Wearable Tech Faces Uphill Battle Against Smartphones, AI Integration Boosts Handset Relevance

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On Mon, 3 Mar, 7:05 PM UTC

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Despite growth in wearable technology, smartphones remain dominant due to AI integration and consumer habits. Experts predict AI features will be present in over half of smartphones by 2028.

Wearable Tech Market Growth and Challenges

The wearable technology market, particularly smart glasses, is experiencing significant growth. According to research firm Counterpoint, smart glasses sales surged by 210% year-on-year in 2024, far outpacing the 7% growth in smartphone shipments 1. However, the absolute numbers tell a different story: only about 2 million pairs of smart glasses were sold last year, compared to 1.2 billion smartphones 1.

Meta's collaboration with Ray-Ban has shown promise in the smart glasses sector, offering features like built-in cameras, music playback, and AI-powered voice interactions 1. Yann LeCun, Meta's prominent AI researcher, frequently showcases these glasses during public appearances, highlighting the company's commitment to this technology 2.

Smartphones' Continued Dominance

Despite the growth in wearables, experts believe smartphones will maintain their ubiquity for the foreseeable future. Jack Leathem, an analyst at Canalys, points out that consumers have become accustomed to text-based interactions on touchscreens, making it challenging for voice-controlled wearables to gain widespread adoption 1.

Shen Ye from HTC's Vive wearables division echoes this sentiment, stating, "The most challenging thing is getting people to change their behavior" 2. This resistance to change is exemplified by the continued use of QWERTY keyboards, despite potentially more efficient typing methods 2.

Technical Limitations of Wearables

Wearable technology faces significant engineering challenges in its attempt to replicate smartphone functionality in a smaller form factor. Leathem explains, "There are limits around the computing power currently and battery performance. You can't make them that compact" 1. This limitation is evident in smart watches, which largely remain tethered to smartphones for full functionality 2.

AI Integration Boosts Smartphone Relevance

As wearables evolve, artificial intelligence is simultaneously enhancing the value proposition of smartphones. Major manufacturers like Apple, Samsung, and Xiaomi are integrating AI assistants into their latest offerings 1. Leathem observes, "All the money is going into AI... their vision of the future is keeping the same smartphone form factor, but making it way more useful" 2.

Canalys predicts a significant increase in AI-enabled smartphones, projecting that the share of such devices sold worldwide will rise from the current 16% to over 50% by 2028 1. This trend suggests that smartphones are adapting to maintain their relevance in the face of emerging wearable technologies.

Failed Experiments and Future Prospects

The recent shutdown of Humane, the maker of the "AI Pin," illustrates the challenges facing some wearable tech categories. The AI Pin, designed as a potential smartphone replacement, received poor reviews and failed to gain traction in the market 1. This setback underscores the difficulties in creating wearable devices that can truly compete with smartphones in terms of utility and user experience.

Despite these challenges, Counterpoint predicts continued growth in the smart glasses market as more producers, including social media giants and smartphone makers, enter the field 2. However, for the time being, wearables like smart watches are positioned as accessories to smartphones rather than replacements 1.

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