Connectivity chips IoT applications

Even Qualcomm’s new chip won’t revive wearables market

Qualcomm has launched a new wearable chip for its Snapdragon Wear family, but don’t place any bets on the silicon giant making any great portion of its future revenue from wearables. The consumer appetite for the devices seems to have stalled, and there’s not much the likes of Qualcomm appear to be able to do about it.

As with the smart home, the wearables market is an IoT flagship market that has failed to deliver its predicted impact, so far at least. The devices are shipping in volume, but the enthusiasm for wearables has greatly diminished in the consumer press – a vehicle that should be a driver for consumer wearables.

So Qualcomm’s new Snapdragon Wear 1100 processor is a sensible complement to its existing Wear 2100 chip, as it addresses the ‘targeted-purpose wearables’ like fitness trackers and elderly health monitors, and not the multi-purpose wearables like smartwatches, currently served by the 2100. It’s a move to cover all the bases, short of the tiny microcontrollers that power things like Xiaomi’s Mi Band.

The Wear 1100 supports a Cat-1 LTE modem, with support for 3G, as well as Bluetooth and WiFi. Qualcomm’s iZat location engine provides multi-GNSS support, which provides location functions like geofencing. A cryptographic engine and random number generator should provide adequate IoT security, and new reference platforms (in collaboration with Aricent, Borqs, Informark, and SurfaceInk) allow developers to bring their designs to market quickly. The Wear 1100 is available today.

When the early Android Wear watches arrived, they were essentially jacks-of-all-trades but masters of none. Packed full of activity sensors, the Bluetooth-only devices relied on a smartphone to push notifications to the watch screen, and act as the data link for managing search and messaging requests.

Some of these early Android smartwatches had some standalone functionality, typically using GPS and on-board storage to provide a solid jogging aid, but it was only with a later update to the Android Wear software stack that the OS could support WiFi – which unlocked a much larger list of possibilities.

While some smartwatches included cellular connectivity as a way to untether themselves from smartphones, there hasn’t been a notable success for a cellular smartwatch due to the consumer having to purchase an additional SIM subscription.
But WiFi allows a user to do a lot more with their watch than just Bluetooth, and avoid having to add a device or buy extra capacity for their monthly cell-plan. Samsung decided to adapt its Tizen OS to provide its Galaxy smartwatches with cellular and WiFi connectivity before Android Wear supported it, but that hasn’t won it the market.

Put simply, consumers still don’t seem particularly fond of smartwatches, and it’s hard to think what manufacturers can do to improve the state of things. Sure, they can lower the price, but if they were to streamline the feature-set, they’d be forsaking the screen and smartphone interface and focusing on the activity tracking offered by the likes of Fitbit, Jawbone, and Xiaomi.

Given that the main component cost of a smartwatch is the screen and supporting chipset, removing the screen is the quickest way to shrink the bill of materials. While the fitness trackers are less functional, they have been selling at much higher volumes than smartwatches.

The reason for this isn’t simply the price. The Apple Watch has sold around 12m units in its first year, and at its average price of $500, this represents around $6bn in revenue – which is around three times more than Fitbit manages in a year.

The other smartwatches are typically twice the price of an average fitness wearable (around $200-300), but also seem to represent decent business for the likes of Samsung, LG, and Motorola – but not the runaway successes that many were expecting.
Within the next two years, we expect a large number of cheaper smartwatches to arrive on the market, in a similar manner to the transition taking place in the smartphone market – which has seen Samsung dethroned by Chinese OEMs, as the top Android vendor.

In their current guise, smartwatches seem destined to remain extensions of smartphones, and so are destined to be commoditized. With current cellular and WiFi hardware, the devices run into the constraints of their battery capacity – and can often fail to make it through a day of moderate use.

But looming 3GPP standards could be the step change needed to provide a low-power connection with sufficient bandwidth to wearables like smartwatches – provided that the MNOs can find a way to ease the pain of paying for that data, as is currently the case.
With Release 13 expected to arrive at some point in June, the Cat-M1 (formerly Cat-M) and Cat-M2 (NB-IoT) represent new opportunities for device manufacturers – as long as the low power usage claims are in fact true, and only once the supporting network infrastructure is in place, with most expecting this to take place during 2018.

Cat-M1 and Cat-M2 provide a lot of opportunities for IoT developers, and not just in wearables. Many M2 advocates say the protocol will enable devices to have 10-year battery lives, which is very comparable to the claims of LPWAN technologies like LoRa and Sigfox. IoT devices like remote weather stations, vibration sensors, and asset trackers could all benefit from the technology, and it looks like there will be something of a race between cellular MNOs and the LPWAN stakeholders to build out sufficient network coverage and bandwidth to power adoption (see separate item).

The other challenge is convincing hardware manufacturers to support the tech, but the 3GPP has a lot of leverage in this regard. Sigfox has opened up its stack to multiple vendors, but retains full control of the network itself, while Semtech is the main source of LoRa silicon, with licensing agreements with other vendors. LPWAN as an industry hasn’t expressed much interest in wearables, however. The big three consumer protocols (Blutooth, WiFi, cellular) seem destined to control the wearables market, but whether that distinction ever becomes something to write home about remains to be seen.

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