA TECHNOLOGY 300 CREDITS, SECOND CYCLE STOCKHOLM, SWEDEN 2016

Smart Watch Usage in 2020 A STUDY OF USAGE BEHAVIOURS AND THE DEVELOPMENT OF THE MARKET FOR SMART WATCHES CECILIA ENGELBERT

KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF COMPUTER SCIENCE AND COMMUNICATION

Smart Watch Usage in 2020 - A study of usage behaviours and the development of the market for smart watches

Användning av Smarta Klockor 2020 - En studie om användarbeteenden och utvecklingen av marknaden för smarta klockor

CECILIA ENGELBERT [email protected]

Master’s Thesis in Media Technology School of Computer Science and Communication (CSC) Royal Institute of Technology, Stockholm Supervisor: Christopher Rosenqvist Examiner: Haibo Li Work commissioned by: Nepa Date of submission: 2016-02-01

Abstract The$technology$development$during$the$last$few$years$have$led$to$increased$use$of$wearable$ technology$devices.$Studies$show$a$growing$interest$for$the$smart$watch$functionality$and$ projections$are$that$wearable$devices$will$become$mainstream$during$the$next$years.$This$imply$ that$the$smart$watch$functionality$will$most$likely$have$an$impact$on$both$companies$and$ consumers,$since$new$technologies$and$devices$can$affect$and$change$current$consumer$ behaviours.$Exactly$how$smart$watches$will$affect$consumer$usage$behaviours$is$still$an$ uncertainty$since$the$technology$is$relatively$new,$and$this$study$aims$to$research$this$area$in$ order$to$predict$how$the$market$for$smart$watches$will$appear$in$2020.$$ A$literature$study$was$conducted$to$provide$a$theoretical$basis$for$the$thesis,$including$a$ description$of$the$current$smart$watch$market$and$models$on$consumer$acceptance$related$to$ technology.$A$qualitative$study$in$form$of$expert$interviews$was$conducted$with$the$aim$to$gain$ insights$regarding$trends$and$development$factors$influencing$the$market.$The$study$identifies$ personal$identity,$monitoring$and$comfort$as$the$three$main$motivations$to$why$consumers$use$ smart$watches.$The$three$main$situations$are$using$smart$watches$as$extensions$of$the$smart$ phone,$in$health$purposes$and$for$personal$advantages.$Technology$and$consumer$behaviour$ related$trends$are$also$identified,$as$well$as$a$series$of$challenges$for$future$market$development.$$ The$main$conclusions$from$this$research$are$that$the$value$proposition$of$smart$watches$lies$ within$sensor$performance$and$that$smart$watches$will$be$used$primarily$for$monitoring$and$ professional$use.$The$development$pace$of$the$market$is$also$affected$by$social$norms$and$ consumer$habits,$and$in$order$for$smart$watches$to$become$mainstream,$a$functioning$ecosystem$ consisting$of$network$operators,$device$manufacturers$and$application$developers$is$needed.$$ $

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Sammanfattning De$senaste$årens$teknikutveckling$har$inneburit$ökad$användning$av$bärbar$teknik.$Studier$visar$ ett$ökat$intresse$för$smarta$klockors$funktionalitet$och$prognoser$förutspår$att$bärbara$enheter$ kommer$att$bli$allt$mer$vanliga$de$kommande$åren.$Det$betyder$att$smarta$klockors$ funktionalitet$troligen$kommer$att$ha$en$inverkan$på$både$företag$och$konsumenter$eftersom$ nya$tekniker$och$enheter$kan$påverka$och$förändra$nuvarande$konsumentbeteenden.$Exakt$hur$ smarta$klockor$kommer$påverka$konsumenters$användarbeteenden$är$ännu$inte$klargjort$ eftersom$tekniken$är$relativt$ny.$Därför$är$syftet$med$denna$studie$att$undersöka$det$här$ området$för$att$kunna$förutspå$hur$marknaden$för$smarta$klockor$kommer$att$se$ut$år$2020.$$ En$litteraturstudie$genomfördes$i$syfte$att$ge$en$teoretisk$bas$till$uppsatsen,$och$inkluderar$en$ beskrivning$av$den$nuvarande$marknaden$för$smarta$klockor$samt$modeller$angående$ konsumentacceptans$för$teknik.$En$kvalitativ$studie$i$form$av$expertintervjuer$genomfördes$för$ att$få$insikter$angående$trender$och$faktorer$som$påverkar$marknaden.$Studien$identifierar$ personlig$identitet,$övervakning$och$bekvämlighet$som$de$tre$huvudsakliga$motiven$till$varför$ konsumenter$använder$smarta$klockor.$De$tre$huvudsakliga$användningsområdena$är$att$ använda$smarta$klockor$som$en$förlängning$av$smarttelefoner,$i$hälsosyfte$och$för$personliga$ fördelar.$Trender$relaterade$till$teknik$och$konsumentbeteenden$är$också$identifierade,$liksom$ ett$antal$utmaningar$för$framtida$utveckling$av$marknaden.$$ De$huvudsakliga$slutsatserna$i$denna$studie$är$att$smarta$klockors$värdeproposition$är$ sensorernas$prestanda,$samt$att$smarta$klockor$kommer$användas$främst$för$övervakning$och$ professionell$användning.$Marknadens$utvecklingstakt$påverkas$också$av$sociala$normer$samt$ konsumenters$vanor,$och$för$att$smarta$klockor$ska$bli$vedertagna$att$använda$så$måste$det$ finnas$ett$fungerande$ekosystem$bestående$av$nätverksoperatörer,$produkttillverkare$och$ applikationsutvecklare.$$ $

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Acknowledgements This$master’s$thesis$was$conducted$during$the$autumn$of$2015,$and$I$am$proud$to$say$that$it$ represents$the$absolute$last$challenge$in$my$education.$I$could$not$have$done$it$alone,$and$I$ would$like$to$thank$everyone$who$helped$me$during$this$process.$$ A$large$thank$you$to$each$and$all$of$the$interviewees$who$dedicated$their$time$to$participate$and$ help$me$with$my$thesis$work.$Your$knowledge$has$been$of$great$value$and$this$thesis$would$not$ have$been$complete$without$your$insights.$ Dr.$Christopher$Rosenqvist$for$inspiration$to$find$a$subject$and$supervision$during$the$thesis.$$ Andreas$Nordfors$for$supervision$and$the$opportunity$to$perform$the$thesis$at$Nepa.$$$ Dr.$Haibo$Li,$examiner$of$the$degree$project.$$ I$would$also$like$to$thank$Jimmie$Paloranta$for$great$company,$interesting$discussions$during$the$ process$and$for$always$holding$on$to$the$three$o’clockT“fika”.$$ $ $ $ $ Cecilia$Engelbert$ $

$

1

INTRODUCTION

1

1.1

BACKGROUND

1

1.2

RESEARCH PROBLEM

1

1.3

PURPOSE AND OBJECTIVES

2

1.4

DELIMITATIONS

2

1.5

DEFINITIONS

2

1.6

ABOUT NEPA

2

2

THEORY

3

2.1

WEARABLE TECHNOLOGY

3

2.2

THE SMART WATCH

4

2.2.1 DEFINITION

4

2.2.2 HISTORY

5

2.3

6

CURRENT MARKET FOR SMART WATCHES

2.3.1 MARKET GROWTH TRENDS

6

2.3.2 FIELDS OF USE FOR A SMART WATCH

7

2.3.3 TECHNOLOGY CONSTRAINTS

9

3 3.1

METHODOLOGY LITERATURE REVIEW

11 11

3.1.1 PURPOSE OF SEARCH

11

3.1.2 SEARCH METHODS AND RESULTS

12

3.2

12

QUALITATIVE STUDY

3.2.1 DIFFERENT TYPE OF INTERVIEWS

12

3.2.2 PURPOSE OF EXPERT INTERVIEWS

13

3.2.3 METHODS USED TO CONDUCT AND ANALYSE THE INTERVIEW DATA

14

4

16

4.1

CONSUMERS AND TECHNOLOGY CONSUMER ACCEPTANCE

16

4.1.1 TAM/TAM2

16

4.1.2 UTAUT

18

4.2

19

5 5.1

ACCEPTANCE FOR SMART WATCHES RESULTS SMART WATCH USAGE

21 21

5.1.1 CONSUMER MOTIVATIONS

21

5.1.2 IDENTIFIED USAGE SITUATIONS

22

5.2

23

IDENTIFIED TRENDS

5.2.1 TECHNOLOGY TRENDS

24

5.2.2 CONSUMER BEHAVIOUR TRENDS

25

5.3

26

CHALLENGES FOR FUTURE DEVELOPMENT

5.3.1 TECHNOLOGICAL BARRIERS

27

5.3.2 CONSUMER ATTITUDES

27

5.3.3 SOCIETY ISSUES

28

5.4

30

6 6.1

SUMMARY OF RESULTS DISCUSSION GENERAL OBSERVATIONS

31 31

6.1.1 THE SMART WATCH IS A NEW DEVICE

31

6.1.2 FUTURE USAGE SITUATIONS

33

6.1.3 DEVELOPMENT VARIABLES

34

6.2

36

7

METHOD CRITICISM CONCLUSION

37

7.1

ANSWERING THE RESEARCH QUESTIONS

37

7.2

FUTURE RESEARCH

38

8

REFERENCES

39

9

APPENDICES

43

9.1 $ $ $ $ $ $

APPENDIX A: INTERVIEW QUESTIONS

43

$

1 Introduction This%chapter%gives%an%introduction%to%the%research%problem%explored%in%the%thesis.%It%includes%a% background,%research%problem%and%purpose,%delimitations,%some%definitions,%and%a%brief%description% of%the%company%Nepa,%for%which%the%research%is%carried%out.%%

1.1 Background Technology$is$an$everTevolving$area,$and$new$technologies$bring$new$devices$to$consumers.$ During$the$last$few$years,$one$of$the$trends$spotted$is$the$increased$usage$of,$and$interest$for,$ wearable$technology$devices.$They$are$worn$on$the$body$and$connected$to$the$Internet,$and$ examples$of$these$devices$are$smart$watches,$bracelets,$glasses$and$so$on.$Many$are$also$starting$ to$offer$biometric$measurements,$which$may$open$up$for$interesting$business$opportunities$in$ the$future.$As$of$now,$these$devices$are$more$common$within$the$health$and$fitness$industries$in$ form$of$activity$trackers$and$bracelets.$However,$studies$show$that$consumers$have$an$increased$ interest$in$the$smart$watch$functionality$and$projections$are$that$wearable$devices$will$become$ more$mainstream$during$the$coming$years$(Pew$Research$Center,$2014).$Sales$could$reach$148$ million$units$in$2019,$compared$to$the$33$million$units$sold$in$2014,$which$imply$an$enormous$ market$growth$(Barbera,$2015).$$ The$growing$interest$in$the$smart$watch$functionality$will$most$likely$have$an$impact$on$both$ companies$and$consumers,$since$new$technologies$and$devices$can$affect$and$change$current$ consumer$behaviours.$Mobile$devices,$including$smartphones$and$tablets,$are$proof$of$that$as$ they$rapidly$changed$consumer$usage$behaviours$and$created$new$needs$for$connectivity$and$ entertainment$consumption.$The$popularity$and$demand$for$mobile$devices$on$the$market,$led$to$ new$opportunities$and$challenges$for$whole$industries,$which$were$forced$to$adapt$their$ businesses$to$wishes$of$the$consumers.$$ Exactly$how$smart$watches$will$affect$consumer$usage$behaviours$within$a$few$years$is$still$ difficult$to$determine$since$the$technology$is$relatively$new$on$the$market.$This$study$aims$to$ research$this$area,$in$order$to$predict$how$the$market$for$smart$watches$will$appear$in$2020.$$

1.2 Research problem This$master’s$thesis$revolves$around$one$central$research$question,$which$together$with$three$ additional$subTquestions$will$be$analysed,$discussed$and$answered$in$this$thesis.$$ The$main$question$is:$$ •

How%will%the%market%for%smart%watches%appear%in%2020?% 1$

$ The$additional$subTquestions$are:$$ •

Which%are%the%main%drivers%for%consumers%using%smart%watches?%



What%trends%are%relevant%for%the%development%of%the%smart%watch%market?%



How%will%these%trends%affect%the%usage%behaviour%for%smart%watches%within%5%years?%%

1.3 Purpose and objectives The$purpose$of$this$thesis$is$to$examine$the$existing$and$future$market$for$the$smart$watch$and$ to$examine$consumer$behaviour$related$to$the$technology.$The$intention$is$to$identify$the$drivers$ and$motives$behind$the$usage$of$the$smart$watch$as$well$as$important$trends,$which$will$have$an$ impact$on$the$development$of$the$smart$watch$market.$The$study$also$aims$to$identify$any$ possible$barriers$that$can$affect$the$development$of$the$market$and$to$examine$what$ opportunities$and$challenges$this$might$imply$for$businesses$within$other$industries.$$

1.4 Delimitations The$aim$of$this$research$is$to$examine$the$market$for$one$specific$wearable$device:$the$smart$ watch.$Other$wearable$technology,$for$example$wristbands,$activity$trackers,$wearable$clothing,$ jewellery$and$glasses$will$not$be$taken$into$account$for$this$study,$not$is$it$a$comparative$study$ between$different$wearable$devices.$$

1.5 Definitions TERM%

EXPLANATION%

FoMO$ ICT$

Fear%of%Missing%Out% Information%and%Communications%Technology%

IoT$ TAM$

Internet%of%Things% Technology%Acceptance%Model%

UTAUT$ QS$

The%Unified%Theory%of%Acceptance%and%Use%of%Technology% Quantified%Self%

1.6 About Nepa Nepa$is$a$media$research$company$founded$in$2006$working$across$many$different$industries:$ retail,$media$and$entertainment,$brands$and$communication,$telecom,$and$fastTmoving$consumer$ goods$(FMCG).$They$use$technology$and$industry$expertise$to$develop$innovative$and$efficient$ research$solutions$that$go$beyond$insights$and$enable$action.$Nepa$combine$survey,$behavioural$ and$business$data$and$by$analysing$what$consumers$say$with$what$they$actually$do,$they$help$ their$customers$to$become$truly$customer$focused.$$ 2$

$

2 Theory This%chapter%will%provide%the%theory%needed%to%understand%the%thesis%work.%First%is%a%brief%overall% description%of%wearable%technology,%followed%by%a%presentation%of%the%wearable%device%chosen%for% this%research:%the%smart%watch.%The%current%market%for%the%smart%watch%is%also%described,%including% growth%trends,%fields%of%use%and%technology%constraints.%%

2.1 Wearable technology Steve$Mann$is$one$of$the$pioneers$in$the$area$of$wearable$computing,$and$he$describes$wearable$ technology$as$the$study$or$practice$of$inventing,$designing,$building,$or$using$miniature$bodyT borne$computational$and$sensory$devices$(Mann,$2013).$In$other$words,$wearable$technology$is$ a$category$of$technology$devices$that$can$be$worn$on$the$body$either$as$an$accessory$or$as$part$of$ material$used$in$clothing.$It$is$in$other$research$commonly$referred$to$as$fashionable$technology,$ wearable$devices$or$fashion$electronics.$There$are$many$different$types$of$wearable$technology,$ including$wearable$cameras,$smart$clothing,$wearable$application$platforms,$smart$glasses,$ health$and$happiness$wearable$devices,$activity$trackers,$3D$motion$sensors,$and$smart$watches$ (Nagtegaal,$Verzijl$and$Dervojeda,$2015).$A$few$examples$of$wearable$technology$sectors,$ applications$and$products$are$shown$in$Figure$1.$$

$ Figure%1.%Examples%of%wearable%technology%applications,%adapted%from%Nagtegaal,%Verzijl%and%Dervojeda%(2015).%%

Wearable$devices$can$be$classified$according$to$two$standards$(Jiang$et$al.,$2015).$The$first$ standard$is$based$on$the$product%form,$and$the$categories$are$as$following:$headUmounted,$bodyU dressed,$handUworn$or$footUworn%devices.$The$second$standard$is$based$on$the$product$function,$ 3$

$ with$the$following$categories:$healthy%living,$information%consulting$and$somatosensory%control.$ The$different$classification$standards$can$be$seen$in$Table$1$below.$$ Table%1.%Different%wearable%technology%classification%standards.%

STANDARD%

Product%form%

Product%function%

CATEGORY%

DEVICES%

HeadTmounted$

• •

Helmets% Glasses%

BodyTdressed$



Different%types%of%clothing%

HandTworn$

• • •

Watches% Bracelets% Gloves%

FootTworn$

• •

Shoes% Socks%

Healthy$living$

• •

Sport%wristbands% Smart%bracelets%

Information$consulting$

• •

Smart%glasses% Smart%watches%

Somatosensory$control$



Somatosensory%controller%

2.2 The smart watch 2.2.1 Definition For$a$product$to$be$classified$as$“smart”,$it$has$to$be$embedded$with$smart$components$such$as$ processors,$sensors,$software$and$connectivity$(Porter$and$Heppelmann,$2014).$These$ components$allow$for$data$to$be$transferred$between$the$product$and$its$environment,$user,$ other$products,$and$so$on.$When$looking$into$previous$research$on$smart$watches,$however,$ there$is$not$one$general$definition$of$what$a$smart$watch$is.$Different$studies$use$different$ definitions.$Two$similar$definitions$are$those$written$by$Edwards$(2013)$and$Smartwatch$Group$ (2013),$and$a$combination$of$these$two$is$used$in$this$research$to$define$a$smart$watch.$ The$definition$chosen$for$this$research$is$as$follows:$ “A%smart%watch%is%a%wristwatch%enhanced%with%functionality%of%a%personal%digital%assistant%device% and%can%be%programmed%to%execute%more%tasks%than%only%telling%time,%i.e.%it%can%be%defined%by%three% characteristics:%% 1. Worn%on%the%wrist% 2. Able%to%indicate%time% 3. Able%to%wirelessly%connect%to%the%Internet”% 4$

$ The$connection$to$the$Internet$can$be$accomplished$in$different$ways.$Even$though$the$smart$ watch$can$be$connected$directly$to$the$Internet$via$integrated$mobile$phone$technology,$so$called$ “standalone”$smart$watches,$the$most$common$way$for$connectivity$is$via$Bluetooth$to$a$ smartphone.$This$means$smart$watches$are$more$or$less$dependent$on$being$synchronised$to$a$ smartphone,$and$a$large$part$of$their$functionality$is$based$on$this$connection$to$the$smartphone.$ These$smart$watches,$connected$to$smartphones,$are$called$“companion”$smart$watches.$ (Smartwatch$Group$2013)

2.2.2 History Throughout$history,$the$role$of$watches$has$evolved$many$times.$The$earliest$wristwatches$were$ produced$in$the$16th$century$and$served$the$purpose$of$being$accessories$worn$mostly$by$ women.$During$the$19th$century$they$got$yet$another$purpose,$when$military$men$wore$them$as$ portable$time$telling$pieces$due$to$the$importance$of$synchronizing$manoeuvres$during$war.$ Later$on,$they$became$a$piece$of$jewellery$and$objects$of$selfTexpression.$The$role$has$now$been$ redefined$once$again$with$the$arrival$of$smart$watches.$(Kracheel,$Bronzi$and$Kezemi,$2014)$ The$concept$of$smart$watches,$or$at$least$to$strap$a$computer$onto$your$body,$is$not$as$new$as$it$ may$seem.$Already$during$the$middle$of$the$20th$century$there$were$plenty$of$examples$of$ wearable$technology$in$science$fiction$movies.$The$first$digital$watches$were$released$in$the$ 1970s$when$Pulsar$invented$and$introduced$the$calculator$watch.$(Rawassizadeh,$Price$and$ Petre,$2015;$Sethuram$and$Lakshmi,$2015)$This$type$of$watch$became$very$trendy$during$the$ 1980s.$At$that$time,$Casio$was$the$lead$manufacturer$as$their$watch$series$had$the$functionality$ of$a$calculator,$and$also$could$store$names,$appointments,$phone$numbers$and$addresses$ (Sethuram$and$Lakshmi,$2015).$The$trend$of$digital$watches$continued$during$the$1990s$and$ companies$kept$producing$watches$containing$many$different$technology$functions.$Examples$ are$the$IBM/Citizen$WatchPad$and$the$Fossil$wrist$PDA.$However,$around$that$time$the$ popularity$started$to$diminish,$due$to$expensive$and$technology$that$was$not$powerful$enough.$ (Rawassizadeh,$Price$and$Petre,$2015).$$

$ Figure%2.%From%left:%Pulsar%calculator%watch,%Casio%calculator%watch,%IBM/Citizen%WatchPad,%Fossil%Wrist%PDA.%

5$

$ When$the$new$millennium$arrived,$so$did$the$technology$shift$where$cell$phones$became$ smartphones,$and$with$them$came$new$wearable$headsets$and$Bluetooth$technologies$to$take$ the$devices$out$of$the$hands$of$the$consumers.$Trends$revolved$around$ways$to$augment$already$ existing$devices$and$the$wearable$devices$had$no$features$of$their$own.$Also,$companies$were$ unsure$about$introducing$new$gadgets,$or$rather$if$the$consumer$demand$would$support$the$ implied$cost.$(Barbera,$2015)$ It$was$not$until$2012$that$the$consumer$demand$for$gadgets,$such$as$smart$watches,$was$clearly$ declared$again.$Pebble$Technology$raised$more$than$10$million$dollars$with$their$extremely$ successful$crowdfunding$campaign,$and$they$exposed$both$the$need$and$want$for$a$smart$watch$ on$the$market.$$(Kracheel,$Bronzi$and$Kezemi,$2014;$Barbera,$2015).$Samsung,$Motorola$and$ Sony$soon$followed$in$Pebble’s$direction$and$at$the$2014$Consumer$Electronics$Show$in$Las$ Vegas,$the$wrist$revolution$was$declared$(Kracheel,$Bronzi$and$Kezemi,$2014).$$ Today$after$more$than$40$years$of$technological$development,$the$smart$watches$are$starting$to$ head$in$the$same$direction$as$mobile$phones$(Rawassizadeh,$Price$and$Petre,$2015).$They$are$ finally$becoming$a$commercial$product$that$many$technology$companies,$including$Google$and$ Apple,$show$a$large$interest$in$(Isacson,$2015).$$

2.3 Current market for smart watches 2.3.1 Market growth trends There$seem$to$be$no$hesitation$that$the$popularity$of,$and$demand$for,$wearable$technology$will$ continue$to$grow$during$the$next$years.$Several$studies$show$an$increased$shipment$rate$of$ wearable$devices$and$the$smart$watch$will$be$the$leading$product$category.$This$means$smart$ watches$will$take$an$increasingly$large$share$of$the$shipments.$(Danova,$2014;$IHS,$2012;$Jiang$et$ al.,$2015;$Nagtegaal,$Verzijl$and$Dervojeda,$2015)$$ According$to$Danova$(2014),$the$global$market$for$wearable$devices$will$grow$at$a$compound$ annual$rate$of$35$%$over$the$next$five$years.$With$33$million$units$shipped$in$2014,$this$means$ that$shipments$will$reach$148$million$units$in$2019.$The$shipments$for$the$smart$watch$alone$ will$grow$at$a$compound$annual$rate$of$41$%$over$the$next$five$years.$Since$the$smart$watch$ accounted$for$59$%$of$the$shipments$in$2014,$that$share$will$expand$to$just$over$70$%$of$all$ shipments$by$2019.$Figure$3$show$an$estimation$of$global$wearable$devices$shipment$rates$over$ the$next$few$years.$$

6$

$

$ Figure%3.%An%estimation%of%global%wearable%devices%shipment%rates%(Danova,%2014).%%

Over$the$past$years,$consumers$have$often$considered$wearable$devices$to$be$fun$novelties$and$ interesting$gadgets,$but$an$increasing$number$of$analysts$consider$that$the$technology$have$more$ disruptive$potential$than$that.$They$are$believed$to$change$existing$industries,$create$new$ markets$and$generate$new$jobs.$(Nagtegaal,$Verzijl$and$Dervojeda,$2015)$$

2.3.2 Fields of use for a smart watch Smart$watches$are$capable$of$telling$time$as$regular$watches,$but$due$to$the$possibility$to$ incorporate$advanced$technologies$such$as$different$sensors,$they$are$also$capable$of$doing$much$ more.$So$what$other$purposes$can$they$be$used$for?$Some$of$the$research$done$in$this$field$is$ presented$below.$$ Previous$research$shows$that$health$management$is$one$of$the$areas$where$smart$watches$show$ great$usefulness.$Several$smart$watch$applications$have$been$developed$and$evaluated$ successfully,$for$example$a$diabetes$diary$and$a$cardiopulmonary$resuscitation$(CPR)$monitor.$ The$diabetes$diary$allows$users$to$monitor$blood$glucose,$insulin$injections,$physical$activity$and$ dietary$information$and$has$proved$very$useful$for$people$with$diabetes$(Årsand$et$al.,$2015).$ The$CPR$application$is$able$to$monitor$the$frequency$and$depth$of$CPR$and$provide$interactive$ and$corrective$feedback,$and$the$application$has$showed$significant$improvement$in$participants’$ performance$when$doing$CPR$(Gruenerbl$et$al.,$2015).$

7$

$

$ Figure%4.%Input%functions%of%the%Diabetes%Diary%application%(Årsand%et%al.,%2015).%

$ Figure%5.%The%different%feedback%interfaces%in%the%CPR%monitor%application%(Gruenerbl%et%al.,%2015).%

Another$study$conducted$by$Lockman,$Fisher$and$Olson$(2011)$is$focused$on$epilepsy$and$the$ problem$of$unTwitnessed$seizures,$which$can$cause$injury$and$even$death.$The$conclusion$is$that$ smart$watches$equipped$with$motion/accelerometer$sensors$can$be$used$to$detect$tonicTclonic$ seizures,$and$should$allow$caretakers$of$people$with$tonicTclonic$seizures$to$be$alerted$when$a$ seizure$occurs.$$ Other$research$has$discussed$if$smart$watches$can$help$users$save$time$by$making$processes$ more$efficient$compared$to$those$on$a$smartphone,$because$according$to$a$news$article,$users$ check$their$smartphones$an$average$of$150$times$a$day$(Pradhan$and$Sujatmiko,$2014;$Spencer,$ 2013).$It$is$also$a$common$benefit$of$smart$watches$to$help$users$notice$incoming$calls,$messages$ and$other$notifications$more$frequently.$An$investigation$shows$that$a$wristTmounted$system$ was$significantly$faster$to$access$than$a$device$stored$in$a$pocket$or$mounted$on$the$hip$ (Ashbrook$et$al.,$2008).$$ As$this$chapter$shows,$the$smart$watch$is$promoted$as$being$capable$of$performing$many$ different$tasks.$However,$there$seem$to$be$two$key$advantages$to$the$smart$watch$in$comparison$ to$other$devices:$their$mount$location$and$the$continual$connection$to$the$skin$(Rawassizadeh,$ Price$and$Petre,$2015).$$

8$

$

2.3.3 Technology constraints The$position$on$the$wrist$is$clearly$shown$to$be$an$advantage$from$the$previous$chapter,$and$ growth$trends$show$increased$popularity$and$rising$sales.$However,$there$are$still$technology$ issues$that$need$solutions$before$the$smart$watch$can$become$a$mainstream$device.$Danova$ (2014)$means$that$smart$watches$must$become$standalone,$computing$devices$with$more$robust$ functionalities.$Rawassizadeh,$Price$and$Petre$(2015)$also$state$in$their$research$that$there$are$ mainly$two$complications$when$keeping$a$device$small$enough$to$wear$on$the$wrist:$the$small% screen%size,$and$the$limited%battery%capacity.$ Display size The$small$display$size$results$in$restricted$input$and$output$capabilities$as$well$as$limited$ opportunities$to$display$multimedia$such$as$videos$and$images.$For$instance,$fitting$a$keyboard$ on$a$smart$watch$screen$is$even$more$challenging,$not$to$say$impossible,$than$fitting$one$on$a$ smartphone,$which$is$why$many$studies$have$researched$alternative$methods$for$interacting$ with$a$smart$watch.$The$researched$methods$include$alternative$text$input$methods,$gesture$ interaction$and$extended$interaction$surfaces,$such$as$keyboards$on$wristbands$and$even$virtual$ buttons$on$the$skin$of$the$user$(Funk$et$al.,$2014;$Knibbe$et$al.,$2014;$Komninos$and$Dunlop,$ 2014;$Kracheel,$Bronzi$and$Kezemi,$2014;$Porzi$et$al.,$2013;$Xiao,$Laput$and$Harrison,$2014).$ Also,$screens$that$are$curved$around$the$wrist$have$been$discussed$as$an$option$to$address$the$ size$issue,$but$it$is$still$not$enough$for$keyboard$integration.$(Rawassizadeh,$Price$and$Petre,$ 2015)$

$ Figure%6.%Example%of%gesture%based%interaction%with%a%smart%watch%(Porzi%et%al.,%2013).%

$ Figure%7.%One%smart%watch%with%keyboard%on%the%wristband,%and%one%with%extended%interaction%surface%(Funk%et%al.,% 2014;%Knibbe%et%al.,%2014).%

9$

$ Battery The$small$hardware$leads$to$weaker$computing$capabilities$and$especially$limited$battery$ capacity$in$comparison$to$larger$devices,$and$most$smart$watches$today$only$last$for$a$few$days$ before$they$need$to$be$recharged$(Donelan,$2015;$Pradhan$and$Sujatmiko,$2014).$Some$ applications,$for$instance$GPS$systems,$are$also$more$power$requiring$than$other$and$localization$ services$try$to$overcome$this$problem$by$relying$on$a$combination$of$technologies$such$as$GSM,$ WiTFi,$and$GPS.$Another$way$of$overcoming$the$battery$capacity$problem$is$to$offload$power$ consuming$sensing$and$computing$operations$to$the$smartphone$and$to$use$the$smart$watch$ only$as$a$convenient$user$interface.$This$solution$is$commonly$used$for$companion$smart$ watches.$(Rawassizadeh,$Price$and$Petre,$2015)$ Other issues Even$though$battery$capacity$and$screen$size$are$the$most$important$technical$factors$that$will$ affect$the$future$development$of$the$smart$watch$market,$there$are$other$factors,$which$will$also$ have$an$impact.$Kracheel,$Bronzi$and$Kezemi$(2014)$discuss$the$breakthrough$of$the$smartphone$ as$not$only$dependent$on$smooth$interaction$with$the$device,$but$also$on$application$developers$ and$the$community$support.$They$claim$that$the$same$will$be$true$for$the$smart$watch,$i.e.$the$ whole$ecosystem$of$device$manufacturers,$application$developers$and$community$must$be$in$ place$for$the$smart$watch$to$unlock$its$full$potential.$$ $

(

10$

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3 Methodology The%methodology%for%this%thesis%consisted%of%two%parts,%a%literature%review%and%a%qualitative%study,% which%are%both%explained%in%this%chapter.%A%literature%review%was%conducted%to%provide%a%theoretical% basis%explaining%wearable%technology,%the%market%for%smart%watches%and%theories%on%consumer% acceptance%regarding%technology.%To%gain%deeper%knowledge%about%current%trends%and%factors% influencing%the%market%for%smart%watches,%interviews%were%conducted%with%industry%experts.%

3.1 Literature review A$comprehensive$literature$review$was$conducted$for$this$thesis.$The$search$was$divided$in$two$ parts,$which$will$be$explained$below.$$

3.1.1 Purpose of search The$first$part$was$focused$on$finding$literature$explaining$what$wearable$technology$is,$and$how$ the$current$smart$watch$market$appears.$The$purpose$of$this$was$to$provide$a$good$theoretical$ basis$for$the$thesis,$to$find$previous$research$that$was$relevant$for$this$topic$and$to$get$a$good$ overview$of$existing$knowledge$in$the$area.$The$keywords$used$for$this$part$of$the$literature$ review$are$found$in$Table$2,$and$the$findings$are$found$in$chapter$“2$Theory”.$$ Table%2.%Keywords%used%for%the%first%literature%search.%

• • • • • • • •

Acceptance% Applications% Challenges% Definition% Development% Devices% Everyday%uses% Gestures%

• • • • • • • •

Healthcare% History% Interaction% Internet%of%things% Market% Opportunities% Smart%clothes% Smart%watch%

• • • • • • • •

Smartphone% Trends% User%behaviour% User%needs% Wearable% Wearable%computing%system% Wearable%technology% WristUworn%

The$purpose$of$the$second$part$of$the$literature$review$was$to$study$consumer$acceptance$ regarding$different$technologies.$The$purpose$was$also$to$identify$different$consumer$ motivations$and$drivers$when$choosing$to$use$a$new,$and$preferably$wearable,$technology.$It$was$ based$on$previous$research$containing$theories$and$models$of$consumer$acceptance$related$to$ technology.$The$most$common$models$identified$in$this$part$are$presented$in$the$next$chapter,$“4$ Consumers$and$technology”,$and$the$identified$drivers$and$motivations$are$presented$in$chapter$ “5$Results”$together$with$the$results$from$the$qualitative$study.$$The$keywords$used$for$this$part$ of$the$literature$review$are$found$in$Table$3.$% 11$

$ Table%3.%Keywords%used%for%the%second%literature%search.%

• • • • • • •

Acceptance% Consumer%acceptance% Information%technology% New%technology% Smart%watch% Smart%products% TAM/TAM2!

• • • • • •

Technology% Technology%acceptance%model% Unified%Theory%of%Acceptance%and% Use%of%Technology% User%motives% UTAUT/UTAUT2% Wearable%

3.1.2 Search methods and results The$literature$review$was$first$characterised$by$a$wide$and$general$search$approach,$which$was$ narrowed$down$along$the$process$as$more$relevant$research$papers$were$identified.$The$ different$keywords$were$used$alone$or$in$combination$“and”/”or”.$Journals,$books$and$other$ published$works$in$the$search$results$were$first$evaluated$by$title$and$abstract,$and$if$they$ contained$relevant$information$for$the$area$researched,$they$were$saved$for$future$use.$To$keep$ the$research$structured,$the$relevant$results$were$sorted$into$different$categories.$Since$ wearable$technology$and$smart$watches$are$relatively$new$areas$of$research,$the$search$was$ stretched$to$also$include$news$articles$and$online$sources.$$ Different$databases$were$used$for$finding$literature,$including$KTHB$Primo,$Google$Scholar,$ Elsevier$Scopus$and$IEEE$Xplore$Digital$Library$as$well$as$the$Google$search$engine.$References$ from$relevant$literature$and$articles$were$also$used$to$further$extend$the$search.

(

3.2 Qualitative study The$second$part$of$the$study$was$a$qualitative$study$based$on$expert$interviews.$The$interviews$ were$conducted$with$representatives$from$companies$associated$with,$or$with$an$interest$for,$ the$wearable$technology.$$

3.2.1 Different type of interviews There$are$many$different$types$of$interviews$and$a$common$way$to$decide$which$type$to$use$is$ by$determining$the$amount$of$structure$desired.$Merriam$(2014)$describes$three$types$of$ interviews;$highly$structured,$semiTstructured$and$unstructured.$$ •

The$highly%structured%interview$type$is$described$as$an$oral$form$of$a$written$survey.$The$ format$is$commonly$used$when$gathering$for$example$common$socioTdemographic$data$ from$the$respondents.$$

12$

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SemiUstructured%interviews$have$a$less$structured$format$and$assume$that$individual$ respondents$define$the$world$in$unique$ways.$Such$an$interview$contains$more$flexibly$ worded$questions$and$allows$the$researcher$to$respond$to$the$situation$at$hand.$



Unstructured%interviews$are$described$as$essentially$exploratory$and$are$very$useful$ when$the$researcher$does$not$know$enough$about$a$phenomenon$to$ask$relevant$ questions.$This$type$is$often$used$in$the$early$stage$of$a$qualitative$study,$since$one$of$the$ goals$with$this$type$of$interview$is$to$learn$enough$about$a$situation$to$be$able$to$ formulate$questions$for$subsequent$interviews.$$

In$this$research,$the$conducted$interviews$were$semiTstructured.$The$interviews$contained$openT ended$questions$and$different$probes$were$used$to$gain$a$deeper$understanding$of$the$topics$ discussed.$Probes$are$defined$as$questions$that$the$researcher$ask$in$response$to$what$the$ interviewee$say,$and$according$to$Collis$and$Hussey$(2014),$the$data$analysis$state$begin$when$ using$probes$in$unstructured$or$semiTstructured$interviews.$The$probes$used$during$the$ interviews$are$listed$below.% Table%4.%A%list%of%probes%used%during%the%interviews.%

TYPE%OF%PROBE%

PROBE%

Clarity%

• •

Do%you%have%any%examples%of%this?% Can%you%explain%what%you%mean?%

Depth%



Can%you%give%a%more%detailed%explanation?%

Dimension%



Do%you%think%that%is%a%common%opinion?%

Significance%

• •

How%important%is%this%issue/factor?% What%issue/factor%is%the%most/least%important?%

3.2.2 Purpose of expert interviews To$gain$valuable$insights$regarding$important$trends$and$development$factors$influencing$the$ market$for$smart$watches,$interviews$were$conducted$with$industry$experts$rather$than$with$ consumers.$The$interviewees$currently$or$recently$worked$at$companies$within,$or$with$an$ interest$for,$the$smart$watch$market.$The$companies,$with$which$the$interviewees$were$ associated,$were$chosen$carefully$to$represent$different$positions$along$the$wearable$technology$ value$chain.$The$choice$of$interviewing$representatives$from$companies$with$wide$spread$ positions$on$the$market$was$also$taken$to$examine$if$observations$of$the$smart$watch$market$ varied$depending$on$the$different$market$positions.$$

13$

$

$ Figure%8.%Value%chain%for%wearable%technologies,%adapted%from%Nagtegaal,%Verzijl%and%Dervojeda%(2015).%

3.2.3 Methods used to conduct and analyse the interview data Preparation of the interviews Before$conducting$the$interviews,$several$questions$were$defined$with$the$aim$of$covering$the$ interviewees’$opinion$on$past,$current,$and$future$development$within$the$smart$watch$market.$ The$questions$were$sent$to$the$participants$in$advance$in$order$for$them$to$understand$the$aim$ of$the$interview.$The$interview$questions$can$be$found$in$Appendix$A.$$ In$total,$six$interviews$were$conducted$and$the$operating$area$of$the$company,$the$position$of$the$ interviewee$and$the$interview$index$character$is$presented$in$Table$5.$All$interviews$were$ conducted$in$Swedish$and$the$results$and$quotes$have$been$translated$to$English$in$this$thesis.$$ Table%5.%A%list%of%the%expert%interviews%conducted.%

AREA%

POSITION%

INTERVIEW%

Product$solutions$

Product%Manager%

A$

Service$provider$

Business%Developer%

B$

Service$provider$

Software%Developer%

C$

Network$provider$

Networked%Society%Evangelist%

D$

Media$group$

Business%Developer%

E$

Media$measuring$company$

Founder%

F$

Analysis of data All$interviews$took$between$35T80$minutes$each$to$conduct.$The$audio$during$each$interview$ was$recorded,$and$the$interviews$were$transcribed$in$a$later$stage$for$easier$data$analysis.$The$ transcriptions$were$methodically$analysed$and$interesting$words,$notions$and$sentences$was$ highlighted$in$each$of$the$transcriptions,$in$order$to$identify$consumer$usage$situations$and$ trends.$The$highlights$were$then$compared$to$each$other$in$order$to$determine$what$usage$ situations$were$most$common,$and$which$trends$were$most$important.$The$data$from$the$ interviews$was$also$analysed$in$relation$to$the$consumer$technology$acceptance$models$to$ identify$consumer$motivations$for$using$smart$watches.$ 14$

$ Scenario analysis The$data$from$the$interviews$was$also$discussed$with$inspiration$from$the$scenario$analysis$ method.$The$purpose$of$this$was$to$examine$how$consumer$usage$behaviours$might$have$ changed$within$the$next$five$years$and$what$that$might$imply$for$the$development$of$the$market.$ Grant$(2010)$describes$scenario$analysis$as:$ $“A%systematic%way%of%thinking%about%how%the%future%might%unfold%that%builds%on%what%we%know% about%current%trends%and%signals”.%$ This$analysis$is$presented$in$chapter$“6.1.2$Future$usage$situations”.$$ $

15$

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4 Consumers and technology As%mentioned%in%the%previous%chapter,%this%part%is%where%some%of%the%previous%research%on%consumer% acceptance%for%different%technologies%will%be%presented.%The%Technology%Acceptance%Model%(TAM)% and%the%Unified%Theory%of%Acceptance%and%Use%of%Technology%(UTAUT)%will%be%explained,%as%well%as% an%acceptance%model%for%smart%watches.%%

4.1 Consumer acceptance When$reading$previous$research$on$consumer$acceptance$regarding$technology,$there$are$in$ particular$two$models$that$are$frequently$used$and$referred$to:$the$Technology%Acceptance%Model$ (TAM/TAM2)$and$the$Unified%Theory%of%Acceptance%and%Use%of%Technology$(UTAUT/UTAUT2).$$ Mayer$et$al.$(2011)$developed,$based$on$the$UTAUT,$a$structural$model$of$technology$acceptance$ to$study$the$acceptance$of$smart$products$in$a$kitchen$environment.$Another$study$conducted$by$ Chen$and$Shih$(2014),$researched$the$key$factors$influencing$usage$intention$and$usage$ behaviour$of$wearable$technology.$They$applied$UTAUT$to$be$the$evaluating$model$of$ acceptance.$The$same$model$was$also$used$in$a$research$paper$investigating$the$factors$ associated$with$consumer$intentions$to$adopt$wearable$technology$in$healthcare,$where$it$was$ part$of$an$acceptance$model$consisting$of$several$integrated$models$and$theories$(Gao,$Li$and$ Luo,$2015).$Other$research$papers$have$also$proposed$new$models$based$on$TAM$and$other$ theories$to$gain$a$better$understanding$of$technology$acceptance$for$different$purposes$(Yi$et$al.,$ 2006;$Kulviwat$et$al.,$2007).$$ To$gain$a$deeper$understanding$of$TAM,$UTAUT$and$factors$influencing$consumer$acceptance$ regarding$technology,$both$of$the$models$are$presented$in$one$section$each$in$this$chapter.$$

4.1.1 TAM/TAM2 The$technology$acceptance$model$was$first$introduced$in$1985$and$suggests$that$when$users$are$ presented$with$a$new$technology,$a$number$of$factors$influence$their$decision$on$how$and$when$ they$will$use$it.$The$model$was$developed$with$two$major$objectives$in$mind.$$ 1) It$should$improve$the$understanding$of$user$acceptance$processed,$and$provide$new$ theoretical$insights$into$the$successful$design$and$implementation$of$information$ systems.$$ 2) It$should$provide$the$theoretical$basis$for$a$“user$acceptance$testing”$methodology$to$ help$evaluate$proposed$new$systems.$$

16$

$ The$model$in$its$original$form$includes$the$following$constructs:$perceived$usefulness,$perceived$ ease$of$use,$attitude$towards$using,$and$actual$use.$The$perceived$usefulness$and$perceived$ease$ of$use$will$affect$the$attitude$towards$using$the$technology,$which$in$turn$will$affect$if$the$ consumer$actually$will$use$the$system.$The$model$is$shown$in$Figure$9,$where$the$arrows$ represent$casual$relationships.$(Davis,$1986)$

$ Figure%9.%The%original%Technology%Acceptance%Model%(Davis,%1986).%%

Within$10$years$from$the$introduction,$the$model$became$established$as$robust$and$powerful$for$ predicting$user$acceptance.$Numerous$studies$found$that$TAM$consistently$explained$a$ significant$proportion$of$the$variance$in$usage$intention$and$behaviour.$Some$research$has$been$ done$to$model$the$determinants$of$perceived$ease$of$use,$but$according$to$Venkatesh$and$Davis$ (2000),$the$determinants$of$perceived$usefulness$were$rather$disregarded.$Hence,$they$proposed$ an$new$version$of$the$TAM.$$ The$goal$with$the$new$model,$TAM2,$was$to$include$additional$key$determinants$of$the$TAM’s$ perceived$usefulness$and$usage$intention$constructs,$and$to$understand$how$the$effects$of$these$ determinants$changed$with$increased$user$experience$over$time$with$the$target$system.$TAM2$ includes$two$additional$theoretical$constructs$to$better$understand$the$determinants$of$ perceived$usefulness,$and$they$are$listed$in$Table$6.$(Venkatesh$and$Davis,$2000)$ Table%6.%List%of%TAM2's%additional%constructs%and%their%determinants.%

CONSTRUCT% %

DETERMINANTS%

Social%influence%processes%

• • •

Subjective%norm% Voluntariness% Image%

Cognitive%instrumental%processes%

• • • •

Job%relevance% Output%quality% Result%demonstrability% Perceived%ease%of%use%

17$

$ The$first$construct$is$social$influence$processes,$i.e.$subjective$norm,$voluntariness$and$image.$ This$means$that$individuals$closely$related$to$the$consumers,$i.e.$friends$and$family,$can$affect$the$ perceived$usefulness$of$a$system.$The$second$construct$is$cognitive$instrumental$processes,$i.e.$ job$relevance,$output$quality,$result$demonstrability,$and$perceived$ease$of$use.$This$means$ consumers$will$be$affected$by$if$the$system$is$suitable$for$their$personal$and$professional$goals$ they$want$to$accomplish.$The$new$model,$TAM2,$is$shown$in$Figure$10.$

$ Figure%10.%TAM2,%an%extension%of%the%TAM%(Venkatesh%and%Davis,%2000).%%

4.1.2 UTAUT The$Unified$Theory$of$Acceptance$and$Use$of$Technology$model$was$first$proposed$in$2003$with$ the$aim$to$provide$a$useful$tool$for$measuring$the$likelihood$of$success$for$new$technology$ introductions.$The$researches$that$introduced$the$model$argued$that$Information$Technology$ acceptance$research$had$generated$many$competing$models,$each$with$a$different$set$of$ acceptance$determinants,$why$a$unified$model$was$needed$(Venkatesh$et$al.,$2003).$$ The$process$for$coming$up$with$this$model$included$4$steps:$$ 1) Reviewing$user$acceptance$literature$and$discussing$eight$prominent$models.$ 2) Empirically$comparing$the$models$and$their$extensions.$ 3) Formulating$a$unified$model$that$integrates$elements$across$all$eight$models.$ 4) Empirically$validating$the$unified$model.$$

18$

$

$ Figure%11.%UTAUT%(Venkatesh%et%al.,%2003).%

The$model$consists$of$four$constructs$that$play$significant$roles$as$direct$determinants$of$user$ acceptance$and$usage$behaviour:$$ •

Performance%expectancy:$the$degree$to$which$an$individual$believes$that$using$the$system$ will$help$him$or$her$to$attain$gains$in$job$performance.$



Effort%expectancy:$the$degree$of$ease$associated$with$the$use$of$the$system.$$



Social%influence:$the$degree$to$which$an$individual$perceives$that$important$others$ believe$he$or$she$should$use$a$new$system.$$$



Facilitating%conditions:$the$degree$to$which$an$individual$believes$that$an$organisational$ and$technical$infrastructure$exists$to$support$use$of$the$system.$

The$model$also$includes$four$key$moderators$that$moderate$some$or$all$of$the$constructs:$gender,$ age,$voluntariness$and$experience.$(Venkatesh$et$al.,$2003)$

4.2 Acceptance for smart watches The$area$of$researching$smart$watches$and$other$wearable$devices$is$relatively$new$ground,$why$ there$is$difficult$to$find$specific$and$commonly$used$acceptance$models$for$this$technology.$ However,$one$of$the$first$research$papers$in$this$field,$which$attempts$to$predict$usage$of$smart$ watches,$is$written$by$Kim$and$Shin$(2014).$The$findings$from$their$research,$including$their$ extended$technology$acceptance$model$suitable$to$measure$consumer$acceptance$for$smart$ watches,$are$presented$below.$$ 19$

$ The$key$psychological$quality$factors$for$smart$watches$are$the$following:$affective%quality,$ relative%advantage,$mobility,$availability$and$subcultural%appeal.$The$research$suggests$that$the$ affective$quality$and$the$relative$advantage$of$smart$watches$are$associated$with$the$perceived$ usefulness,$while$the$mobility$and$availability$of$smart$watches$are$associated$with$the$perceived$ ease$of$use.$The$research$also$suggests$that$the$devices’$subcultural$appeal$will$affect$which$ attitude$consumers$will$have$towards$the$technology,$and$that$the$cost$will$affect$the$intention$to$ use$it.$

$ Figure%12.%The%proposed%user%acceptance%model%for%smart%watches%(Kim%and%Shin,%2014).%

In$the$user$acceptance$model$for$smart$watches,$TAM$and$the$findings$from$the$paper$are$ integrated,$and$the$model’s$overall$explanatory$power$is$found$to$be$relatively$high:$80$%$of$the$ variance$in$user$attitude$and$81$%$in$intention$(Kim$and$Shin,$2014).$$ $

$

20$

$

5 Results Based%on%the%second%part%of%the%literature%study,%as%well%as%the%data%from%the%qualitative%study,%a%few% areas%have%been%identified%that%are%relevant%for%the%development%of%the%smart%watch%market.%The% results%are%presented%in%the%three%subchapters:%“Smart%watch%usage”,%“Identified%trends”,%and% “Challenges%for%future%development”.%%

5.1 Smart watch usage 5.1.1 Consumer motivations Consumer$motivations$are$based$on$needs$or$goals,$i.e.$they$are$based$on$the$desire$to$satisfy$a$ need$or$to$reach$a$goal.$It$is$the$desire$that$motivates$consumers$to$take$certain$choices.$To$ understand$the$consumer$motivations$for$using$smart$watches,$a$series$of$needs$have$been$ identified$from$the$expert$interviews$and$all$of$the$constructs$from$the$models$on$consumer$ acceptance.$The$models$measure$the$likelihood$of$consumers$accepting$and$using$a$technology$ system,$and$therefore$the$different$constructs$can$also$be$explained$as$drivers$when$consumers$ actually$accept$to$use$a$technology.$$

$ Figure%13.%Chart%of%identified%need%states%for%using%smart%watches.%

Personal identity This$is$the$need$for$personal$expression.$It$is$the$desire$to$feel$unique,$to$not$be$part$of$a$ mainstream$crowd,$and$it$can$also$be$the$underlying$need$when$consumers$choose$to$use$ technology$products$that$are$considered$premium$products$or$cool$gadgets.$It$can$also$be$the$ underlying$need$when$consumers$use$the$beta$versions$of$products,$which$is$commonly$seen$in$ the$target$group$called$“early$adopters”.$The$need$for$personal$identity$is$also$characterised$by$ the$wish$to$modify$the$appearance$of$the$different$parts$on$the$smart$watch.$$ 21$

$ Monitoring This$need$can$be$described$as$the$desire$of$being$well$informed.$It$is$the$wish$for$having$constant$ access$to$knowledge$and$other$information,$and$also$to$continuously$stay$connected$with$what$ others$are$doing.$It$is$related$to$FoMO,$i.e.$“Fear$of$Missing$Out”$and$is$often$characterised$by$ consumers$using$the$smart$watch$to$always$stay$up$to$date$on$what$is$happening$around$them.$ The$need$for$monitoring$is$also$about$the$consumers$being$in$control$of$their$lives.$It$can$be$ characterised$by$a$desire$to$measure$the$body$in$different$ways$to$stay$in$control$of$health$and$ body$related$issues.$ Comfort This$need$is$about$keeping$routines$and$habits$that$the$consumers$already$have,$as$well$as$to$ achieve$goals$with$minimal$effort.$The$consumers$appreciate$the$ergonomic$position$of$the$smart$ watch$and$that$the$transition$from$wearing$a$traditional$watch$to$wearing$a$smart$watch$is$ minimal.$The$need$for$comfort$is$also$characterised$by$the$perceived$usefulness$of$the$smart$ watch,$as$well$as$consumers$perceive$that$the$functionality$of$the$smart$watch$will$help$them$ reach$their$life$goals$easier.$$

5.1.2 Identified usage situations In$the$previous$subchapter,$the$research$on$consumer$acceptance$was$analysed$in$combination$ with$the$data$from$the$expert$interviews$and$resulted$in$three$distinct$consumer$motivations$ based$on$three$needs,$explaining$why$consumers$use$smart$watches.$By$analysing$the$needs$in$ relation$to$the$data$from$the$expert$interviews,$three$usage$situations$for$smart$watches$have$ been$identified.$The$identified$usage$situations$and$the$related$needs$are$found$in$Table$7.$They$ are$also$further$explained$below.$$ Table%7.%The%identified%usage%situations%and%related%needs.%

USAGE%SITUATIONS%

RELATED%NEEDS%

Extension%of%the%smartphone%

Monitoring,%comfort%

Health%purposes%

Monitoring,%comfort%

Personal%advantages%

Personal%identity,%monitoring,%comfort%

Extension of the smartphone Using$the$smart$watch$as$an$extension$of$the$smartphone$has$the$purpose$of$satisfying$the$ consumers$monitoring%and%comfort%needs.$Applications,$as$well$as$the$connection$to$the$Internet,$ are$transferred$from$the$smartphone$into$the$smart$watch$and$it$is$primary$used$to$be$informed$ of$what$is$happening$for$the$users$family,$friends,$network$and$the$outside$world.$Due$to$the$

22$

$ instant$and$continuous$notifications$from$the$smart$watch,$consumers$become$more$informed$ and$it$also$helps$reducing$the$consumers’$feeling$of$missing$out$on$things.$The$beneficial$position$ of$the$smart$watch$also$makes$accessing$it$quick$and$easy,$in$comparison$to$picking$up$the$ smartphone$from$wherever$it$is$contained.$It$is$therefore$very$time$effective$and$comfortable$to$ get$notifications$and$perform$simple$interactions$with$the$smart$watch,$and$it$is$very$useful$for$ this$purpose.$$ Health purposes This$usage$situation$is$also$connected$to$the$consumers$monitoring%and%comfort%needs.$The$ situation$is$characterised$by$consumers$achieving$personal$health$related$goals$by$using$smart$ watches$as$monitoring$assistants.$To$use$the$smart$watch$in$this$purpose$also$make$the$ consumers$feel$in$control$of$their$own$body$by$encouraging$exercise$and$in$the$long$term$ prevent$health$related$diseases.$The$smart$watch$has$builtTin$sensors$that$among$other$things$ can$measure$pulse$and$movement.$This$is$useful$in$health$applications,$which$consumers$use$to$ collect$data$and$statistics$over$when$and$how$they$exercise,$in$order$to$keep$track$of$their$health.$$$ Personal advantages This$is$perhaps$the$most$nonTspecific$usage$situation,$but$it$relates$to$all$of$the$aboveTmentioned$ needs:$personal%identity,$monitoring$and$comfort.$This$situation$is$about$when$smart$watches$ help$consumers$to$achieve$something$that$cannot$be$achieved$by$any$other$product.$It$is$about$ satisfying$consumers’$individual$values.$This$type$of$usage$situations,$which$were$mentioned$ during$the$interviews,$were$for$example$when$the$smart$watch$is$substituting$different$keys,$or$ when$it$is$used$only$as$a$fun$gadget$(Interview$B;$Interview$D).$During$one$of$the$interviews,$this$ situation$was$also$referred$to,$as$“It%is%the%little%things%that%emerge%when%testing%it%for%two%weeks,% and%then%realising%its%potential.%It%is%simply%the%personal%experience.”$(Interview$A).$$

5.2 Identified trends Based$on$the$expert$interviews,$a$few$trends$that$are$relevant$for$the$future$development$of$the$ smart$watch$market$have$been$identified.$The$trends$are$categorised$into$technology$and$ consumer$behaviour$trends$and$will$be$described$below.$To$create$a$better$overview$of$the$ identified$trends,$they$are$also$summarised$in$Table$8.$$ $

%

23$

$ Table%8.%Identified%trends.%

CATEGORY%

TREND%

Technology%trends%

• •

Technology%maturity% Sensor%development%

Consumer%behaviour%trends%

• •

Quantified%self%(QS)% Device%flexibility%

5.2.1 Technology trends Technology$is$shaping$the$smart$watch$market,$and$the$future$development$of$the$smart$watch$ market$is$depending$on$how$the$technology$will$evolve$the$coming$years.$Both$technology$and$ the$overall$digitalization$were$mentioned$in$all$the$interviews,$and$a$few$relevant$technology$ trends$will$be$explained$in$this$section.$$ Technology maturity One$trend$that$was$brought$up$in$almost$all$of$the$interviews$was$the$technology$maturity.$It$is$ the$result$of$technology$development$over$the$past$years.$It$has$lead$to$smaller$and$smaller$ hardware,$which$has$made$the$smart$watches$possible$in$the$first$place.$As$expressed$in$ interview$C,$“the%processors%are%much%more%powerful%and%the%technology%is%reduced%in%size”,$which$ would$not$have$been$possible$if$it$were$not$for$the$technology$maturity.$$ The$reduced$hardware$size$affects$consumer$attitudes$towards$smart$watches:$as$does$ connectivity.$As$more$devices$become$connected$in$the$era$of$Internet$of$Things,$the$consumer$ expectations$on$technology$standards$change$and$need$to$be$met,$and$when$the$electronic$ hardware$and$its$connection$becomes$invisible$for$the$rest$of$the$world,$the$technology$“becomes% more%sympathetic%and%the%consumers%become%less%disrupted%than%by%other%technology”$(Interview$ F).$$ This$trend$has$already$played$an$important$role$for$the$smart$watch$market,$and$it$is$believed$to$ continue$to$evolve$in$the$future.$Interviewee$B$mean$that$“we%only%wait%for%the%smart%watches%to% become%even%smarter”,$which$implies$that$the$technology$maturity$will$always$continue$to$evolve$ as$technology$development$proceeds.$$ Sensor development The$new$types$of$sensors$that$are$provided$along$smart$watches$are$a$large$part$of$why$they$ have$become$popular,$and$the$trend$of$more$advanced$sensors$in$the$future$was$frequently$ brought$up$during$the$interviews.$“The%market%for%sensors%will%become%very%large”,$according$to$ interview$A$and$interviewee$E$agrees$that$“sensors%are%logical”.$$ 24$

$ Even$though$all$agrees$that$the$sensors$would$be$the$important$part,$there$was$a$common$doubt$ whether$the$smart$watch$would$be$the$primary$device$in$the$future$or$not.$Interviewee$F$asked$ “Is%the%smart%watch%‘the%thing’,%or%is%it%the%trend%to%put%something%onto%your%body%that%measures% your%performance,%health,%and%so%on?”$and$meant$that$it$is$the$sensors$that$will$make$the$big$ difference.$It$was$also$mentioned$that$in$the$future$“the%smart%watch%will%be%able%to%analyse%the% pulse,%but%also%blood%pressure,%blood%oxygen,%and%sugar%level”,$meaning$that$sensors$that$enable$ these$types$of$measurements$“will%be%the%next%big%thing%for%wearable%technology”$(Interview$A).$$ This$trend$was$also$brought$up$related$to$health$issues,$where$sensors$are$believed$to$play$an$ important$role$in$the$future.$“There%are%sensors%that%could%really%make%a%difference,%especially%for% people%with%diseases%they%have%to%live%with”$(Interview$D).$$

5.2.2 Consumer behaviour trends Quantified self (QS) As$a$result$of$the$sensor$development,$the$possibilities$for$new$body$measurements$have$ increased,$which$have$led$to$this$rise$of$this$trend.$Quantified$Self$(QS)$is$about$tracking$the$ body,$which$according$to$all$of$the$conducted$interviews$is$an$important$part$for$the$future$smart$ watch$market.$The$sensors$that$are$incorporated$in$the$smart$watch,$among$other$devices,$are$ enabling$this$trend$and$one$interviewee$mentioned$that$“with%a%watch%or%other%wearable%devices,% you%will%be%able%to%measure%how%you%really%feel%and%you%could%analyse%your%life%all%by%yourself”$ (Interview$F).$$ The$big$difference$however,$between$the$development$of$the$smart$watch$market$and$the$ smartphone$market$is$that$the$consumers$no$longer$have$a$need$for$communication,$since$that$ need$is$already$satisfied$by$other$devices$such$as$the$smartphone.$“We%are%done%with% communication.%Now,%it%is%about%you%and%to%measure%your%body%in%different%ways”$(Interview$C).$$ As$mentioned$in$chapter$“5.1.2$Identified$usage$situations”,$using$the$smart$watch$for$health$ purposes$is$one$of$the$most$common$usage$situations,$and$this$trend$reflects$that$this$will$ continue$to$be$important$for$consumers$in$the$future.$“People%want%an%activity%encourager%that% makes%them%exercise%and%eat%healthier”$says$interviewee$E,$and$interviewee$F$agrees$“that%is%the% large%market%for%smart%watches”,$which$sympathises$the$significance$of$this$trend$and$its$impact$ on$the$future$market.$$ Device flexibility A$common$opinion$during$the$interviews$was$that$the$functionality$of$the$smart$watch$is$what$is$ important$for$the$consumers,$and$not$the$device$itself.$The$smart$watch$is$located$ergonomically$ and$accessibly$on$the$wrist,$which$makes$it$comfortable$for$the$consumers$to$use$it,$but$when$ 25$

$ other$wearable$devices$become$available$there$is$a$chance$of$the$smart$watch$being$replaced.$ “The%device%will%change,%there%will%still%be%smart%watches,%but%which%device%is%being%used%will% change”,$according$to$interview$A$and$interview$B$raises$the$issue$of$which$device$will$be$used$in$ the$future:$“We%will%always%have%one%gadget%containing%the%CPU%power,%but%the%question%is%which?”.$$ The$technology$maturity$is$also$closely$connected$to$this$trend,$since$there$will$be$different$ devices$depending$on$how$the$technology$development$evolves.$The$consumers$can$own$a$smart$ watch,$or$another$device,$and$interviewee$C$means$“it%remains%to%be%seen%if%we%will%have%many% different%things,%or%just%one%thing%where%everything%is%gathered”.$$ Even$if$consumers$find$the$functionality$of$the$smart$watch$appealing$today,$it$is$too$early$to$say$ which$device$they$will$choose$when$the$entire$market$for$wearable$devices$increases$with$the$ future$technology$development$(Interview$C).$Therefore,$the$consumer$attitudes$towards$device$ flexibility$will$have$a$large$impact$on$the$future$market$for$smart$watches.$$

5.3 Challenges for future development The$future$development$of$the$smart$watch$market$will$according$to$the$expert$interviews$be$ affected$by$the$previous$mentioned$trends.$However,$there$is$also$a$series$of$challenges$to$take$ into$account$that$can$affect$both$the$how$the$trends$will$evolve$and$the$whole$development$of$ the$market.$$ For$example,$as$mentioned$in$the$theory$chapter$“2.3.3$Technology$constraints”$there$are$still$ issues$related$to$the$display$size$and$battery$capacity.$During$the$interviews$even$more$ challenges$were$brought$up,$not$only$related$to$technology$but$also$to$consumer$attitudes$and$ the$society.$The$challenges$will$be$presented$here.$ Table%9.%Summary%of%the%challenges%for%future%development.%

CATEGORY%

CHALLENGE%

Technological%barriers%

• •

Technology%performance% Ecosystem%

Consumer%attitudes%

• • •

Consumers%not%ready% Consumer%habits% Consumer%acceptance%

Society%issues%

• • •

Data%and%integrity% Healthcare%regulations% Social%norms%

26$

$

5.3.1 Technological barriers According$to$the$interviews,$there$are$many$technological$challenges$that$will$affect$the$ development$of$the$smart$watch$market.$Examples$are:$the$technology$performance$and$the$ ecosystem.$Also,$many$technologies$related$to,$and$incorporated$into,$smart$watches$are$only$in$ the$beginner$state,$yet$to$unlock$their$full$potential.$$ The$technology%performance$is$perhaps$the$most$important$factor$for$how$the$trends$will$evolve$ and$affect$the$future$development$of$the$market,$since$there$are$still$many$problems$related$to$ the$performance.$The$issues$implied$by$the$display$size$have$already$been$mentioned,$but$they$ were$once$again$empathised$during$the$interviews.$Interview$A$states$that$“the%display%is%small,% you%can%read%your%messages%and%perhaps%send%something%short,%but%you%will%not%use%it%for%reading% emails”,$and$interviewee$B$expresses$“we%need%new%ways%to%interact%and%control%it,%before%that%is% good%enough%it%will%not%make%much%difference”.$The$battery$capacity$issue$was$also$brought$up$ during$several$of$the$interviews,$but$from$somewhat$different$points$of$view.$The$most$common$ opinion$was$that$the$battery$capacity$simply$is$really$bad,$and$that$it$will$just$be$“yet%another% thing%you%have%to%charge”$(Interview$C).$However,$according$to$interviewee$E,$there$are$two$sides$ of$this:$how$long$the$battery$lasts$and$how$long$it$will$take$to$recharge$it,$meaning$“it%would%not% be%a%problem%if%you%could%charge%the%battery%faster”.$$ Another$issue$related$to$the$smart$watch$performance$that$was$raised$during$the$interviews$was$ the$question$about$what$advantage$the$smart$watch$brings$to$consumers.$Two$of$the$ interviewees$said$that$it$“does%not%solve%that%many%problems”$and$that$there$is$“no%other% advantage%than%the%fact%that%they%reflect%what%you%already%have%on%your%phone”$(Interview$E;$ Interview$B).$This$is$of$course$a$challenge$for$the$market$development$since$it$“will%not%go% forward%as%long%as%the%smart%watch%is%not%good%enough%to%replace%what%existed%before”$(Interview$ B).$$ Several$of$the$interviews$also$mentioned$the$importance$of$the$whole$experience$for$smart$ watch$consumers.$“It%will%not%be%enough%for%the%smart%watches%to%become%faster%and%have%better% battery,%the%whole%ecosystem%needs%to%be%ready”%(Interview$A).$They$implied$that$the$industry$ must$recognise$the$smart$watch$as$a$serious$platform$so$that$the$technology$will$be$further$ developed$and$become$more$useful,$also$to$overcome$the$issues$regarding$the$technological$ performance$(Interview$D).$$

5.3.2 Consumer attitudes The$market$had$become$more$mature$regarding$digital$services$and$products,$much$thanks$to$ the$digitalisation$and$Internet$of$Things,$and$consumers$today$are$able$to$decide$the$value$of$a$ product$or$service$after$a$very$short$period$of$time$(Interview$D).$Still,$smart$watches$have$not$ 27$

$ gained$the$same$attention$as$the$smartphones$did$years$ago.$Interviewee$E$describes$the$main$ reason$for$the$rapid$development$and$success$story$of$the$smartphones$as$“the%phone%was%very% limited%but%it%was%still%so%obvious%why%you%should%have%it,%[…],%a%computer%in%your%pocket,%a%personal% device”,$while$also$explaining$that$one$issue$for$the$development$of$the$smart$watch$market$is$ that$the$smart$watch$is$not$nearly$as$obvious$as$the$smartphone$was.$$ This$issue$was$lifted$in$several$interviews,$despite$the$market$and$technology$maturity.$ “Consumers%do%not%know%how%the%smart%watch%works%or%what%it%should%be%used%for”$claims$ interviewee$B,$but$the$consumers$are$not$entirely$to$blame$according$to$interviewee$D$who$ states$that$companies$need$to$figure$out$what$type$of$value$proposition$they$should$deliver$via$ the$smart$watches.$It$is$also$mentioned$that$not$all$consumers$are$interested$in$technology$and$ that$some$consumers$are$still$careful$regarding$technology$solutions.$This$means$that$even$ though$companies$offer$services$on$wearable$devices$it$is$not$sure$that$the$consumers$are$ready$ to$use$them.$“When%will%ordinary%people%be%ready%to%lock%their%doors%with%the%smart%watch?”$ (Interview$A).$$ The$attitude$issue$is$also$a$result$of$consumer$habits$and$consumer$acceptance.$The$technology$is$ very$new,$as$are$the$interaction$methods$and$the$functionality.$This$means$that$the$consumers$ are$not$yet$used$to,$nor$willing$to$try,$the$interaction$methods$needed$to$unlock$the$full$potential$ of$the$smart$watch.$The$consumers$are$simply$not$ready$to$take$the$leap$needed$for$smart$ watches$to$find$their$place$(Interview$B).$Also,$technology$acceptance$takes$time.$For$example,$ Apple$released$Macintosh$1984$but$it$was$not$until$the$release$of$Windows$1995$that$it$became$ mainstream$to$use$a$keyboard$and$computer$mouse$for$interaction$with$the$computer.$Another$ example$is$that$flat$phones$with$touch$screens$existed$long$before$the$iPhone$was$released,$but$it$ was$not$until$then$the$consumers$accepted$it.$“What%happened%when%the%iPhone%was%released%it% not%what%normally%happens,%[…]%the%adoption%curve%is%in%general%much%longer%and%it%takes%several% tries%before%success”.$(Interview$E)$ The$barrier$implied$by$consumer$attitudes$is$an$important$challenge$ahead,$but$according$to$the$ interviews$it$will$only$affect$the$market$development$in$the$nearest$future$since$it$is$a$question$of$ consumer$habits$and$that$attitudes$change$over$time.$$

5.3.3 Society issues When$talking$about$the$future$development$of$the$smart$watch$market,$there$are$also$issues$with$ only$an$indirect$connection$to$technology$and$consumers.$In$this$thesis,$they$are$referred$to$as$ society%issues.$$

28$

$ The$most$common$barrier$raised$in$the$expert$interviews$was$the$processing$of$consumers$data$ and$integrity.$With$consumers$monitoring%need$and$the$QS$trend$having$a$large$impact$on$the$ market$development,$a$great$deal$of$data$is$collected$by$the$smart$watch$and$incorporated$ sensors.$Since$we$are$in$such$an$early$stage$of$this$technology$development,$according$to$the$ interviewees$there$are$an$increasing$amount$of$questions$raised$by$the$consumers$(Interview$E;$ Interview$F).$“We%are%in%an%stage%where%‘anything%goes’,%where%you%want%to%track%and%collect%all% possible%data.%At%the%same%time%there%are%people%starting%to%wonder%where%it%goes%and%who%owns%it.% When%everything%is%connected%–%who%is%responsible%for%the%safety?”$(Interview$B).$This$issue$can$ also$affect$how$both$the$sensor$development$trend$and$QS$trend$evolve,$since$it$might$keep$ consumers$from$using$smart$watches$if$the$data$is$not$handled$in$an$appropriate$way.$$ Another$barrier$related$to$integrity$is$the$regulations$within$the$healthcare$and$medicine$ industries.$Even$though$the$smart$watch$market$and$the$sensor$development$bring$new$business$ opportunities$to$those$industries,$an$opinion$shared$between$interviewee$C$and$E$is$that$it$might$ take$a$while$before$we$see$any$revolutionary$developments.$“It%has%to%be%approved%by%authorities% since%it%will%be%a%medical%device,%and%those%processes%take%a%very%long%time”$(Interview$E).$$ There$are$also$social$norms$in$the$society,$closely$related$to$the$need$for$personal$identity,$which$ will$affect$the$smart$watch$market.$The$appearance$of$the$smart$watch$have$a$large$impact$on$the$ consumer$attitudes$towards$using$it,$especially$since$the$smart$watch$is$a$visual$device$that$ consumers$carry$on$them.$“If%the%watch%is%not%appealing,%consumers%will%not%wear%it”,$says$ interviewee$C$and$interviewee$B$agrees$“the%product%needs%to%be%invisible%because%the%public% should%not%notice%it”.$$A$common$opinion$is$also$that$when$interacting$with$other$people,$they$ should$get$the$full$attention,$i.e.$it$is$impolite$to$be$distracted$by$a$smart$watch$(Interview$E).$$ These$society$issues$can$affect$how$all$of$the$previously$identified$trends$evolve,$but$they$are$ more$likely$to$affect$the$trends$related$to$the$needs$for$personal%identity$and$monitoring.$$ $

29$

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5.4 Summary of results To$get$a$better$overview$of$the$results$conducted$in$the$research,$Table$10$shows$a$short$ summary$of$the$results.$$ Table%10.%Short%summary%of%results.%

AREA%

CATEGORY%

RESULT%

Consumer$motivations$

• • •

Personal%identity% Monitoring% Comfort%

Usage$situations$

• • •

Extension%of%smartphone% Health%purposes% Personal%advantages%

Technology$trends$

• •

Technology%maturity% Sensor%development%

Consumer$behaviour$trends$

• •

Quantified%self% Device%flexibility%

Technological$barriers$

• •

Technology%performance% Ecosystem%

Consumer$attitudes$

• • •

Consumers%not%ready% Consumer%habits% Consumer%acceptance%

Society$issues$

• • •

Data%processing% Healthcare%regulations% Social%norms%

Smart%watch%usage%

Trends%

Challenges%for% development%

$

$

30$

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6 Discussion The%purpose%of%this%thesis%was%to%study%how%the%market%for%smart%watches%will%appear%in%2020.%In% doing%so,%three%subUquestions%were%formulated%with%the%aim%to%identify%consumer%motivations%for% using%smart%watches,%relevant%trends%that%will%have%an%impact%on%the%development%of%the%smart% watch%market,%and%to%analyse%how%these%trends%will%affect%consumer%behaviour%related%to%smart% watches%within%a%few%years.%In%this%chapter,%the%results%from%the%study%will%be%analysed%and%discussed% to%meet%the%purpose%of%this%study.%%

6.1 General observations 6.1.1 The smart watch is a new device To$answer$the$research$questions,$it$was$necessary$to$identify$different$usage$situations$and$ trends$that$will$affect$consumer$expectations$and$behaviour$in$the$future.$The$three$identified$ usage$situations$are$when$consumers$use$smart$watches$“as%an%extension%of%the%smartphone”,$“for% health%purposes”$and$“for%personal%advantage”.$The$four$identified$trends,$which$relates$to$ technology$and$consumer$behaviour,$are$“technology%maturity”,$“sensor%development”,$“device% flexibility”$and$“QS”.$$ The$usage$situations$are$based$on$different$consumer$motivations,$i.e.$desires$to$satisfy$different$ needs.$The$needs$that$consumers$wish$to$satisfy$when$using$a$smart$watch$are$the$needs$for$ “monitoring”,%“personal%identity”,$and$“personal%advantages”.%These$needs$will$also$have$an$impact$ on$the$different$trends,$since$trends$are$highly$affected$by$consumers.$$ A$series$of$barriers$have$also$been$identified,$and$they$revolve$around$the$three$main$areas$ “technology%performance”,$“consumer%attitudes”$and$“society%issues”.$The$barriers$will$have$a$ direct$impact$on$how$the$trends$evolve$the$coming$years,$which$will$affect$the$future$ development$of$the$market.$$ In$this$research,$the$smart$watch$is$defined$as$a$small,$wearable$device$with$connection$to$the$ Internet.$It$is$strategically$positioned$on$the$wrist,$and$except$from$telling$time$and$being$ connected,$many$smart$watches$have$the$capacity$to$perform$biometric$measuring$by$using$ different$types$of$builtTin$sensors.$This$ability$is$identified$as$one$of$the$key$advantages$of$smart$ watches,$and$it$is$closely$related$to$the$consumer$motivation$based$on$the$need$for$monitoring.$ The$usage$situations$found$in$this$study$are$based$on$all$of$the$three$needs,$which$also$have$an$ impact$on$the$different$trends.$This$leads$to$two$observations$formulated$in$the$following$ questions.$

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$ 1) Are%there%no%other%needs%than%monitoring,%personal%identity%and%comfort,%which%are%the% reason%for%consumers%to%use%smart%watches?%% 2) What%does%the%consumer%needs%and%usage%situations%imply%for%the%smart%watch%as%a%device% in%comparison%to%devices?% The$identified$needs$strike$as$being$extremely$selfTcentric,$especially$the$needs$for$personal$ identity$and$comfort,$and$it$is$clear$that$the$motivations$are$based$on$personal$advantages.$The$ need$for$monitoring$consists$of$two$parts.$One$part$involves$the$consumer$being$informed$of$ what$is$happening$in$the$outside$world$via$notifications$and$availability,$but$the$more$important$ part$revolves$around$being$in$control$of$health,$mood$and$other$factors$related$to$the$physical$ states$of$the$consumers.$Thus,$smart$watches$mostly$satisfy$selfTcentric$needs$and$this$is$one$of$ the$most$important$differentiators$when$comparing$the$smart$watch$with$other$devices,$for$ example$a$smartphone.$$ Mobile$devices$such$as$smartphones,$tablets$and$so$on,$satisfy$the$same$needs$as$when$using$a$ smart$watch,$but$also$several$needs$that$are$not$satisfied$when$using$a$smart$watch.$The$most$ obvious$example$is$the$social$need,$i.e.$the$need$for$communication$and$interaction%with$others.$ During$the$expert$interviews,$communication$was$mentioned$in$the$sense$that$consumers$can$ receive$notifications$about$communicative$messages$such$as$email,$SMS$and$even$phone$calls.$ However,$due$to$technological$constraints$and$the$interaction$limitations,$the$smart$watch$was$ described$as$an$intermediary$tool$rather$than$the$primary$device$for$communication.$Another$ example$of$a$need$satisfied$by$mobile$devices$but$not$smart$watches,$is$the$need$for$ entertainment.$Consuming$media$on$smartphones$and$tablets,$as$a$way$to$fulfil$the$need$for$ entertainment,$is$made$possible$by$the$technical$performance$but$in$particular$the$large$display,$ which$the$smart$watch$do$not$have.$The$smart$watch$could$be$suitable$to$use$as$a$intermediary$ tool$for$controlling$other$media$devices,$but$will$not$be$the$preferred$device$for$consuming$ entertainment.$$ The$lack$of$need$for$communication$was$brought$up$during$the$interviews,$and$implies$that$ consumers$think$of$smart$watches$in$a$different$way$than$smartphones$and$other$mobile$ devices.$Even$though$one$of$the$most$common$usage$situations$for$a$smart$watch$is$to$use$it$as$ an$extension$of$the$phone,$it$is$not$meant$to$replace$the$smartphone.$It$is$rather$used$as$a$new$ type$of$device$that$brings$new$value$to$consumers.$The$primary$value$proposition$lies$within$the$ promise$of$incorporated$advanced$sensors,$which$make$it$possible$for$consumers$to$measure$ their$body$and$track$their$activities$in$new$ways.$$

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6.1.2 Future usage situations The$results$from$this$study$allow$for$some$assumptions$regarding$future$situations$where$smart$ watches$will$be$used.$This$part$of$the$discussion$is$related$to$the$third$subTquestion,$which$is$ about$how$the$identified$trends$will$affect$usage$behaviour$for$smart$watches$within$five$years.$ As$mentioned$in$chapter$“3.2.3$Methods$used$to$conduct$and$analyse$the$interview$data”,$this$ section$is$inspired$by$scenario$analysis$methods$and$the$future$usage$situations$are$based$on$the$ identified$trends$and$current$consumer$behaviours.$$ The$identified$usage$situations$will$keep$being$the$primary$situations$where$smart$watches$will$ be$used$in$five$years$but$with$the$technology$development$affecting$the$trends,$and$the$trends$ affecting$consumer$attitudes,$there$is$a$possibility$of$additional$future$advantages$that$will$be$ discussed$in$this$section.$The$possible$future$advantages$related$to$smart$watches$are:$ automation,$safety,$and$professional%use.$$ Automation Internet$of$Things$is$a$common$reference$to$products$that$are$not$only$connected,$but$connected$ to$each$other$as$well.$As$more$things$become$connected$over$time,$smart$watches$will$in$ combination$with$other$products$enable$many$advantages$related$to$automation.$The$smart$ watch$will,$unlike$mobile$devices,$constantly$be$carried$on$the$consumer’s$body,$which$enable$ position$based$service$solutions$with$a$high$degree$of$accuracy.$In$combination$with$the$smart$ watch$being$connected$to$other$things,$this$will$open$up$for$many$different$types$of$solutions.$ Imagine$a$household$consisting$entirely$of$connected$things$where$light$sources$can$be$turned$ on$and$off$depending$on$where$the$consumer$is$located,$or$where$the$oven$will$turn$off$if$the$ consumer$leaves$home.$Keys$can$be$incorporated$in$smart$watches$and$doors$can$be$unlocked$ when$approached.$Even$credit$cards$could$be$incorporated$into$the$smart$watch$and$where$ mobile$payments$are$possible$today,$smart$watch$payments$will$be$possible$within$a$few$years.$ Since$one$of$the$most$common$usage$situations$identified$in$this$research$is$when$the$smart$ watch$is$being$used$for$personal$advantage$and$one$of$the$identified$trends$that$will$have$an$ impact$on$the$market$development$is$technology$maturity,$all$the$mentioned$situations$are$ possible$outcomes$in$a$near$future$depending$on$consumer$values.$$ Safety The$constant$position$on$the$wrist$in$combination$with$the$trend$for$a$development$of$more$ advanced$sensors,$is$a$reason$for$believing$that$a$possible$advantage$within$a$few$years$will$be$ the$safety%aspects.$If$smart$watches$are$able$to$measure$biometrics$such$as$pulse$and$perhaps$ even$blood$pressure$or$sugar$level,$they$can$become$an$importance$device$for$people$with$ diseases.$As$shown$in$chapter$“2.3.2$Fields$of$use”,$much$research$is$done$within$this$area$and$if$ 33$

$ the$trend$of$sensor$development$evolves$and$the$sensor$market$grows,$many$of$the$applications$ can$become$reality$and$really$make$a$difference.$If$health$data$is$collected$global$and$regularly$ over$years,$more$extensive$analysis$will$be$possible$and$make$health$related$behaviour$patterns$ even$more$accurate.$Also,$if$consumers$can$put$smart$watches$on$their$children,$they$will$be$able$ to$monitor$not$only$their$location$to$see$that$they$are$safe,$but$also$their$health.$In$the$long$term,$ this$could$make$it$possible$to$detect$chronic$diseases$in$an$early$stage$and$change$consumer$ behaviour$to$prevent$diseases.$$$ Professional use The$third$possible$future$advantage$is$to$use$smart$watches$for$professional%use,$other$than$ within$healthcare$and$medicine.$This$is$closely$related$to$the$identified$situation$of$using$the$ smart$watch$as$an$extension,$however,$not$necessarily$as$an$extension$of$the$smartphone.$As$of$ today,$the$smart$watch$is$used$mostly$for$private$purposes$but$due$to$its$characteristics,$it$should$ be$considered$suitable$to$use$in$professional$purposes$as$well.$The$fact$that$it$provides$quick$ access$to$information$and$instant$notifications$suggests$it$could$be$useful$within$for$instance$ logistics$across$different$industries,$especially$if$there$are$options$for$scalability$of$the$ functionality.$One$example$is$within$the$restaurant$sector$where$a$customised$smart$watch$could$ be$used$by$the$staff$in$purpose$to$more$time$efficient$communicate$meal$orders$between$ customers$and$kitchen$staff.$Another$example$is$within$warehouses$where$the$smart$watch$could$ be$used$by$the$warehouse$staff$when$they$search$for$products$to$an$order$or$similar.$Depending$ on$how$the$technology$maturity$trend$and$Internet$of$Things$evolve,$this$type$of$solution$will$be$ more$or$less$possible.$$

6.1.3 Development variables Consumers$are$a$factor$that$will$have$a$large$impact$on$the$development$of$the$market$for$smart$ watches,$as$are$other$industries$and$trends.$The$three$factors$will$be$discusses$below.$$ Consumer impact When$analysing$the$challenges$mentioned$in$chapter$“5.2$Challenges$for$future$development”,$an$ interpretation$is$that$the$pace$of$the$market$development$will$depend$mainly$on$consumers.$Of$ course,$the$technological$barriers$have$to$do$with$companies$within$the$value$chain$for$wearable$ technology$and$the$whole$wearable$technology$ecosystem,$but$also$consumer$expectations$on$ technology$since$they$are$the$ones$who$will$be$accepting,$or$declining,$new$technology$solutions.$ Consumers$cannot$be$stuck$in$old$technology$habits$while$the$technology$continues$to$developed$ and$in$the$case$of$smart$watches,$this$is$mostly$correlated$to$interaction$methods.$Consumers$ must$take$a$big$leap$from$old$habits$of$interaction$methods$since$the$minimal$appearance$of$ smart$watches$does$not$allow$for$the$same$interaction$methods$as$with$for$example$a$ 34$

$ smartphone,$tablet$or$laptop.$Therefore,$consumers$must$embrace$new$interaction$methods$and$ technology$solutions,$or$smart$watches$will$not$find$a$natural$place$in$consumers’$lives.$$ The$embracement$is$also$important$for$consumer$attitudes$to$change$towards$smart$watches.$ Consumers$must$stop$comparing$smart$watches$to$other$mobile$devices,$since$it$is$clearly$a$new$ type$of$device$according$to$this$study.$It$is$therefore$not$a$question$of$why$they$need$a$smart$ watch$since$they$already$own$a$smartphone$or$a$traditional$watch,$but$a$matter$of$what$new$ value$the$smart$watch$can$provide$to$the$consumers.$$ The creation of trends The$appearance$of$the$smart$watch$market$in$a$few$years$is$based$on$the$market$today$as$well$as$ how$certain$trends$will$evolve.$Some$trends$that$will$have$a$large$impact$on$the$market$ development$are$already$identified$in$this$research.$When$analysing$the$trends,$they$are$in$ particular$created$by$two$variables$that$are$closely$linked$together.$One$variable$is$the$ consumers,$hence$the$consumer$behaviour$trends,$which$are$created$due$to$consumer$wishes$ and$values.$The$other,$perhaps$even$more$influential,$variable$is$ICT.$For$example,$technology$ manufacturers$and$product$developers$are$the$creators$of$the$technology$trends$in$this$study.$ They$are$the$source$for$technology$development,$which$have$led$to$technology$maturity$and$ better$sensors.$Another$example$is$Pebble$Technology,$who$accomplished$a$great$deal$for$the$ general$smart$watch$trend$with$their$recordTbreaking$crowdfunding$campaign$as$they$exposed$ the$need$and$want$for$smart$watches$in$the$first$place.$These$examples$indicate$how$ICT$impact$ on$consumers,$which$in$turn$indicates$how$ICT$contributes$to$the$creation$of$trends.$$$ Trends are not always positive Trends$are$shaping$the$development$of$the$market,$and$this$study$has$identified$four$different$ trends$related$to$technology$and$consumer$behaviour.$Some$of$them$imply$a$positive$impact$on$ the$market,$and$if$looking$solely$on$those$trends,$there$seem$like$smart$watches$definitely$will$ become$more$mainstream$during$the$next$years.$However,$some$of$them$also$imply$that$this$is$ not$the$case.$The$trend$of$device%flexibility$show$an$interest$for$the$functionality$rather$than$the$ device,$which$mean$that$if$this$trend$continues$to$evolve,$smart$watches$might$not$be$the$device$ of$the$future.$Also,$the$trend$of$becoming$a$quantified%self$can$imply$certain$issues$for$consumers,$ for$example$that$control$can$create$stress.$As$with$everything,$balance$is$important,$and$the$wish$ to$affect$the$outcome$of$the$data$can$easily$rub$this$balance.$The$tracking$can$get$out$of$control$ and$by$constantly$reminding$the$consumers$of$numbers$and$results,$this$trend$can$create$a$stress$ factor.$Also,$stress$will$most$likely$result$in$a$more$negative$outcome$of$the$data,$which$creates$ more$stress,$and$so$on.$However,$there$are$many$positive$sides$of$tracking$the$body,$especially$ for$people$with$chronic$diseases,$but$as$with$everything$there$need$to$be$a$balance.$$ 35$

$

6.2 Method criticism The$aim$of$this$research$was$to$examine$the$market$for$smart$watches,$and$smart$watches$only.$ The$study$was$limited$not$to$include$other$wearable$devices$or$to$be$a$comparative$study$ between$them.$The$method$consisted$of$two$parts:$a$literature$review$on$consumer$acceptance$ and$a$qualitative$study$in$form$of$expert$interviews.$$ The$literature$review$was$focused$on$frameworks$and$models$on$consumer$acceptance$ regarding$technology.$Three$models$were$utilised,$from$which$the$consumer$motivations$for$ using$smart$watches$were$identified.$There$are$many$different$models,$as$well$as$modifications$ of$models,$regarding$technology$acceptance$and$using$other$models$may$have$affected$which$ consumer$motivations$were$identified.$Also,$since$there$are$a$limited$number$of$models$on$ wearable$technology$acceptance,$least$to$say$smart$watch$acceptance,$different$interpretations$of$ the$models$used$in$this$research$may$have$altered$the$results.$$ The$qualitative$study$consisted$of$data$gathered$from$6$expert$interviews.$As$Table$4$showed$in$ chapter$“3.2.3$Methods$used$to$conduct$and$analyse$the$interviews”,$the$experts$worked$within$ companies$with$an$interest$for,$or$a$position$on,$the$market$for$smart$watches.$If$the$interviews$ would$have$been$conducted$with$experts$within$other$areas$of$the$market,$or$if$a$larger$number$ of$interviews$would$have$been$conducted,$the$results$may$have$been$different.$However,$all$6$ interviews$resulted$in$remarkably$similar$data,$which$implies$that$only$one$or$two$more$ interviews$would$not$have$changed$the$results.$$ Worth$mentioning$is$the$lack$of$data$gathered$from$consumers$in$this$study.$It$was$left$out$due$to$ the$purpose$was$to$gain$insights$regarding$industry$trends$and$development$factors$influencing$ the$market$for$smart$watches,$rather$than$usability$or$user$experience$insights$of$smart$watches.$ A$quantitative$part$in$form$of$a$survey$could$also$have$been$useful$to$verify$the$consumer$needs$ and$motivations$when$using$smart$watches.$However,$due$to$the$time$limitation$of$the$research,$ this$was$not$considered$valuable$enough$to$include$in$the$research$since$the$data$could$be$ collected$from$analysing$the$models$and$qualitative$data.$$ The$future$usage$situations$presented$in$Chapter$6$was$developed$with$inspiration$from$the$ scenario$analysis$method.$However,$notice$that$the$method$was$only$used$as$inspiration,$not$a$ framework,$for$analysing$the$identified$trends$and$what$they$might$imply$for$consumers.$This$ choice$was$taken$due$to$time$limitations$of$the$project,$since$this$method$was$detected$late$into$ the$process$of$the$project.$If$the$method$had$been$detected$earlier,$the$thesis$would$probably$ have$benefitted$from$using$this$method$as$a$framework.$$ $

$ 36$

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7 Conclusion This$chapter$will$summarise$the$findings$and$results$of$the$research,$as$well$as$answering$the$ research$questions.$Also,$suggestions$for$future$research$are$presented$here.$$

7.1 Answering the research questions Q:%Which%are%the%main%drivers%for%consumers%using%smart%watches?% The$main$drivers,$which$are$based$on$a$series$of$needs$that$the$consumers$wish$to$satisfy,$are$ personal%identity,$monitoring$and$comfort.$Each$of$the$three$drivers$plays$a$key$role$for$why$ consumers$use$smart$watches.$The$three$needs$also$imply$what$value$smart$watches$bring$to$ consumers$and$the$value$proposition$indicates$that$smart$watches$need$to$be$classified$as$a$new$ type$of$device,$i.e.$smart$watches$are$not$a$substitute$to$other$devices$such$as$smartphones,$ tablets$or$laptops.$! Q:%What%trends%are%relevant%for%the%development%of%the%smart%watch%market?% There$are$two$types$of$trends$that$will$affect$the$market$development:$technology$trends$and$ consumer$behaviour$trends.$The$technology$trends$are$technology%maturity$and$sensor% development,$and$the$consumer$behaviour$trends$are$device%flexibility$and$quantified%self.$These$ trends$are$predicted$to$play$an$important$role$of$how$the$market$will$appear$in$a$few$years$and$ how$these$trends$evolve$will$affect$the$direction$of$the$market$development.$$ Q:%How%will%these%trends%affect%the%usage%behaviour%for%smart%watches%within%a%few%years?% The$three$trends$technology$maturity,$sensor$development$and$quantified$self$are$predicted$to$ affect$consumer$behaviours$to$positively$influence$the$development$and$extent$of$the$smart$ watch$market.$They$imply$what$an$important$role$the$smart$watch$will$play$when$consumer$ needs$shift$from$social$needs,$which$are$satisfied$by$mobile$devices,$to$needs$for$monitoring.$$ However,$the$trend$device$flexibility$implies$that$consumers$will$find$sensors$more$important$ than$the$device$itself,$and$depending$on$what$other$wearable$devices$are$developed$within$the$ next$years,$consumers$may$or$may$not$continue$to$use$smart$watches$depending$on$what$device$ is$more$comfortable$and$will$satisfy$their$needs$better.$$ Q:%How%will%the%market%for%smart%watches%appear%in%2020?% The$market$for$smart$watches$will$be$largely$dependent$on$how$the$development$of$sensors$ evolves.$Sensors$are,$and$will$continue$to$be,$the$most$important$part$of$smart$watches$and$the$ value$proposition$lies$within$what$the$sensors$are$capable$of$performing.$Consumers$will$use$ smart$watches$primarily$for$monitoring,$either$to$keep$being$informed$of$what$is$happening$in$ 37$

$ the$surrounding$environment,$or$to$keep$track$of$their$health.$Smart$watches$are$also$well$suited$ for$professional$use$and$there$are$business$opportunities$within$primarily$logistics$due$to$the$ appearance$of$them$as$well$as$their$functionality$advantages.$$ One$important$condition$for$the$development$of$the$smart$watch$market$to$evolve$is$that$there$ must$be$an$ecosystem$consisting$of$device$manufacturers,$as$well$as$application$developers$and$ network$operators.$The$smart$watch$cannot$only$be$an$individual$product$but$must$be$put$in$a$ context$to$take$a$natural$place$in$the$consumers’$lives.$Also,$social$norms$and$consumer$habits$ will$affect$the$pace$of$the$development.$This$means$that$in$the$end,$consumers$are$and$will$ always$be$the$crucial$factor$influencing$the$development$of$the$market$for$smart$watches.$$$

7.2 Future research This$study$has$as$mentioned$in$chapter$“6.2$Method$criticism”$not$included$consumers,$who$are$ of$large$importance$for$this$research$subject.$Thus$it$would$be$interesting$to$conduct$both$ qualitative$and$quantitative$studies$with$consumers$in$order$to$verify$or$generalise$the$results$in$ this$study.$A$comparison$between$the$smart$watch$and$other$wearable$devices$would$also$be$ interesting$to$determine$the$market$appearance$for$the$broader$category$of$all$wearable$devices$ in$the$future.$Also,$healthcare$and$medicine$regulations$were$shallowly$mentioned$in$the$report,$ but$can$have$a$large$impact$on$the$future$for$wearable$technologies.$Therefore,$a$study$on$this$ subject$would$be$of$high$interest$to$determine$the$market$development$for$smart$watches$and$ other$wearable$technology.$$

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8 References Pew$Research$Center$(2014)$The%Internet%of%Things%Will%Thrive%by%2025.$[Online]$$ Available$at:$http://www.pewinternet.org/2014/05/14/internetTofTthings/$[Accessed$7$ October$2015]$ Årsand,$E.,$Muzny,$M.,$Bradway,$M.,$Muzik,$J.,$&$Hartvigsen,$G.$(2015)$Performance%of%the%First% Combined%Smartwatch%and%Smartphone%Diabetes%Diary%Application%Study.$Journal$of$Diabetes$ Science$and$Technology,$9(3),$pp.$556–563.$ Ashbrook,$D.$L.,$Clawson,$J.$R.,$Lyons,$K.,$Starner,$T.$E.,$&$Patel,$N.$(2008)$Quickdraw:%the%impact%of% mobility%and%onUbody%placement%on%device%access%time.$Proceedings$of$the$SIGCHI$Conference$ on$Human$Factors$in$Computing$Systems,$pp.$219–222.$ACM.$ Barbera,$V.$(2015)$Wearable%Technology%and%Its%Impact%on%Internet%Marketing.%[Online]$Available$ at:$https://www.imforza.com/blog/wearableTtechnologyTimpactTonTinternetTmarketing/$ [Accessed$6$October$2015]$ Chen,$C.TC.,$&$Shih,$H.TS.$(2014)$A%Study%of%the%Acceptance%of%Wearable%Technology%for%Consumers%U% An%Analytical%Network%Process%perspective.$$ Collis,$J.$&$Hussey,$R.$(2014)$Business%Research%–%a%practical%guide%for%undergraduate%and% postgraduate%students.$4th$ed.$UK:$Palgrave$Macmillan.$ Danova,$T.$(2014)$The%Wearables%Report:%Growth%Trends,%Consumer%Attitudes,%and%Why% Smartwatches%Will%Dominate.$Business$Insider.$$ Davis,$F.$(1986)$A%technology%acceptance%model%for%empirically%testing%new%endUuser%information% systems:%theory%and%results.$Ph.D.$thesis,$Massachusetts$Institute$of$Technology.$ Donelan,$J.$(2015)$A%World%of%Wearables:%The%everUevolving%category%of%wearables%includes%items% that%range%from%essential%to%whimsical.$Information$Display,$31(1),$pp.$18T21.$$ Edwards,$C.$(2013)$Watch%Clever.$Engineering$&$Technology,$8(12),$pp.$30–35.$ Funk,$M.,$Sahami,$A.,$Henze,$N.,$&$Schmidt,$A.$(2014)$Using%a%TouchUSensitive%Wristband%for%Text% Entry%on%Smart%Watches.$In$CHI’14$Extended$Abstracts$on$Human$Factors$in$Computing$ Systems,$pp.$2305–2310.$ACM.$ Gao,$Y.,$Li,$H.,$&$Luo,$Y.$(2015)$An%empirical%study%of%wearable%technology%acceptance%in%healthcare.$ Industrial$Management$&$Data$Systems,$115(9),$pp.$1704T1723.$ Grant,$R.$M.$(2010)$Contemporary%strategy%analysis.%Hoboken.$NJ:$John$Wiley$&$Sons.$ 39$

$ Gruenerbl,$A.,$Pirkl,$G.,$Monger,$E.,$Gobbi,$M.,$&$Lukowicz,$P.$(2015)$SmartUWatch%Life%Saver:% SmartUWatch%InteractiveUFeedback%System%for%Improving%Bystander%CPR.$In$Proceedings$of$the$ 2015$ACM$International$Symposium$on$Wearable$Computers,$pp.$19–26.$ACM.$ IHS$(2012)$Wearable%Technology%Market%Suited%for%Rapid%Growth.$[Online]$$ Available$at:$http://press.ihs.com/pressTrelease/designTsupplyTchain/wearableTtechnologyT marketTsuitedTrapidTgrowth$[Accessed$28$October$2015].$ Isacson,$D.$(2015)$Application%development%for%smartwatches:%An%investigation%in%suitable% smartwatch%applications.$Master’s$thesis,$Royal$Institute$of$Technology.$ Jiang,$H.,$Chen,$X.,$Zhang,$S.,$Zhang,$X.,$Kong,$W.,$&$Zhang,$T.$(2015)$Software%for%Wearable% Devices:%Challenges%and%Opportunities.$In$Computer$Software$and$Applications$Conference$ (COMPSAC),$39(3),$pp.$592T597.$ Kim,$K.$J.,$&$Shin,$D.TH.$(2015).$An%acceptance%model%for%smart%watches:%Implications%for%the% adoption%of%future%wearable%technology.$Internet$Research,$25(4),$527–541.$ Knibbe,$J.,$Martinez,$D.,$Bainbridge,$C.,$Chan,$C.TK.,$Wu,$J.,$Cable,$T.,$Munir,$H.,$&$Coyle,$D.$(2014)$ Extending%Interaction%for%Smart%Watches:%Enabling%Bimanual%Around%Device%Control.%In$CHI’14$ Extended$Abstracts$on$Human$Factors$in$Computing$Systems,$pp.$1891–1896.$ACM.$ Komninos,$A.$&$Dunlop,$M.$(2014)$Text%Input%on%a%Smart%Watch.$IEEE$Pervasive$Computing,$ 13(4),$pp.$50–58.$$ Kracheel,$M.,$Bronzi,$W.,$&$Kezemi,$H.$(2014)$A%Wearable%Revolution:%Is%the%smartwatch%the%next% small%big%thing?.$IT$One$Magazine,$pp.$18T19.$ Kulviwat,$S.,$Bruner,$I.$I.,$Gordon,$C.,$Kumar,$A.,$Nasco,$S.$A.,$&$Clark,$T.$(2007)$Toward%a%unified% theory%of%consumer%acceptance%technology.$Psychology$&$Marketing,$24(12),$pp.$1059–1084.$ Lockman,$J.,$Fisher,$R.$S.,$&$Olson,$D.$M.$(2011)$Detection%of%seizureUlike%movements%using%a%wrist% accelerometer.$Epilepsy$&$Behavior,$20(4),$pp.$638–641.$ Mann,$S.$(2013)$Wearable%computing.$The$Encyclopedia$of$HumanTComputer$Interaction,$2nd$Ed.$ Mayer,$P.,$Volland,$D.,$Thiesse,$F.,$&$Fleisch,$E.$(2011).$User%Acceptance%of’Smart%Products':%An% Empirical%Investigation.%In$Wirtschaftsinformatik,$pp.$9.$ Merriam,$S.$B.$(2014)$Qualitative%Research:%A%Guide%to%Design%and%Implementation.%3rd$ed.$ Hoboken:$Wiley.$ Nagtegaal,$F.,$Verzijl,$D.,$&$Dervojeda,$K.$(2015)$Internet%of%Things:%Wearable%technology.$[Case$ study]$Business$Innovation$Observatory.$ 40$

$ Porter,$M.$E.,$&$Heppelmann,$J.$E.$(2014).$How%smart,%connected%products%are%transforming% competition.$Harvard$Business$Review,$92(11),$pp.$64–88.$ Porzi,$L.,$Messelodi,$S.,$Modena,$C.$M.,$&$Ricci,$E.$(2013)$A%Smart%WatchUbased%Gesture%Recognition% System%for%Assisting%People%with%Visual%Impairments.$In$Proceedings$of$the$3rd$ACM$ international$workshop$on$Interactive$multimedia$on$mobile$&$portable$devices,$pp.$19–24.$ ACM.$ Pradhan,$D.,$&$Sujatmiko,$N.$(2014)$Can%smartwatch%help%users%save%time%by%making%processes% efficient%and%easier?$Final$report,$University$of$Oslo.$ Rawassizadeh,$R.,$Price,$B.$A.,$&$Petre,$M.$(2015)$Wearables:%Has%the%Age%of%Smartwatches%Finally% Arrived?.$Communications$of$the$ACM,$58(1),$pp.$45T47.$ Sethuram,$D.,$&$Lakshmi,$N.$(2015)$Wearable%Computers%in%Modern%World.$In$International$ Journal$of$Computer$Science$&$Communication$Networks,$5(3),$pp.$166T168.$ Smartwatch$Group$(2013)$What%is%a%Smartwatch?$Definition.$[Online]$$ Available$at:$http://www.smartwatchgroup.com/smartwatchTdefinition/$[Accessed$6$October$ 2015]$ Spencer,$B.$(2013)$Mobile%users%can’t%leave%their%phone%alone%for%six%minutes%and%check%it%up%to%150% times%a%day.$Daily$Mail$News$11$Feb.$[Online]$$ Available$at:$http://www.dailymail.co.uk/news/articleT2276752/MobileTusersTleaveTphoneT minutesTcheckT150TtimesTday.html$[Accessed$10$November$2015]$ Venkatesh,$V.,$&$Davis,$F.$D.$(2000)$A%Theoretical%Extension%of%the%Technology%Acceptance%Model:% Four%Longitudinal%Field%Studies.$In$Management$Science,$46(2),$pp.$186–204.$ Venkatesh,$V.,$Morris,$M.$G.,$Davis,$G.$B.,$&$Davis,$F.$D.$(2003)$User%Acceptance%of%Information% Technology:%Toward%a%Unified%View.$In$MIS$Quarterly,$27(3),$pp.$425T478.$ Xiao,$R.,$Laput,$G.,$&$Harrison,$C.$(2014).$Expanding%the%Input%Expressivity%of%Smartwatches%with% Mechanical%Pan,%Twist,%Tilt%and%Click.$In$Proceedings$of$the$SIGCHI$Conference$on$Human$ Factors$in$Computing$Systems,$pp.$193–196.$ACM.$ Yi,$M.,$Jackson,$J.,$Park,$J.,$&$Probst,$J.$(2006)$Understanding%information%technology%acceptance%by% individual%professionals:%Towards%an%integrative%view.%Information$&$Management,$43(3),$pp.$ 350T363.$

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9 Appendices 9.1 Appendix A: Interview questions Below$is$the$interview$questions$translated$to$English.$ •

Can$you$describe$your$role$at$the$company?$



How$would$you$describe$the$company’s$position$at$the$market$for$smart$watches?$



How$would$you$describe$that$the$market$for$smart$watches$has$changed$during$the$last$ years?$



Which$are$the$driving$factors$behind$the$development$on$the$market?$



In$which$situations$do$you$think$smart$watches$are$used$today?$$



What$are$the$motives$for$using$smart$watches?$How$would$you$describe$the$expectations$ that$consumers$have$when$using$it?$



Why$do$you$think$consumers$choose$to$use$smart$watches$instead$of$other$wearable$ technology?$



Which$trends$do$you$find$important$regarding$future$consumer$behaviour?$



How$do$you$think$the$market$for$smart$watches$will$appear$in$5$years?$



Which$trends$are$relevant$when$talking$about$the$development$of$the$market?$



Do$you$think$there$are$any$barriers$that$can$delay$or$stop$the$development?$



Do$you$see$any$difference$in$how,$when$and$where$consumers$will$use$smart$watches$in$ 5$years,$compared$to$today?$



Do$you$believe$that$the$development$of$the$smart$watch$market$will$affect$the$ expectations$consumers$have$on$smart$watches?$



How$will$companies$within$the$IT$and$media$industry$be$affected$by$the$development$on$ the$smart$watch$market$during$the$next$5$years?$



Do$you$see$any$similarities$or$differences$between$the$development$of$the$smart$watch$ market$and$the$smartphone$market?$In$your$opinion,$can$smart$watches$reach$the$same$ popularity$as$smartphones?$

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