As expected, wearable technology remains a hot topic in the industry – taking center stage at the 2015 International CES. As such, it seemed appropriate to revisit the topic of wearables and assess the current State of the Market.
Similar to previous years – the bulk of wearables activity continues to revolve around health & fitness activity tracking and monitoring, and smart watches. According to the wearables database of Vandrico Inc., there are currently 287 wearable devices that fall across a range of categories, with Lifestyle representing the largest category at 61 percent of the wearables. Lifestyle devices are defined as devices used on a daily basis and designed to provide continuous benefits to the user – with most fitness activity monitors falling into this category as well. In fact, more than half of all current devices on the market contain an accelerometer to measure movement.
Not only are the overall number of wearable devices is growing, the number introduced each quarter is also accelerating – with an average of 30 new devices per quarter during 2014, up significantly (in fact, more than double) from 2013.
Along with the availability of more devices is the growing adoption of wearables. CCS Insights predicts that wearables will grow from 9.7 million in 2013 to 135 million in 2018, comprising of 68 million smartwatches and 50 million smart bands, while IDC predicts 19.2 million wearables at the end of 2014, growing to 111.9 million units in 2018. Finally, TECHnalysis Research forecasts nearly 20 million devices in use in 2014, growing to 103 million by 2018. While the numbers vary somewhat between firms – one thing is certain: wearables represent a multi-billion dollar industry.
Trends: Wearables Are For More than Your Wrist
Traditionally, most wearable devices are designed to be worn on the wrist – however, over the past 18 months, there has been significant growth in devices that are worn in different areas of the body – from head to toe (foot, actually) to address a variety of applications.
However, to date, wrist-worn wearables represent the largest portion of lifestyle devices and are likely to remain so for the foreseeable future.
Wearables in the Enterprise
Another area where wearables are diverging is in the market segments they address. Given that the majority of devices currently targeting the consumer – there is growing interest in how wearables can add value, improve productivity, efficiency and customer services and drive new business opportunities in the enterprise space.
Smart glasses which typically include a small display, camera, compass, motion-tracker and audio system to display or mirror information such as texts (SMS), email, mapping GPS, and video data – are already playing a key role in a number of segments:
Challenges Remain Significant
Despite the growth in available wearables and adoption – there remain significant challenges to the wearables market.
The problem with the current state of wearables – let’s call them wearables 1.0 is that they tend to do only one thing – they either provide information to the user or they collect information. As such, users are disengaging from their devices. According to Endeavour Partners – one-third of U.S. consumers who have owned an activity tracker stopped using the device within six months.
So how do you sustain engagement? By transformation the insight gained from the devices into action. We will call this phase wearables 2.0. In this phase, not only will these devices provide and collect information, but analyze and recommend actions.
For instance, I am currently training for a ½ marathon. While I appreciate the capabilities of devices that provide information on heart rate, distance and pace, it would be even better if my device could take into account other conditions (such as the weather) and body temperature to provide recommendations on necessary recovery steps (rest time, fluid intake, diet, etc.) or even on training plan modifications – especially if I am able to verbally tell the device how I am feeling (tired, energized, etc.).
The key to making this happen is through the use of Big Data – which would take my information, compare it to other data sets (same age, sex, weight, etc.) and then provide a custom recommendation in real time.
Another notable challenge to the wearables space is the Smartphone – which is already enabled with a number of features, capabilities and applications that in many cases can replicate what is available with most wearables. More importantly – a very large percentage of the population already owns one. As such, it will be critical that wearables provide a distinct value proposition that is separate and different than the smartphone – although the smartphone will likely still act as the “hub” to collect information.
This is where technology such as stretchable electronics that is applied like a Band-Aid with embedded sensors that collect data such as body temperature, heart rate, brain activity, and exposure to ultraviolet radiation and communicates with a wireless device through near field communications excels.
Unfortunately, this distinct value proposition will likely come from unique applications that apply only to a small segment of the market.
Other challenges include price points, battery life, privacy, security, lack of compatibility with different operating systems, and frankly, a lack of aesthetics.
I’ve written about the wearable tech market in two other posts: The 4W’s of wearable tech and whether voice was the key to wearable technology. In both blogs, I concluded that the key to wearable tech will be to design a product that fits seamlessly and unobtrusively into a persons’ life. I also concluded that the biggest challenge will be to keep the user engaged and continually use the device – which is proving true. Finally, I would add that wearables need to either improve my lifestyle (health, fitness, happiness, time management, social interaction, etc.) or from an enterprise perspective – make my job easier.
While the consumer market remains the focus of most wearables development, it will likely be the enterprise that derives the true value of wearable technology.