Bluetooth Smart and the Growth of Appcessories

Most people have never heard of Appcessories, but they’re set to become one of the biggest growth areas of the decade, with a potential market value of over $130 billion by 2020, as shown in the new report “To Ubiquity and Beyond”.  Most analysts have missed them, as they’re made possible by the convergence of a set of disparate elements coming together, most notably the incorporation of Bluetooth Smart in mobile phones and tablets, low cost and easy to use silicon for hardware developers, and published APIs which allows developers of phone Apps to talk to connected devices.  Throw in the innovation that is arising out of crowd-funding initiatives like Kickstarter and indiegogo and you have the ingredients for a new revolution in connected consumer goods.

What is an Appcessory?  Think of a cuddly toy for your three year old which interacts with the story on her tablet.  Think of the stylus you use for sketching on your iPad, where squeezing it changes the thickness or colour of the lines you’re painting.  Or a motor and rudder you clip on a paper plane which lets you control its flight by tipping your smartphone from side to side.  LED lights that come on when you enter the room, which you can program the colour of, or which even sense your mood from the way you’re walking.  Armbands that know you’re about to point at the TV and tell it to change channel before you even move your finger.  Clothes that tell you they need washing.  Many things that until recently were the preserve of science fiction, but are about to become possible and eminently affordable.

The rapid potential growth of Appcessories comes from the fact that phone owners will connect more than one, and hopefully many of them to their phones or tablets.  That concept was first put forward by Nokia in 2001, when they postulated that the world could evolve to have a web of a billion phones and a trillion connected devices.  That prediction was part of a technical proposal to the IEEE, who rejected it in favour of playing with mesh in the wireless wastes of ZigBee.  But Nokia’s idea re-emerged six years later in the form of Wibree, and a further six years on in its most recent incarnation as Bluetooth Smart (the standard formerly known as Bluetooth low energy), it has been built into over a quarter of a million smartphones and tablets.  By the end of 2013 it will be in a further half billion of them.  By 2020 the world will have over 6 billion Bluetooth Smart Phones and tablets.

That’s the foundation for this incredible growth.  It’s an evolution where the things we carry with us start connecting to the things we have around us. One of the best descriptions I’ve come across of an Appcessory is “The Internet of My Things”.  They’re devices which connect to an App on your phone or tablet, allowing you to interact with both.  They may connect to the web and be part of the Internet of Things, but they don’t need to.  Instead they provide the irresistible prospect of a new and captivating experience, where the fun of a phone app can be extended to something you can throw, hold, measure, cuddle or wear.  Appcessories are probably the most diverse technology market we have ever seen, but they are set to succeed because they’re fun, they’re useful and in a very short time they will be cheap.

As the report explains, all of the pieces needed to start this market have fallen into place.  Companies are already selling these products, starting to build the excitement.  There are certainly risks to its growth as many of these companies are new and will have issues with scaling up as volumes rise.  But it’s a market which is of great interest to larger players.  Analysts like Bloomberg already believe that the smartphone market is beginning to plateau.  Although volumes will grow, the global phone market is reaching saturation at its current $358 billion.   In terms of revenue, we’re close to Peak Phone, which means manufacturers need to find other areas of growth.  Appcessories offer a new product stream, adding an estimated $130 billion by 2020.  They also open up potential for other verticals which have struggled to take off, particularly personal health and smart homes.

This year we are already seeing fantastic levels of innovation.  In 2014 we’ll see the start of growth as larger players stake their claims and bring the efficiency of their supply chains.  The hardware tools are coming, with low cost development tools allowing anyone to innovate.  If the major smartphone and tablet vendors grasp the opportunity, producing stable platforms and development tools, then the sky’s the limit.

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