Devices market to triple by 2018 says L2
“All that is useful is ugly” according to the French poet Théophile Gauthier, who believed that all beautiful things were useless since they did not have direct utility. He would not have lasted long in the fast-growing wearables market.
According to a paper from L2 Business Intelligence for Digital called Wearables 2014, “It is only recently that such accessories offered newfound utility … [thanks to] … low-power chipsets, cheap sensors, and ubiquitous network access. Adornment, like bracelets, glasses and footwear, can now become beautiful and useful wearable products.”
The report defines a wearable as “a digital service designed to be carried or worn on a user’s body. It is frequently employed to capture behavioural data, monitor health and fitness metrics, or enhance how the wearer engages with his or her surroundings.” Right now, the most familiar are fitness trackers like Fitbit (bracelets or watches monitoring metrics, daily steps, burnt calories, heart rate), smart watches (like the Samsung Galaxy Gear that can make calls, videos, photos, run apps) and Google Glass (that also makes calls, takes videos and photos and connects to the Internet).
The study claims that the market is already growing, with 90 million wearables expected to ship according to forecasts from companies such as Business Insider, ABI Research, IMS Research, and Juniper Research. By the end of 2018 the figure is expect to more than triple — to 300 million.
Yet for all the hype, this is still a technology in search of a wider market. According to the paper “Ready to wear … tech?” from Kantar/TNS Global, for instance, even though 75 per cent of people are aware of wearables, less than 20 per cent express interest in using them — and only two per cent own them.
So what is holding them back? At this stage of the product cycle expense remains a key impediment for more than half of those surveyed. Privacy is a concern for about a third of consumers and, despite the emphasis on design quality, aesthetics is still an issue for one in ten.
But none of these are deal-breaker in the long term. For example, the tech sector has a permanently diminishing relationship with cost. Google Glass may well set you back $US1500 but the Samsung Galaxy Gear comes within the much more digestible range of $US200 and $US350 — depending on the model.
The Kantar/TNS Global paper concludes, “Judging from the study’s results, the road to acceptance for wearable tech runs through health and fitness and social networking”. In fact, 34 per cent of people surveyed said that if they were to use wearables, it would be for monitoring health or communicating with friends.
That means some wearables have a future — but certainly not all. Fitness trackers and healthcare together already represent 75 per cent of the global market. Clear leaders are emerging within the categories. According to Catalyst, Fitbit owns 56 per cent of the fitness trackers market, and Samsung is leading smart watch race with 54 per cent of the market. One cautionary note, however: as the emergence of smartphones taught companies like Nokia and Research in Motion, such leadership can prove dangerously fickle.
Even some high-profile wearables may simply be fads. There are some real doubts about the long-term viability of Google Glass, for example — according to a YouGov Omnibus poll, 59 per cent of Americans interrogated said they would not buy them.
L2 argues that the ecosystem will once again play a key role in determining success, with smarter operators in the tech sector aligning with luxury or fashion brands. Indeed that is clearly already happening with collaborations between Nike and Apple, Fitbit and Tory Burch, Google and Fossil.