IN , SECONDDEGREE PROJECT MEDIA TECHNOLOGY 300 CREDITSCYCLE

, STOCKHOLM SWEDEN 2016

Smart Watch Usage in 2020A STUDY OF USAGE BEHAVIOURS ANDTHE DEVELOPMENT OF THE MARKET FORSMART 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

ceen@kth.se

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”.$$

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Cecilia$Engelbert$

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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 CURRENT MARKET FOR SMART WATCHES 6 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 METHODOLOGY 11

3.1 LITERATURE REVIEW 11 3.1.1 PURPOSE OF SEARCH 11 3.1.2 SEARCH METHODS AND RESULTS 12 3.2 QUALITATIVE STUDY 12 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 CONSUMERS AND TECHNOLOGY 16

4.1 CONSUMER ACCEPTANCE 16 4.1.1 TAM/TAM2 16 4.1.2 UTAUT 18 4.2 ACCEPTANCE FOR SMART WATCHES 19

5 RESULTS 21

5.1 SMART WATCH USAGE 21

5.1.1 CONSUMER MOTIVATIONS 21 5.1.2 IDENTIFIED USAGE SITUATIONS 22 5.2 IDENTIFIED TRENDS 23 5.2.1 TECHNOLOGY TRENDS 24 5.2.2 CONSUMER BEHAVIOUR TRENDS 25 5.3 CHALLENGES FOR FUTURE DEVELOPMENT 26 5.3.1 TECHNOLOGICAL BARRIERS 27 5.3.2 CONSUMER ATTITUDES 27 5.3.3 SOCIETY ISSUES 28 5.4 SUMMARY OF RESULTS 30

6 DISCUSSION 31

6.1 GENERAL OBSERVATIONS 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 METHOD CRITICISM 36

7 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 $

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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?%

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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

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.$$

TERM% EXPLANATION%

FoMO$ Fear%of%Missing%Out%ICT$ Information%and%Communications%Technology%IoT$ Internet%of%Things%TAM$ Technology%Acceptance%Model%UTAUT$ The%Unified%Theory%of%Acceptance%and%Use%of%Technology%QS$ Quantified%Self%

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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.$$

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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,$

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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.%

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”%

STANDARD% CATEGORY% DEVICES%

Product%form%

HeadTmounted$• Helmets%• Glasses%

BodyTdressed$ • Different%types%of%clothing%

HandTworn$

• Watches%• Bracelets%• Gloves%

FootTworn$• Shoes%• Socks%

Product%function%

Healthy$living$• Sport%wristbands%• Smart%bracelets%

Information$consulting$• Smart%glasses%• Smart%watches%

Somatosensory$control$ • Somatosensory%controller%

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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).$$

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

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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.$$

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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.,$2015).$

$

8$

$

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).$$

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9$

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).%

$

10$

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.$$

$ (

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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.%

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$3.$%

• 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%

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

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.$$

• 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%

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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.%

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.$$

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?%

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$

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.%

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.$

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$

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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”.$$

$

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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.$$

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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%

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18$

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.$$

$

19$

$

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.$$

$

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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).$$

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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.$$

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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.%

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$

USAGE%SITUATIONS% RELATED%NEEDS%

Extension%of%the%smartphone% Monitoring,%comfort%

Health%purposes% Monitoring,%comfort%

Personal%advantages% Personal%identity,%monitoring,%comfort%

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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.$$

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Table%8.%Identified%trends.%

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”.$$

CATEGORY% TREND%

Technology%trends%• Technology%maturity%• Sensor%development%

Consumer%behaviour%trends%• Quantified%self%(QS)%• Device%flexibility%

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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$

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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%

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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$

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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.$$

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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.$$

$

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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%

Smart%watch%usage%

Consumer$motivations$

• Personal%identity%• Monitoring%• Comfort%

Usage$situations$

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

Trends%

Technology$trends$• Technology%maturity%• Sensor%development%

Consumer$behaviour$trends$• Quantified%self%• Device%flexibility%

Challenges%for%development%

Technological$barriers$• Technology%performance%• Ecosystem%

Consumer$attitudes$

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

Society$issues$

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

$ $

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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$if$

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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$

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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.$$

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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.$$

$ $

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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$

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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.$$ $

$

39$

8 References Pew$Research$Center$(2014)$The%Internet%of%Things%Will%Thrive%by%2025.$[Online]$$

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Chen,$C.TC.,$&$Shih,$H.TS.$(2014)$A%Study%of%the%Acceptance%of%Wearable%Technology%for%Consumers%U%

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42$

$ $

$

43$

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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