Editor's note: This piece on the Internet of Things wearables market was written by editor/curator Josh Molina. It first appeared in our Inside IoT newsletter last month, and is an example of content that's usually exclusively available to our Premium subscribers.
Just like the rapid advancement of the smartphone over the last two decades, the market for wearable IoT devices is exploding. Despite some early missteps, the demand for these devices is not expected to cool off anytime soon.
Wearables come in all shapes and sizes, for a wide cast of people, and even pets. Data-collecting gadgets come in in the form of watches, wristbands, shoes, hats, bicycle helmets, jackets, jewelry, anti-slouch wearable patches.
Like so many Internet of Things items, however, the products are in a state of evolution. Manufacturers are trying to balance convenience with necessity, all while making wearables fashionable and inconspicuous.
"You are at the edge of a new revolution, where from the cell phone, digital technologies, together with all kinds of sensors and actuators and apps and software are moving from your devices onto your body," said Joanna Berzowska, associate professor and chair of the Design and Computation Arts Department at Concordia University, during a 2016 Ted Talk. "Wearable technologies are your future. You are poised at the edge of this really, really exciting and really scary technology revolution."
You've probably heard a lot of mixed information about the state of wearables so far. Some consider them a massive flop. The recent shuttering of fitness wearables manufacturer Jawbone, the first company to produce an activity monitor worn on the wrist, led many to wonder whether the market wasn’t as strong as the hype had predicted. Indeed, a couple of years ago, everyone who was into fitness trackers was wearing a Fitbit. Some consumers shifted away for the more versatile Apple Watch. Intel, who made the Basis smart watch, recently decided to move from selling the products to focusing on augmented reality. The Galaxy Gear smart watch had a 30 percent return rate after six months.
But these early missteps aren’t necessarily predictors of the wearable market’s future. According to the International Data Corporation Worldwide Quarterly Wearable Device Tracker, the worldwide wearables market reached a new all-time high in the fourth quarter of 2016. Shipments reached 33.9 million units in the fourth quarter of 2016 a growth of 16.9 percent from the same quarter the year prior. Overall shipments for the entire year grew 25 percent because new vendors entered the market. In 2016, about 102.4 million wearable devices shipped around the globe.
If the past is any indication, the wearables industry will move past the fads and into the essentials. For example: We don’t have new cars with giant fins on the back anymore because car manufacturers realized that consumers cared more about fuel efficiency than ornamental features. The future of wearable tech could shift from what's fashionable and fun to what's going to make you healthier, or even save your life.
Smartwatches are expected to play a huge role. Global analyst firm CCS Insight estimates that 43 million smartwatches will be shipped in 2017, with sales doubling over the next four years to 86 million units in 2021.
"It's clear that companies like Apple and Samsung have recognized the success of performance fitness watches and have implemented more and more fitness features into their smartwatches to broaden their appeal,” said George Jijiashvili, wearables analyst at CCS Insight. "There's currently an air of cautious optimism among smartwatch makers, especially as sales of fitness bands appear to have stalled.”
The next generation of wearable devices may be able to warn you that you’re catching the flu or coming down with some other illness
Health monitors have emerged as the next generation of wearables. While Kickstarter campaigns to fund the next snazzy wearable will continue, large medical corporations will fuel the future of wearables because there's a financial benefit to collecting the information. Health data allow doctors to build better patient profiles and predict then diagnose and treat disease, much sooner than before. Eventually, humans could even swallow smart pills, that will relay data from the insides of our bodies back to an app and a medical professional for analysis.
“The promise of wearables is in the ability to detect and therefore treat illness at an earlier stage,” according to a 2017 report from Stanford Medical Center. “…there’s a market opportunity for healthcare organizations to enter the wearable market by delivering FDA-compliant, HIPAA-compliant devices producing medically robust and relevant data.”
Going forward, just like the smartphone, wearables are going to get smaller, more efficient and provide greater value for customers. Companies have an incentive to embrace better, more fashionable wearables because all of the data collected provide robust advertising opportunities once linked to smart apps. Whether it's a major company such as Apple, or medical institution like Kaiser, the data collected will bring immense savings, and profits, and ultimately convenience and better health.
Like everything with the IoT, however, the industry and its products are rapidly evolving. While some companies will abandon wearables in favor of other priorities, there's far too much value in connecting the human body to a computer and using the data collected to improve people's lives.