KEY POINTS
The ecosystem for wearable apps is highly fragmented. There have been many new wearable device launches recently, and more will launch soon, but all of them run on different platforms. It's a pain for developers to create apps for all these environments, and apps are what will make wearables worth wearing. Even Samsung, which runs its popular smartphones and tablets on Android, has elected to go with the Tizen platform for its Galaxy Gear smart watch.
Fragmentation is part of the reason why there are so few wearable apps so far. Aside from Pebble's app market, which has an impressive 1,000 apps, most other devices have less than 100 apps available. The Gear has around 70 apps available. In order to really win over consumers, more robust app offerings are needed. Google is hoping "Android Wear," its new Android-based wearables platform, announced March 18, will help create a mass market wearables ecosystem.
More than anything, a few killer apps are needed to popularize wearable device usage. But programmers need to understand that wearables will create fundamentally new use cases. Many wearable apps still function simply as an extension of smartphone and tablet apps — a way to receive notifications or record data without having to grab your phone. Wearable apps need to break away from this model and do things that no smartphone app can do. An early example might be the Allthecooks Google Glass app that allows for hands-free cooking while recipe instructions are visible at eye-level.
App developers would be wise to focus on wrist-worn devices in attempts to break into the wearable app markets. We believe smart wristwear will make up 70% of wearables shipments throughout the next five years. More than half of global consumers in a recent Accenture survey said they're interested in wrist-worn health and fitness monitors, devices popularized by companies like FitBit and Nike. Over time, smart watches and health bands will blur into one category.
On wrist-worn devices, we believe the health and fitness category will produce the killer apps. Apple's recently released Healthbook app offers a glimpse of an app that can combine data on fitness, physical activity, nutrition, and vital signs. The whole field of personal fitness and health apps will boom as the hardware matures and adds more advanced sensors. Dieting apps, workout apps, and medical apps will try out different approaches — e.g. gamification, social media integration, and data visualization — to see what sticks.
This market is Google's and Apple's to take. Both Google Play and the iOS App Store have over a million apps available and have crossed 50 billion cumulative app downloads. These two app store operators have all the pieces in place to dominate wearable app markets. If Apple or Google can make it easy for developers to translate their phone and tablet apps into wearable apps, these two companies will leap far ahead in the wearables race.
Introduction
Wearable device launches have been frequent in the last year or so. Smaller startups like Pebble and FitBit led the way with their own smart watch and fitness tracker devices. Huge companies like Samsung, Sony, and Nike then entered the fray.
Google Glass, while still not released to the public, has steadily been opening up access to the Glass Explorer Program. People in the program have been given unlimited invites to hand out to friends and acquaintances and in December 2013, customers of Google's music streaming service also received invitations to buy Glass for $1,500.
Despite the flurry of launches, there is a surprising lack of apps. And without apps, wearables will never be truly compelling for mainstream consumers.
The wearable app ecosystem's immaturity is largely a result of platform fragmentation. The smartphone market is dominated by Android and iOS. Developers can choose to create apps for either one of these platforms knowing that they are reaching a wide swath of the smartphone market.
Not so for the wearables market. It isn't just that there's no dominant platform yet, the devices are also in the hands of far fewer users (compared to smartphone brands), creating an even greater disincentive to create apps for any one wearable device.
However, development isn't completely stymied. The outlines of some general concepts for wearable app development have begun to emerge, and will become clearer now that Google has released "Android Wear," its platform for wearable devices.
"This is something of a bad news, good news situation," explains Sean McMains, associate director for iOS at Mutual Mobile, summing up the wearables problem for Mashable's Ask A Dev video interview series. "The bad news is that all of the different wearables that are on the market now use different development platforms ... The good news, however, is that lots of the concepts transfer from one platform to another."
All wearable apps will need simple designs, no-frills interfaces, and should be optimized for small screens, says McMains.
Still, for now, consumers are having to choose among a set of gadgets with minimally stocked, walled-off software. Plus, many wearables are only compatible with a specific set of companion devices. Is a consumer going to purchase a Samsung Galaxy Gear, with access to less than 100 apps, because one of those apps syncs with the BMW i3 Coupe? Or the Nike FuelBand, because it has the Nike Plus app, which is already popular on smartphones and even on some exercise machines?
For developers, the fragmented landscape means dealing with a different software development kit (SDKs) or API (application programming interface) for every device they'd like to build for.
In this report, we'll make sense of the current wearable apps landscape and try to point the way to a few "killer apps."
Killer apps is what it will take to convince still-skeptical consumers that wearables are worth the investment. Breakout mobile app success stories like Angry Birds and Instagram helped drive smartphone adoption. Likewise, a super popular app that's native to wearables would create a virtuous cycle, fueling further device adoption and app development.
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The State Of Wearable App Markets
Our forecast anticipates that the number of wearable devices in use will double this year to 183 million.
By 2018, we expect there will be 561 million wearable devices in use globally. 
The most prominent wearable devices on sale today are the Pebble smart watch, Samsung Galaxy Gear smart watch, and three fitness trackers — the FitBit Force, Nike FuelBand, and Jawbone Up. In the timeline above, you can see just how many wearable devices recently entered the market.
For now, we think the more basic fitness trackers are outselling more complex smart watches.
But when it comes to apps, there's one clear leader.
The Pebble smart watch is far ahead of the other seven major wearable devices in number of apps available, with five times as many apps as the second-place Sony SmartWatch (see chart, below). But even though it has the most fully-stocked app store, Pebble does present some major limitations. It has a fairly low storage capacity (1 GB), and will only hold eight apps on the device at once.
The Samsung Galaxy Gear has more storage, at 4 GB.
In general, the wrist-worn wearables market is divided between devices that are meant to have robust functionality, versus those that are designed to basically provide a single service, and don't host app ecosystems.
In the case of the Nike FuelBand, the band is designed exclusively to monitor fitness activity via its single native app, Nike+ (though other apps can plug into the Nike+ API to run additional services off of Nike's data.)
The trend, though, is towards wearables with more robust software ecosystems.
As we'll discuss later on, the wearables category is currently heavily weighted towards fitness trackers, but these single-purpose devices will eventually be absorbed by the broader and more app-centric smart watch category.
Wearables manufacturers have focused on hardware first, presumably under the assumption that the apps will follow — once the consumer base is there.
There's precedent for this, of course.
When the iPhone launched in 2007, there was no App Store and no third-party developers could create apps for the device (the iPhone app SDK was released in mid-2008).
But five years later, audiences have become accustomed to a wide variety of app-mediated experiences on all their devices, and until wearables offer great app experiences, it's unlikely consumers will rush to buy smart watches or glasses.
Early Wearables App Development
The bottom line is that when it comes to wearable apps, there's a lot of room for improvement.
"The experiences of today’s wearables are pretty mediocre. We just need to say it," said Rodrigo Martinez, chief strategist of life sciences at IDEO, a design and innovation consulting company, speaking to Re/Code at the SXSW festival. "The UI, the interfaces are pretty meh. Every week, we have a new one that measures 80% of the same things that another measures, just in a different form, a different color, a different plastic."
The overarching problem is that the wearable apps ecosystem is messy — a maze of operating systems, SDKs, and APIs.
Manufacturers have pushed their new devices out with their own exclusive platforms, meaning apps built for one device won't work on another device. Sony and Pebble launched with their own custom operating systems. Samsung is using the open-source Tizen as its wearables' operating system.
And other popular devices like the FuelBand and Jawbone UP don't even offer apps. Instead they ask developers with existing smartphone apps to hook into their cloud-based data via APIs, and create features on top of this data. (The Jawbone UP band, for example, allows users to automatically sync data on physical activity between their device and the RunKeeper app.)
What's more, even those devices that do host app ecosystems have been slow to launch the tools for developers to create wearable apps for their devices. Pebble is possibly the sole exception here.
Samsung did not release a Tizen SDK for wearables — so that developers could create apps for the Gear — until March 17, 2014. Until then, the Gear's app store was "invite-only," a strategy sure to limit app development.
In general, Samsung has been pursuing a strategy of encouraging developers to create wearable apps that are Samsung-specific. That's not likely to endear Samsung wearables to developers.
In fact, in the case of Samsung's Galaxy Gear, the rush to bring a wearable device to the market ahead of Apple or Google may have actually put it at a first-mover disadvantage.
At launch, the Galaxy Gear could only sync with the brand new Samsung Galaxy Note 3 phablet device, limiting its mass market appeal. While it's understandable that Samsung would want to keep Galaxy Gear users tethered to their own hardware, this launch strategy forced consumers interested in the smart watch to buy yet another device (the two devices launched simultaneously).
A month later, Samsung made the Gear compatible with all of its most popular smartphones and tablets, but by then the damage may have already been done. Potential purchasers of the Gear were likely put off by the lack of compatible hardware and high cost of buying a Gear and a Note 3, while developers were dissuaded by the likelihood of a small user base and the absence of a public SDK.
Being able to sync up with another mobile device is critical for wearables, because, as discussed earlier, they will never be users' primary smart device.
Wearables typically rely on smartphones or tablets for their Internet connectivity, via Bluetooth.
Samsung does seem to be prioritizing more openness now. The SDK is out. And the Tizen devices will be able to interact with many of Samsung's Android products. Samsung is currently the leading smart watch manufacturer, according to our estimates (see chart, below). But its decision to go with Tizen could handicap its prospects.
Meanwhile, on March 18, Google announced "Android Wear," a platform that will allow manufacturers and developers to create Android-based wearables and apps.
Google also announced that it is working with 11 manufacturers — including Intel, HTC and fashion watch maker, Fossil — to create watches that will run Android Wear.
Google released a developer preview of the APIs and SDK that will allow developers to create wearable-native features for their existing phone apps, as well as custom Android Wear apps.
The company is clearly racing as fast as it can to perfect a wearables platform that will power all kinds of wearable devices, and help these devices integrate with Google services like Google Now and the app store, Google Play.
Google is definitely starting to turn up the heat, but Pebble, the Kickstarter success that generated almost 300,000 pre-orders in the first seven months of 2013, has made the most progress in terms of app development.
Its app store is stocked with about 1,000 apps.
These apps are available from within the Pebble app on users' smartphones. New users of the Pebble watch must download the Pebble app to their phone to begin accessing Pebble's apps for the watch itself.
It's useful to think of the Pebble app on the phone as both an app store and a control center-app for the Pebble watch and the apps that are on the watch.
There are two types of Pebble apps on the watch itself. Some of the Pebble apps require a specific companion app on the phone, while others work solely via the Pebble itself (although the app is initially downloaded from the phone), and don't require a companion app on the phone.
At first, the Pebble app was only available within the Apple App Store. Now, Pebble has made a strategic move in also opening up its app market on Android, which means that its watches can be used with Android phones as well.
Pebble is so far the only smart watch that can sync with devices across the two major platforms.
But, as we noted, Pebble still has its own propriety platform and Pebble SDK that developers must use to create apps for the device. And now that Android Wear has debuted, it's entirely possible that Pebble will drown in a sea of Android-powered smart watches that could launch in the next year.
In any case, wearable fragmentation isn't going away.
Finnish wearable software company Koru Labs thinks this trend is going to continue for the foreseeable future: "We expect every smartwatch provider to build their own app store, and consumers to experience a lawless jungle by 2015."
The Most Popular Apps, And Their Wearable Crossover Potential
Since our early coverage on the wearables market, we have always taken the stance that wearables won't be all-encompassing personal computing devices — at least, not at first. Wearables will not be mass market computing devices that absorb the majority of people's time and attention.
Rather, wearables will serve as a robust extension to existing mobile devices and will fill certain niche use cases. In many cases, they will work unobtrusively in the background (think about a fitness band counting steps or a smart watch that provides reminders only at certain hours).
They will be out of the way but recording data and providing information when people need it.
The same logic applies to the apps designed specifically for wearables. The most successful apps will fill very specific needs, and allow people to do things that simply weren't possible before the advent of wearables.
The heads-up displays manufactured by Recon — which can be used for activities like skiing, by insertion into many brand-name goggles — are a good example of a niche opportunity for a smart app developer. Recon also offers an API and an SDK. Imagine an app that rates your ski runs based on speed, number of falls, etc. Such an app might not sell millions of copies, but it could definitely fetch a respectable price, and be a top-seller among ski enthusiasts.
So what's working now on wearables?
Considering the number of Galaxy Gears and Pebbles sold already (see chart, above), these users have to be utilizing at least some apps from among their rather limited options.
Wearable App Preview, a wearable apps review site, has top 10 rankings of what they consider the best apps on each device.
Based on their rankings, the Galaxy Gear's top apps include a mix of news, entertainment, fitness, and productivity apps.
When it comes to Pebble, almost all of the top-rated apps are games. (There's even a Flappy Bird clone available for Pebble.)
Smart watch apps are clearly a bit of a mixed bag at this point. As we said earlier, the industry is still awaiting its "killer app" to define the category.
But there are some existing mobile apps that work well on wearables, and may point to the future killer smart watch apps.
Productivity apps are a promising area for smart watches. Let's look at Evernote, the hugely popular multi-device note-taking app. It made its way onto the Samsung Galaxy Gear smart watch on the early side, and more recently debuted on the Pebble smart watch (see photo, right).
One of the more beneficial features of Evernote is that your notes and content will be saved and synced across a multitude of devices. Adding Pebble to the mix of devices lets the most on-the-go users have all of their content and checklists right on their wrist. It also is there for users when smartphones are inaccessible.
As Evernote describes, "Have you ever tried to juggle a shopping cart and a mobile phone at the market? Tick off checklists for groceries with the Pebble, which syncs to Evernote, for a hands-free shopping experience."
The Evernote app is also an example of how wearable apps are starting to work independently of smartphones and tablets.
Evernote is among the growing number of Pebble apps that sync directly with cloud-powered services. Foursquare also does this on watches, without requiring a specific companion app on a smartphone.
It makes sense that a watch — which is essentially a productivity device — will be a great home for productivity apps, including to-do list apps, calendar apps, and voice-activated note-taking apps.
What other apps might get big on wearables?
On mobile, consumers use the camera, navigation, and gaming apps on their smartphones and tablets most frequently, according to a survey by Accenture of about 6,000 worldwide consumers. They are also heavily interested in e-books, voice and music recorders, streaming radio, and streaming video apps.
Certain categories will work better with different wearable devices. Camera apps, for example, may be best suited for smart eyewear, like Google Glass.
GPS navigation, or turn-by-turn directions, may fit better on the wrists of drivers or walkers. E-books may never make the crossover to wearables.
Recently, with the addition of the TurnByTurn maps app, the Galaxy Gear got maps and turn-by-turn directions support. It syncs with Galaxy Gear smartphones and has voice guidance on top of on-screen directions.
Across all wearable app categories, integration of voice commands and digital voice assistants — like Apple's Siri and Google Now — will need to get better. Wearables' limited screen real estate and interfaces mean that voice is the most comfortable means for input and output.
But in the next section, we'll discuss the category that we believe will become the most popular wrist-worn wearable device category — health and fitness.
Health And Fitness Will Lead The Charge
Both in terms of hardware and software, consumers have shown the most interest in wearable technologies that allow them to take control of their health and fitness.
Over half of respondents to a global Accenture survey said they were interested in a health monitor, fitness monitor, or personal safety monitor as a dedicated device or as an app.
And that interest has grown. A Bloomberg survey from last year showed that only some 40% of U.S. consumers were interested in smart medical devices.
Wearable apps and devices that monitor health offer a clear use case for societies increasingly concerned with longevity, nutrition, productivity, well-being, and preventive health.
In their new Android Wear wearables platform, Google is also toying with contextualized notifications that will sense when runners, bikers, and other fitness-savvy users are working out and send them information about their vitals mid-workout.
The wearables hardware market is already heavily tilted toward wrist-worn health and fitness trackers.
Fitness bands will make up about 70% of all wearables shipped in 2014.
Over the next few years, as wearables become more mainstream, other wearable device categories — smart watches, eyewear, clothing, etc. — will start to see more uptake.
By 2018, fitness-specific bands will make up a lesser 40% of shipments and the smart watch category on its own will account for 30% of wearables shipments.
But many of these smart watches will also double as health and fitness trackers. Combining these two markets, which will begin to blur together, we believe wrist-worn smart devices will account for about 70% of shipments by 2018, and will be the leading device for wearable app development.
The Wearable App Market Is Google's And Apple's To Take
If there are any two companies that have the scale and existing framework to create a solid wearables app ecosystem, it's Apple and Google.
Consider that the companies' two platforms, Android and iOS, already power almost 90% of the global smartphone installed base, or over 1.3 billion devices worldwide.
Since wearable devices sync with smartphones, dominant smartphone platforms have a distinct advantage in the wearable app space.
Combined, Apple's App Store and Google Play have over 2 million apps available, and have amassed over 110 billion cumulative mobile app downloads across the globe since 2008.
If Android and iOS developers are provided with the right tools, it should be fairly easy for them to build on their existing iOS and Android apps with new features aimed at wearables, or new versions fully 0ptimized for wearables.
Google's influence in the wearable app category is definitely being felt now that the Mountain View, Calif-based company has released its own wearables platform, Android Wear. The release of Android Wear is arguably the single most influential development in the mainstreaming of wearable devices.
The launch of multiple Android Wear-powered smart watches in 2014 is likely to take the smart watch segment from a novelty to an established hardware category.
Meanwhile, Google Glass, which is still only available to a limited group of consumers, has its own SDK. (Google Glass itself was supposed to debut on the market next quarter, but that date looks likely to get pushed back.)
Apple is now a bit behind in the wearables race. Apple engineers continue to work at Siri's integration with third-party apps, which Mac Rumors points to as one of the top technologies Apple can leverage for its wearables platform.
The release of Apple's Healthbook app in March 2014 was interpreted by some analysts as a sign of the health-linked sensors that an iWatch product might include; the app includes ways to track vital signs like blood pressure and hydration. (iPhones don't have a sensor capable of taking these measurements.)
But up to this point, speculation over Apple's wearable plans are just that — speculation. With its Android Wear platform, Google has surged ahead of Apple in the app wearables race.
BOTTOM LINE
The ecosystem for wearable apps is highly fragmented. Even Samsung, which runs its popular smartphones and tablets on Android, has elected to go with the Tizen platform for its Galaxy Gear smart watch.
Fragmentation is part of the reason why there are so few wearable apps so far. Aside from Pebble's app market, which has an impressive 1,000 apps, most other devices have less than 100 apps available. The Gear has around 70 apps available.
Google is hoping "Android Wear," its new Android-based wearables platform, announced March 18, will help create the first mass market wearables ecosystem.
More than anything, a few killer apps are needed to popularize wearable device usage. But programmers need to understand that wearables will also allow for fundamentally new use cases.
App developers would be wise to focus on wrist-worn devices in attempts to break into the wearable app markets. We believe smart wristwear will make up 70% of wearables shipments throughout the next five years.
On wrist-worn devices, we believe the health and fitness category will produce the killer apps. Apple's recently released Healthbook app offers a glimpse of an app that can combine data on fitness, physical activity, nutrition, and vital signs.
This market is Google's and Apple's to take.
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