By Maxine Bingham, Editor-in-Chief
Wearables are a hot topic when discussing the Internet of Things. Projections range from billions to hundreds of millions, depending on the skepticism of the projector.
Wearables are objects worn on the body, or can be in the body, that communicate data back and forth wirelessly or via WiFi. Google Glass is a famous example, so is the publicity generated by luxury brands such as Barneys, Ralph Lauren, Tory Burch and Diane von Furstenberg.
Wearables include bracelets, watches, fitness trackers, medical devices (such as heart monitors or cameras one swallows in intestinal testing), heightened reality, and, experimentally, tattoos.
Industry analysts and watchers differ in their views of this emerging market.
For example, according to an article in The Economist, by 2013 the worldwide market of fitness wearables from Fitbit, Nike and Jawbone (with 97% of the market) was $238M, and, according to research by Endeavour Partners, one-third of users discard their fitness trackers after six months.
On the other hand, top industry analyst firms such as IDC and ABI Research believe that wearables are quickly advancing from early adopter to mainstream status. International Data Corporation (IDC) predicts that wearables “took a huge step forward over the past year [and shipment volumes will exceed 19 million units in 2014, more than tripling last year's sales. From there, the global market will swell to 111.9 million units in 2018, resulting in a CAGR of 78.4%.”
Because ABI Research is a believer, it is predicting that the enterprise wearables market will reach $18B by 2019, growing from “a CAGR value of 56.1% over the next five years, becoming an integral part of enterprise mobile enablement strategies. As expected, the North American region will be the largest and grow at a CAGR value of 39% over the next five years. More interestingly, the Asia-Pacific region will become the second largest market outpacing Europe by 2019 with a CAGR of 90%.” ABI goes on to note that they have identified six kinds of enetrprise wearable devices: smart glasses, cameras, smart watches, healthcare, sports and activity trackers, and 3D motion trackers. Healthcare wearables, smart glasses, and smart watches will be the dominant form-factors purchased by the enterprise and used by employees.
One indication that this is a serious market is that semiconductor companies such as ARM, Freescale and Intel are committing resources to creating tiny components that are aimed at small, body-size IoT applications.
Some of the issues I see is that (1) many consumer devices require fairly costly subscriptions for functionality – it’s the razor/razor blade scenario, which may be negatively impacting both sales and retention, (2) prices are high for devices such as Google Glass ($1.5k) and are only affordable to an elite (one can only image what Barney’s bracelet will cost), (3) one must pay for wireless/Wi-Fi connectivity which again adds to the cost, 4) luxury retailers appear to be using wearables more for PR than widespread adoption and 5) enterprises may be slow to adopt these devices due to unresolved, and serious, security vulnerabilities when objects are connected wirelessly and over the Internet.
Thus, while I am a bit skeptical at the rate of growth, wearables are gathering steam, although widespread adoption will depend upon useful, productive functionality, price and security.