For much of 2014, wearable technology has been the subject of great hype and even greater skepticism, fueled by speculation around whether these emerging devices will have a positive or negative impact on our lives. Some people think that wearables are a fad. Others claim they have no impact. However, many of us believe that wearables are here to stay! We suspect that the ability to collect data about ourselves and our surroundings are phenomena that will change our lives forever for the better, and that they will not go away anytime soon. We are now at the tipping point of the wearable revolution. Here are some of my predictions for what we will witness in the rest 2015:
1. Wearables will go mainstream: One in five American adults already owns a wearable device, according to a PwC report. That’s on par with tablets in 2012, when the adoption rate sat at 20% after just two years on the market. Today more than 40% of Americans own a tablet, and it seems reasonable to expect similar adoption patterns with wearables.
Enterprises will play a major role in subsidizing and mainstreaming wearables in 2015. Many enterprises already embrace health and fitness trackers as part of their corporate wellness programs. We will see more companies subsidize smart watches and fitness trackers, especially as these products become more cross-functional. Imagine the benefits that wearables could bring to organizations if their employees could receive texts or emails on their wrists or be able to access company’s applications and documents through these devices 24/7. This could directly impact employee’s responsiveness and productivity.
In addition, if wearables could even slightly improve the health and wellbeing of employees, cost savings for employers could be significant. Interestingly enough, employers and employees’ incentives seem to align in this regard. While employers could benefit from reduced healthcare costs, employees could also enjoy lower health insurance fees in addition to increased health and wellbeing. In fact, 70% of consumers reported that they would wear employer-provided wearables in exchange for a break on their insurance premium.
2. Transition from tracking to changing behavior: Critics of wearables complain that these products merely track and present data about the past without any predictive analysis or mechanisms to help users change their behavior for better. This criticism has merit, but it is important to note that passive data tracking is only the first phase of the wearable movement, and a necessary building block for what can be done next. Changing a user’s behavior and providing her with predictive insight would not have been possible without going through the first stage of passive data tracking. In near future, with machine learning and big data analytics, wearables and digital health companies could significantly help users to take appropriate actions and make healthier decisions real time.
3. Coupling of wearables & Internet of Things (IoT): The line between wearables and the IoT will get blurry in 2015. As users acquire more connected devices and start collecting more data about themselves, their homes, and their surroundings, their needs will change rapidly. Imagine the potential experience of a user with five or more devices — all of which collect data about her and her environment. It’s easy to see that the marriage of wearables and the IoT could create new problems such as reconciliation of data as well as connection and communication across devices, but the flip side of that is the potential for numerous new market opportunities.
4. Explosion of healthcare wearables: While consumers have not yet embraced healthcare wearable technologies in large scale, they are intrigued. On the supply side, super talented physicians, scientists, and engineers from top universities and labs are working on commercializing health projects and offering affordable digital health products to those with medical needs. In 2015 we will see more of these wearable healthcare products become available to patients with diabetes, Parkinson’s disease, and heart failure.
2015 may also see new regulations and laws related to these breakthroughs in science and technology. The inevitable disruptions happening in the healthcare system will force lawmakers to bring down related FDA requirements. This will help increase the adoption of healthcare wearables, and it may also encourage insurance companies to pay for the costs of those healthcare wearables that have proven outcomes.
5. More crashes and burns as well as mergers and acquisitions: Based on venture capital research by CB Insight, $1.4 billion in venture funding has been invested in wearable companies since 2009, with over one-third of the money invested in 2014 alone. There were also millions of dollars raised by wearable startups on crowdfunding sites such as Kickstarter and Indiegogo.
In general, the odds of success for a startup are really low. Building a successful and scalable wearable business is even more challenging because of the complications introduced by mixing hardware and software technologies together. Thus, many wearable and IoT startups could fail miserably in 2015 and cost their investors a lot of money. Those companies that do succeed will witness a lot of mergers and acquisitions in this sector. The acquisition of Basis by Intel in 2014 was one of the first transactions in the wearable space. Startups that solve one vertical problem really well could be attractive acquisition targets. The reason is that over time, various functionalities would fold into only one device that user wants to wear 24/7. More mature tech companies such as Apple, Google, and Salesforce, who are hungry for a piece of the wearable market, could snag a lot of small, successful wearable and IoT players.
Only time will tell what will really happen for the rest of the year in the fast growing market of wearables. Feel free to share this post and your view on any of the topics mentioned above.
[This blog is my personal view of the wearable market and doesn’t reflect the view of the organization I work for.]
By: Yasi Baiani