Wearables : Worthless Fad or Game Changer ??

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As differentiation in the smartphone space becomes increasingly difficult, top-tier vendors are looking to wearables as a way to bolster their positions – and generate additional revenue on top of often low-margin handset sales . With about 35 m wearable devices in 2013 wearable technologies are about to cross the chasm and generate sustainable growth in the years to come. The ecosystem of widely adopted smart phones, enabling technologies such as low power sensors, Bluetooth 4.0, highly integrated M2M modules, and cloud computing, as well as new app stores for wearables is getting into place. Innovative companies and start-ups across the globe are nurturing this new megatrend. Big brands like Apple, Samsung, Google, Nike and carriers will further push mass market adoption. Major players from other industries like healthcare, automotive, entertainment etc. are about to enter as well.

Wearables are quite a new phenomenon in the mainstream and in contrast to making people curious about new technical solutions it is much harder getting them to adopt wearable technologies on an ongoing base. Maintenance is another factor that decides over long term customer satisfaction and in the case of wearables, having to charge the batteries is one of the hurdles that make or break a relationship. Wearable technology is related to both the field of ubiquitous computing and the history and development of wearable computers. With ubiquitous computing, wearable technology share the vision of interweaving technology into the everyday life, of making technology pervasive and interaction friction less.

Despite the buzz surrounding Google Glass last year, generally the market appears to have settled on two preferred form factors: smart watches and smart bands (with some products moving toward straddling both). The former is not a new category, although it has hardly been overburdened with success so far. Perhaps the most interesting development in this space is Samsung’s choice of Tizen to power its Gear devices – enabling it to claim continued support for the platform, while not being so hamstrung by its lack of apps. Currently, sports and activity trackers account for the largest chunk of wearable technologies shipped today. Smart activity trackers are widely available, and the device’s trendy and stylish appearance makes them very popular with a broad range of customers. It is estimated 61% of the wearable technologies market is attributed to sport/activity trackers in 2013.

The increased presence of vendors such as Sony, Samsung, LG and Huawei in the wearables space could create challenges for specialised players such as Pebble (smart watches) or Fitbit (smart bands) which, while having first-mover advantages, are now faced with competition from companies which can potentially deliver scale quickly. There are also challenges in driving long-term engagement with wearables, particularly with regard to smart bands. While these devices are proving appealing to the fitness-conscious, there is little evidence that these can support additional use cases which could drive wider adoption.

Sony’s Lifelog app is a good first attempt, and vendors really need to look to drive innovation in supporting apps in order to appeal to a wider customer base.Smart bands benefit from the fact that they are generally being positioned as smartphone companions, meaning much of the intelligence is offloaded onto the senior device – enabling a lower bill of materials, and therefore lower price points. But there are a number of challenges to overcome. Battery life in some first-generation products is poor, and in many cases the hardware design is not appealing enough to become a mass-market proposition.

And it is also unclear if there is scope for operators to benefit from the growing interest in wearables. Operators have invested a lot in machine-to-machine communications that go beyond connectivity to look at service enablement platforms in order to add new services, such as healthcare and connected cars.Wearable technologies will have an important role in all these new service areas. In order to exploit these opportunities, commercial and innovation partnerships are fundamental to bring new ideas to the market and test potential business models.

Telefonica’s partnership with LG, Sony and Samsung will be interesting to watch, as it looks to ensure the operator is not sidelined in the new product category.The spectrum of partnerships includes the entire wearable technology value chain. For example, collaboration with specialised product solutions providers, such as medical device manufacturers or fitness device designers, can help operators with their offers. But, collaboration with fashion and design brands may become more relevant in order to get closer to consumers.

Apple has a great history in design and for its new watch the company paid close attention to build a device with a look that fits their customer’s personal style Similar to its competition, Apple decided to take advantage of a colorful and high-resolution display that will deliver a great experience and also lead to a frequent use of the watch throughout the day. Although the frequent usemean the watch’s battery life will be limited, charging it is easy with the magnetic, inductive connector. Even if this design decision sounds simple, it’s the small differences in usability that have been important for Apple’s success over the last decades.Industry pundits sees the Apple Watch as “a product that can dramatically increase the adoption of smartwatches, because of its completely new approach for user interaction increasing user satisfaction.

Since wearable computing devices let users go hands-free, there are a lot of ways they could be useful at work. For emergency personnel, search and rescue teams and mobile warehouse workers, wearables can provide high-tech mobility and tracking features. Smartglasses could be useful for technicians who need to consult a manual or a set of schematics while performing repairs.

Wearables may also be able to remotely manage equipment, such as machinery on an assembly line, making the workplace safer for employees.Workers who need to wear special suits, such as environmental disaster teams, could have hands-free access to data via smartglasses or a smartwatch. Any user who needs instant access to important data – members of sales teams, real estate agents, lawyers, rural doctors, law enforcement and fire fighters, military personnel and more – can benefit from using wearables in the workplace.

Wearable computing devices haven’t gone mainstream yet, so it’s hard to say whether they definitely will or won’t end up in the enterprise. If you consider the rise of smartphones and tablets a harbinger of wearables’ trajectory, then they could be in your office fairly soon. But consumers are fickle and difficult to please. If wearables don’t take off with consumers, they may never make it to the enterprise. If users do start wearing smartglasses and smartwatches to the office, it could pose some problems for IT.

Plus, so little is known about how wearables will work that it’s tough to say if or how you’ll be able to manage them. Will you be able to apply configuration profiles or mobile device management settings? How will you keep corporate data from leaking from someone’s smartglasses? There aren’t answers to these questions yet.

M2M technology that enables communications between wearable devices and the end points connected to the Internet will play a key role in boosting the uptake of wearables. The truth is that beneath the plastic covers –whether sober or colourful–of these accessories lie great and sophisticated data solutions.The heart rate, the calories burnt, the number of steps taken each day, the pulse, how fast certain movements are carried out… all that local information is built up and can be uploaded to the cloud to go through an analysis system. Data can be analysed individually and compared with the user’s own history, or else they may be assessed collectively. Metrics help in setting personal goals, being more physically fit, eating more healthily or just knowing whether our health is within average.

There is also a strong “verticalization” and specialization on the market, different hardware pieces focused on sports, health, content.The key is to provide very well defined value proposition instead of a generic monitoring. The challenge is integration. Being able to mesh together all the huge amount of information received from these devices in a central interface. Here we talk about the semantics of data. I want my smartphone, my sports band, my internet hub and other relevant information like how much I sleep or what I eat all mesh into a semantic that allows to help me gain insight into leading a healthy life.

Wearable devices will be key to so-called “ubiquitous computing”. And, as technology continues to advance in areas such as material science and nanotech, the real opportunity may be in so-called smart fabrics.In any case wearables will be big business poor battery life or not. By 2017, Berg Insights forecasts that 64 million of these gadgets could be sold, vis-à-vis 8.3 million sold in 2012.

In turn, Juniper Research raises the first figure up to 70 million gadgets, while the ABI Research consulting firm foresees that by said date there will be almost 170 million wireless sensors available in the sports and health sectors. It’s a good foundation for things to come provided Telcos can bundle in wearables into their M2M solutions roadmap .

Sadiq Malik ( Telco Strategist )

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