Frothy?

Today in the industry, often enough, you hear of a potential bubble, or slowdown in the consumption of apps, mobile and web, (some chatbot focused companies are sending out mailers claiming the average American now downloads 0 apps a month - this we most certainly believe is a contortion of the facts,) or general tech fatigue. Maybe some of these things are a little true but the reasons and the underlying causes are what is interesting to us here at CemtrexLabs rather than some making some observational generality - and we're not the only ones.

Nah, warped.

In our perspective, the perception of the software and computing market in general today is heavily influenced by the mobile revolution and the app boom - and what is happening is actually a normalization of the industry to an more traditional computing medium evolution cycle. We will get back to how this relates to the first bit in just a few seconds.

We believe that this perception distortion is partially caused by Wall Street analysts and bankers whom have a tremendous amount of effect on the way in which tech companies are perceived and valued but often have a poor meta-picture of how computing has evolved. The quest for another 'iPhone' now, we believe is an example of a Wall Street delusion.

A perfect environment

The mobile revolution and app boom was a the result of a perfect combination of factors and is not an applicable model to the way in which we should perceive the uptake of mediums, the evolution of computing moving forward or the general growth rate and health of the tech industry. A number of conditions in the market, in our opinion, led to the rapid adoption of smartphones enabling the mobile revolution and creating this distorted reality perception of the market and they way in which it would evolve and progress. Some such factors include the incredible penetration of feature or so-called dumb phones prior to widespread adoption of smartphones, as well as, the willingness of major carriers to provide major subsidies of the sale of these devices, bringing costs for the device near to zero, in many cases, for the consumer in exchange for commitment to a 1-2 year contract. Some similar ‘atmospheric’ conditions exist for the two particular mediums we are focusing on here, wearables, specifically smartwatches, and HUD (heads-up display) computers, either VR or AR (this includes devices in the market today like HTC Vive, Oculus Rift, Microsoft Hololens and Meta) - however the major catalytic factors that led to quick and rapid adoption of smartphones are lacking in our assessment. These factors are (1) the possession of a similar device already by a sizable amount of the population and (2) the lack of a natural and inherent subsidy model for these devices like the one that had been developed for over 30 years by the carriers for mobile telephone services. Additionally, cell phones in first world markets in 2007 were perceived by many as an accessory and status symbol on some level (see further evidence) - buying into the latest and greatest was already a conditioned behavior for many.

Macs had incredible uses when they first appeared on the market in 1984. However adoption was slow.

A unique beast

This quick, rapid, huge mobile revolution was very unlike the PC and Internet revolutions that preceded it - and that took over 25 years to culminate to a point of maturity. According to the US Census, in 1984 just 8.2% of American households had a computer, and the there is no data on how many of those had an internet connection - by 1997, that figure jumps to 36.6% of American households, with about half of those households connected to the net. By 2009 68.7% of all American households have a computer and nearly all of them have an internet connection. Keep in mind, the first PCs begun to appear in the market in the late 70s and the first internet products begun to appear in the early 1980s. In contrast, the first "smartphone" was released in 1999, and was anything but smart. The first devices that would resemble what smartphones of today look like would be released by Kyocera and Handspring, in 2001 and 2002, respectively. By mid-2011, smartphones had reached penetration levels nationally on par with the PC in almost half the time.
The Treo 180 was powered PalmOS, an important precursor to the Android and iOS user experiences.

There are some serious parallels here

This is where we see similarities to the HUD market (both AR and VR), as well as, the wearable market, specifically, smartwatches. Goldman Sachs feels similarly about the HUD computing market and has issued a report dedicated to its outlook - for us we find common ground with the report, especially on its assertion of the correlation between the growth and adoption paths for HUD computing and the PC. As mentioned before, most people have never interacted with a HUD computer and cannot immediately envision the ways in which such a device and the experiences it could afford could optimize and enhance our work and our play. This is similar to the problems that most consumers had when understanding whether or not to buy a computer in the late seventies or even early eighties - they simply could not envision how and why they would need a computer. Many of their first interactions would come in the coming years through an experience at work or with a friend and by 1996 when adoption had grown, many people may not have had a computer but they could easily envision how and why a computer could help make their lives more efficient and effective. Similar conversations even occurred around 2008 during the beginning of the culmination of the mobile revolution with "laggards" and even top executives of top firms whom were in the business but couldn't see the impending opportunity if the pieces were put together properly as Steve Jobs or Andy Rubin could.
Elizabeth I receiving what is thought to be the first wristwatch in the 16th century. While the technology within has certainly evolved it’s capabilities stayed almost the same for over 400 years. Image: Gruen Guild Watches Ad 1926

Other mediums, similar situation

The same predicament currently exists for wearables, especially smartwatches. Allow us to digress for a second, the concept of a wristwatch is over 500 years old, which makes this not exactly a 1-to-1 comparison - and we believe this is more of a perception issue we will explore more in an upcoming piece dedicated to the topic. Traditional high-end automatic watches usually have between 1-4 features, the base feature obviously being telling time (often inaccurately at that) with some other additional but rather basic features, a chronograph, a date function (also totally reliant on the user setting it) and maybe some other fancy feature like an alarm. Digital watches, like their analog predecessors are a little better and can offer up 20 functions in some cases, including some cool specialized ones like Casio's that's geared to fishermen and what they need;) However they lack the radios and software to really make them powerful tools in all of our lives - in most cases, they are nothing short of jewellry with no real function. Smartwatches close those gaps and afford us the ability to create meaningful interactions through these relics on our wrists for the average individual. However, investors have already begun to predict the doom of key smartwatch products and many consumers do not yet see the value. However, in our opinion, their place in our future and their eventual market saturation is inevitable, and the same goes for HUD computing, much like today it would impossible for someone to argue that the PC or smartphone is superfluous. In both cases, we believe that as the environment around us evolves average consumers will begin to see the inherent value in these mediums - in the example of smartwatches, when smart door locks and light switches become standard base equipment in new homes, these small and quick interactions that are well suited to a smartwatch will become more apparent and desirable - their immediate value, not having to fumble your keys or being able to easily manage the the lights in your home as you are walking through it have tremendous inherent value that will become incredibly apparent to consumers and begin to create the early majority (not to mention we are huge believers messaging, notifications and even the phone are all killer apps for smartwatches already), a similar paradigm we believe exists for HUD computing. While these things are beginning to happen, we are still at a stage where we see adoption exclusively among innovators and early adopters, we believe this means the markets in both cases are still in an extremely early phase of market maturation where actualization of the majority, and the incredible opportunities that will arise with it are yet to occur. This is why here at CemtrexLabs we are investing heavily into the growth and development of our teams in VR, AR and wearable design and development. We believe the next great software companies will be built through effective execution of simple and great ideas that leverage these mediums in addition to more common, and typical mediums, like smartphones, and the companies that will get there first are investing to lay their stakes now.
PaidEasy
The PaidEasy Apple Watch App enables users to pay their restaurant or bar tab noninvasively from their wrist

Ignore the noise and build

We here at CemtrexLabs are very passionate about helping to realize and accelerate the ongoing digital revolution’s next phases and are here to be your partners in doing so. If you have an idea or concept you have been working on and need a team to help you build, refine and iterate upon what you are working on for a smartwatch, other wearable, VR or AR, reach out to us here.

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