Current smartwatches can recognise a limited number of particular activities, including yoga and running, but these are programmed in advance.
The new method, developed by researchers from University of Sussex in the UK, enables the technology to discover activities as they happen, not just simply when exercising, but also when brushing your teeth or cutting vegetables.
Traditional models "cluster" together bursts of activity to estimate what a person has been doing, and for how long, researchers said.
The new algorithm tracks ongoing activity, paying close attention to transitioning, as well as the activity itself. In the example above, it assumes that the walk will continue following the short pauses, and therefore holds the data while it waits.
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"Current activity-recognition systems usually fail because they are limited to recognising a predefined set of activities, whereas of course human activities are not limited and change with time," said Hristijan Gjoreski of the University of Sussex.
Future smartwatches will be able to better analyse and understand our activities by automatically discovering when we engage in some new type of activity.
"This new method for activity discovery paints a far richer, more accurate, picture of daily human life," said Daniel Roggen of University of Sussex.
"As well as for fitness and lifestyle trackers, this can be used in health care scenarios and in fields such as consumer behaviour research," he added.