Here’s IDC’s Hot Take on Hands-Free Wearable and AR Computing in Industry


This Analyst Reveals The Next Wave of Hands-Free Wearable Computing

Ramon Llamas, Research Director for Augmented Reality, IDC
Ramon Llamas, Research Director for Augmented Reality, IDC

RealWear recently caught up with Ramon Llamas, Research Director with IDC’s Devices and Displays team, covering wearables, augmented/ virtual reality, and smartphones.  We talked about hands-free wearable computing, augmented reality, predictions and challenges.

What’s your focus at IDC?

I cover mobile devices and AR/VR. Mobile devices include wearables, smartphones, and occasionally tablets and other products. Each quarter I’m charged with sizing the market, forecasting the directions it is heading, and uncover what both consumers and commercial users are saying and thinking about these devices.

How long have you been there?  What did you do before that?

14 years. I’m a career changer and switched over from education administration to market research after I finished my MBA.

 How did you first get interested in AR and wearables?

Around 2014, there was a market shift towards AR and wearables, and my manager asked me to help lead the research on these areas. We made the point that AR and wearables were the next big things and mobile computing, and I’m happy to see that the markets for both of them are trending in this direction.

 It’s been quite a roller coaster with the adoption curve, no?

Roller coaster is an apt description. At the beginning, there was a lot of hype, a lot of novelty, and definitely a lot of interest. And it came from both consumers and commercial users too, so that demonstrated their broad appeal. And then both wearables and AR took some tentative steps forward, which was a combination of companies experimenting with very different approaches, some of which were well received and others were not. Then in recent years, there has been a brief cooling off period, where we’ve seen a number of me-too and copycat devices and experiences leave the market. But what’s become of that is a series of best-of-breed experiences that continue to improve and appeal to more users. That’s where we are now.

What’s the current state of the union?  Where are we right now at this moment in terms of hands-free wearable computing adoption in industrial?  RealWear already has hundreds of Global 2000 customers but what’s IDC’s market data tell us at the macro view?

Some context is in order: Last year we saw a total of 135K AR devices ship worldwide for commercial use, and that was up from the 114 K the year before. That’s 19% year over year. But if you look closer, there were many companies relying on older devices to represent the bulk of volumes.

Some more context: Last year, we noticed many industrial companies moving ahead with their AR strategies. That means moving from trial usage of just one device on one team, but now moving to limited deployments across several teams and some moving to even broader deployments across the company.

I’m excited to see that RealWear already has hundreds of Global 2000 customers, but here’s the really neat part: it’s still only at the beginning. The number of companies becoming aware and interested is increasing, mainly because they are learning how AR can make workers more productive. And RealWear is especially well-equipped to go that route.

How does the market look for the rest of this year (2018) and beyond?  Any personal or IDC predictions?

Up and to the right, and growing at very strong double-digit rates throughout. We’ll break through the million unit mark in 2019, and then the eight digit mark by 2021 in terms of shipment volumes.

I think the collection of vertical markets is in good shape, but now expect AR to go deeper than the large Fortune 1000 or 500 companies. Again, this is where companies will see how AR can fit into their corporate strategy to be more productive and generate revenue and profitability.

What are you most excited about in terms of where the world is right now with hands-free wearable tech?

That it is only going to improve from here.

I’m very pleased to see so many users report high satisfaction levels of their wearables. But given the stage of where the market is at – just the beginning – think of all the improvements we can expect for hardware, software, security, battery. And that the market will also branch out into different directions, because not all use cases will be the same either. Some will need something more lightweight, others will need something more hologram-driven, and many will need a tablet-like experience right below their line of vision.

What is your proudest correct prediction you’ve ever made?  Why are you so proud of it? (note – doesn’t have to be hands-free wearable related).

Wow, that’s a fun question. Nailing down the numbers – like market size or how an individual vendor or platform does in any given quarter – is a lot of fun, but I think it’s also a bit narcissistic. What’s more fun for me are the times when we can project out how a market will evolve over time, and how companies will be able to capitalize on it. For example, when VR came out on the market really big with HTC, Oculus, and Sony, many thought it was just going to be about gaming and consumers. We also predicted that there would be terrific opportunity for commercial users, especially in those industries in which a company could take a client to help visualize a solution, like a building or a car design. After that prediction, we had numerous requests from companies who were interested in it, and numerous offers from companies who were already doing it and willing to tell their story.

You tweet a lot about smart watches.  Which one do you currently wear and why?

At this moment, I’m trying a Fitbit Versa.

Let’s start with the challenges.  A construction worker said he was concerned about wearing the device because of fear that Big Brother is watching.  Is this an edge case?

Given the emphasis on privacy in recent months, the concern of having Big Brother watching him is perhaps warranted. But we went through this before, with PC’s (what people are looking at in their browsers) and smartphones (where people are at any given point in time). Eventually, workers got past it because they came to understand the level of productivity that could be achieved with these devices.

Another worker told us she was worried the device might impede her vision.  RealWear has developed its device specifically to give the worker the ability to move the display out of view, but obviously, there’s still something there.  Is simply the wearing of a computer a big hurdle for adoption?

It becomes a non-starter for many, especially for those who not only need direct line of sight to their job, but also peripheral view. And when you think about how mobile some workers have to be, anything that blocks her vision on a regular basis becomes a nuisance, and will likely inhibit adoption.

How important is form factor when it comes to hands-free wearables (and what do you think RealWear has gotten right)?

Form Factor is one of the leading consideration points when selecting a device, right up there with cost, experience, and software. If workers are going to wear this for an entire shift, think about the form factor issues that come to mind: weight, size, ruggedness, audio, video, etc. These have to keep up, or better yet, exceed the expectations of the user in order to gain adoption.

Everyone is talking about the aging workforce or in energy, the ‘great crew change.’  As more and more workers are retiring, how do you think this will affect how workers do their work (or learn) in the next few years?

It’s going to be an interesting few years ahead of us. On the senior end, there can be some degree of resistance to adopt new technologies (i.e., if it ain’t broke, don’t fix it), yet these workers possess a wealth of knowledge and information that could be passed on. On the junior end, these workers have grown up with technology, and this is where AR can play a significant role in getting them prepared without investing too much time and resources

What are a few trends to watch for in industrial wearables (iiot) space?

Always keep an eye on security, especially because AR brings together both video and audio, and connects to a company’s back end servers – there’s lots out there for hackers to go after.

Another thing to look for is a shift from using AR to monitor processes in addition to things. What I mean by that is a lot of AR use cases center on looking at an object, like a piece of machinery or a tank with pumps or something like that. That will never go away. But if we expand the scope to include processes, like how to build a car for instance, that not only monitors the parts we use but ensures that we did it correctly (did you tighten these parts enough? Is there enough material put in place? Did you follow all the steps in the correct order?).

What would you tell a wearable skeptic?   Any advice for them?

A healthy dose of skepticism is a good thing, but consider the evidence:

  • Numerous companies are moving from trial to limited and broader deployments
  • In the process, they are realizing terrific gains in productivity, profitability, and ROI
  • Your competitors are most likely doing it
  • But also ask questions, like have you tried it? What don’t you like about it? Can you see this working at your company?

 What’s the most coolest use case you’ve heard regarding someone or a company deploying a wearable computer in an industrial setting (if something comes to mind for you, or we can delete this question)?

I’m always impressed by those cases in which a wearable computer saves a company time and money, and the early evidence shows this taking place across multiple verticals. I’m also a fan of design and architecture, so those stories where a company is using AR to design and envision a new building from the ground up and also modify the design as they go along always gets my attention.

Another cool use case is when a wearable computer not only helps the user visualize data about a product, but it also helps the user to visualize data about a process. Those are two very related, but two different things. Clearly, visualizing data about a product was the first important step, but linking them to a process to build or repair something multiplies the value multi-fold.

How do you recommend that companies measure ROI when piloting an AR/wearable?  What are some of the questions to ask?

There are several levels of ROI to consider when piloting an AR/wearable. First, take a look at the time savings a user can have. What is the task completion rate? How many more work tickets have been closed? Is there a sense of getting more accomplished with the introduction of an AR or a wearable device?

The next level is looking how quickly these get adopted in an organization. It’s a precursor of what is to come, but it is critical especially in those work situations where multiple users will be on board. For this, companies need to consider which other business units will benefit, especially since many use the same base of information. Also important: the reception from end-users. Getting users aligned with new technology is not without its challenges, so getting buy-in from workers and finding a set of ‘heroes’ to help champion a device helps create positive ROI.

The third level is going to be more long-term, and that comes down to money. Assuming that the task completion rate is higher than before and more work tickets are being closed, it stands to reason that these cost savings will translate into revenue and profit later on.

Choosing the right apps are obviously critical for deploying a hands-free wearable computer.  What are some of the more useful hands-free wearable or AR apps that you’ve seen used in the field?

The first one that field service users usually reach for is see-what-I-see applications out there. More often than not, there are situations that other team members need to see, especially when closing out a work ticket with a manager. Layer on top of that any application that allows a remote user to make annotations on what the wearer is seeing, and provide feedback.

Do you think we’ll ever be at the point where every human being on the planet has a computer somehow attached to their body?

That is the direction we seem to be heading in, but I think the important thing to realize is that the definition of computer will continue to change. Remember when we heard the term ‘computer’ our minds immediately jumped to some kind of massive, monstrous machine like ENIAC? (Okay, maybe I’m dating myself here). Fortunately, we’ve moved beyond that, and if you think of your smartphone as a computer, then we’ve nearly achieved this idea. Wearables and AR are the next frontier to that, and of course there are examples of ingestibles too.

Will there be a day when the PC will go away?  Why or why not?

I don’t think so. Despite slowing growth in the PC market, there has always been a need for a PC for both consumer and commercial users to complete tasks. What has changed is that the PC is not the only smart compute device a person needs, as this has expanded to include smartphones, tablets, wearables, AR/VR, and soon robotics and drones. If anything, we’ve gone from the PC era to the PC-Plus era.

You said that “2016 marked an important step for the AR and VR headset market with product finally arriving in end users’ hands and on their head.  While there was clear demand coming primarily from technology enthusiasts, what became readily apparent were the use cases for enterprise users across verticals.”  Two years later has anything changed?  Have any verticals taken a leadership position with their use of AR and done some notable things?  Do any industries stand out?

Two years later, AR and VR have moved from trial stages to limited, and in some cases, broad deployment. During that time, there have been numerous cases and proof points in which AR and VR have demonstrated their value to increase productivity and solve problems. That was a necessary step in order for the market to evolve.

“I look to manufacturing, oil & energy, utilities, and automotive as the primary vertical markets.” As far as verticals taking a leadership position, I look to manufacturing, oil & energy, utilities, and automotive as the primary vertical markets, mainly because AR finds an easy way to solve problems and expedite processes that these markets have.

You stated that “The wearables market is entering a phase…Now it’s about getting the experience right and that the broader wearable market will double by 2021.  What did you mean by that?

The first phase for the wearables market was really all about getting the product and experience out there. And what we ended up with was simply that: first generation devices with first-generation experiences, and while we did see some innovation during this time, most of these were variations on a theme we already knew.

The next phase for wearables (and by extension, AR/VR as well) is refining those products and experiences. How does the product look and feel? What is the ideal user interface? Which products are best suited to different use cases? This is where things get really interesting.

 What’s the timing of assisted reality vs immersive augmented/mixed reality transition in the industrial space (degree of content investment, health and safety needs, industrial grade performance needs)?  Do you see it as a timing factor or more of a use factor? 

I’ve seen it as a use factor over a timing factor, and here’s why:

Not all use cases need an immersive AR/MR solution, but at the same time, not all use cases benefit from an Assisted Reality either. This is where companies like RealWear need to seek out and champion its solutions in those specific use cases in which assisted reality will/should be the preferred solution for their needs.

And because not all vertical markets are created equally, nor do they move at the same pace, I don’t see it as a timing issue. It’s about aligning the needs of the company with what assisted reality uniquely brings to the table.

 You recently posted (via Twitter) about how a 76 year old man claims his Apple Watch saved his life. Do you think there is an opportunity for the HMT-1 to improve safety metrics in dangerous environments?  Why or why not?

Definitely, but perhaps in a different way.

An Apple Watch rests on a user’s wrist and collects health information about a user 24/7. That’s a lot of information to build and draw conclusions.

For the HMT-1, it is possible to have health sensors built into the device, but I think that gets away from what it does: bringing important information to the user when needed. So rather than collect and display information about their health levels, I’d rather see the HMT-1 collect information on potentially dangerous environments, like a machine is operating under critical levels or that the air in a given room is too hazardous to inhale, and show that information to a user instead.

RealWear recently solidified a strategic deal with Honeywell.  How important do you think this for RealWear at this point in its evolution and growth to have partners like this?   What kind of validation do you think this is for us?

On a scale of 1 to 10, this is an 11.

Honeywell is a recognized brand within the commercial space, and has multiple stable and growing business units into which RealWear’s solutions can be readily injected. For a company of its size and reach to partner with RealWear is a major win for RealWear, and readily acknowledges the solution and potential that RealWear brings to the table. Not only does this validate what RealWear does, it will also bring the attention of other major companies looking to do the same.

RealWear has specifically designed its hardware so it’s NOT an immersive AR experience, so even though it’s very powerful it’s not immersive by design.  Would you say we got that right at this point?

I like how this was a very carefully and purposefully made decision for RealWear to make. There are certainly those times and places where assisted reality has its place, and also times and places in which immersive AR has its place. Certainly, there is plenty of space for both to grow.

 Tell us about a time you’ve had an opportunity to recommend that one of your clients check out RealWear.  Why did it make sense to refer us?

Without revealing the name of the client, by listening to their needs – which included voice control, bright display, ability to have peripheral vision while wearing the device – it just made sense for RealWear’s name to come up. And because this was an industrial client, the ability for them to get a device that can withstand harsh conditions was also towards the top of their list.

Aaron is the Head of Communications for RealWear.

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