Why Juniper Research’s prediction of 36M smartwatches in 2018 misses the mark

Smartwatch sales will grow over the next handful of years but still won’t rival sales of smartphones and tablets. That’s the word from Juniper Research, which on Tuesday said it expects 36 million smartwatches to ship annually by the year 2018. The firm suggests two types of smartwatches — Dashboard/Console and Multi-function — which I previously defined as second screens and standalone devices, with Apple(s aapl) and Samsung raising consumer awareness of the products.
Samsung Galaxy Gear concept
I generally agree with Juniper Research’s smartwatch market sentiment: We’re in the early days of smartwatches even though the devices have been around in some form or fashion for more than a decade. I remember buying a Microsoft(s msft) SPOTWatch in 2004 that provided glanceable data in the form of news, weather and text messages over FM radio waves, for example. But I think Juniper Research, and others, are missing the bigger picture when it comes to wearables. You have to think beyond what today’s implementations are bringing to the wrist.
Before explaining what I mean, consider how Juniper Research sees the smartwatch market unfold:

“[S]hipments of smart watches will be driven by a new Multi-function segment capable of performing an array of additional functionalities such as tracking fitness and sports activities, payments or ticketing compared to the more limited Dashboard/Console segment.”

So in the next five years, we’ll continue see watches tethered to smartphones as second screens or be the device where currently available mobile apps are optimized for the small screen? I don’t see much innovation down that path: It’s simply pushing existing functionality from smartphones and tablets to your wrist.
That’s not necessarily a bad thing but the word that Juniper Research didn’t mention is “context”. It implies it, yes, but the word is missing and that in my opinion is what will truly advance the smartwatch so that a widespread audience is interested in the product.
And that’s why I’m not surprised to see the huge omission of Google(s goog) in the Juniper Research release. No other company is yet competing with Google when it comes to context. Just last week, I devoted nearly 600 words to this particular topic, explaining why I want Google Now on my wrist. Yes, some of Google Now is the ticketing activity Juniper Research mentions in future watches. But the product is far more than that and another place to run mobile apps isn’t the answer. Data is the key. And Google has it more than anyone else right now.
Google Now cards
Think of it this way: We glance at our basic watches for very specific and very timely information. Namely, the time and date, for example. This provides one point of context. Another would be our location, which a GPS radio can easily provide. Finally, add in hyper-personalized information gathered from online activities such as favorite sports teams, businesses you’ve looked for online, travel plans, and more.
Add those data points to the context of where and when — along with integrated natural language processing for occasional queries and input — and what do you get? A smartwatch that proactively notifies you of important yet glanceable information on your wrist. (Or in front of your eye in the case of Google Glass).
Apple and Samsung may indeed raise consumer awareness of smartwatches as Juniper Research suggests. But a watch without deep contextual functionality is simply going to be another same ol’, same ol’ smartwatch that’s been around for years. If I’m right, I think Juniper Research’s smartwatch shipment forecast for 2018 is low because a contextual smartwatch would be a huge game-changer.