Are wearables more than a fashion trend?

To date, the wearable devices we have seen and heard about have been mainly limited to smart watches and fitness tracking devices, with almost everyone now seeming to have the latest Fitbit, Jawbone or FuelBand on their wrist. But in the coming years, they are set to become much more diverse as well as prevalent in our daily lives.

With some industry experts projecting shipments at as much as 171 million by 2016, these devices are likely to infiltrate much wider ranging aspects of our personal lives, from fitness and wellness, to medical and healthcare, as well as the ‘infotainment’ sector. Business uptake is expected to be even greater, with Forrester estimating that the company-provided wearables market will grow larger than the consumer market within the next five years.

Set against this backdrop of market optimism, however, are the increasing reports of consumers’ reluctance to embrace the new technologies, with studies pointing to obtrusiveness, compatibility, effectiveness, and psycho or socio-economic barriers as just some of the deterrents to adoption. Thanks to the prime position it has enjoyed in the past year’s news agenda, privacy is also understandably a major concern for many consumers. Fast growing adoption of wearables and technology implants will continue to increase the amount of personal data being gathered; combine this with our seemingly always-on connectivity to the internet and we risk our online identities being vulnerable in an unprecedented fashion.

So what exactly is the current scale of the wearables opportunity and just how ready are we for it?

Measuring the opportunity

With everyone clamouring to have their say on the ‘next big thing’, figures on the future scale of the wearables market abound. Berg Insight, for example, expects the worldwide sales of wearable devices to be 64 million units by 2017. Alternatively Credit Suisse analyst Kulbinder Garcha predicts that the market will increase tenfold to as much as $US50 billion over the next three to five years. So while they might not agree on the exact figures, the one thing they can agree on is that the opportunity will be huge.

The demand fueling this growth is expected to come from a wide audience, with the three main drivers for usage being consumers, businesses and the healthcare sector in general.

Consumer demand

For consumers, the two best established wearables markets are currently in fitness (wellness and personal health tracking), and infotainment electronics (smart watches).

Driven by a variety of factors, from consumers working towards personal fitness goals, slimming down for better health and body image, and monitoring health, Gartner has predicted that worldwide revenue from fitness and health wearables alone will grow from $1.6bn in 2013 to $5bn in 2016.

Meanwhile, while consumers might initially have been slow to adopt smart watch technology, ABI Research reports that 1.2m such devices were shipped in 2013 and Generator Research anticipates that revenues are expected to grow up to $60bn by 2018. As well as the anticipated Apple iWatch, Samsung and Microsoft have also announced plans to release their own smart watch devices, fuelling this growth further.

Business demand

According to Forrester, company-provided wearables represent the next phase of the mobile revolution and are set for large scale growth in the coming years as they become a crucial asset for businesses, enabling “workers, partners, and customers to experience new levels of immediacy, simplicity, and context in their mobile computing experiences.“  In terms of a timeline, businesses are expected to begin investigating the wearables opportunity from 2014 to 2016, with wearable devices being mainstream in the field by 2017.

As demonstrated at the Consumer Electronics Show 2014, wearables for business were showcased for sectors such as healthcare, worker safety and retail. These included devices to track employee activity levels in order to lower insurance rates, wearable chemical sensors to help first responders and military personnel identify changing environmental conditions, and hands-free communications devices.

Healthcare demand

There are several areas in the public sphere where wearables might find a suitable application, however it is in the healthcare sector, and specifically care for elderly people, that some feel they will have the most potential. As the world’s population ages at an accelerated rate (the World Health Organization estimates that between 2000 and 2050 the number of people aged 80 years and over will have quadrupled to 395m), healthcare costs are increasing. This is a particular problem for western European societies where there is a high proportion of over 65 year olds. Wearables have the potential to revolutionise the cost of healthcare, enabling health to increasingly be monitored in the home rather than at a healthcare facility.

By 2012, the worldwide market for wearable medical devices already stood at $US2bn and this is expected to soar to $US5.8bn in 2019. Further penetration by these devices might, however, depend on the willingness of healthcare facilities to promote them, as well as on insurance companies to fund them.

Addressing the barriers to adoption

Despite all the stats and figures cited by analysts, a recent survey by Harris Interactive shows  only 3 per cent of US internet users own any wearable smart devices. In fact, over a third (36 per cent) are unsure what might ever induce them to do so and almost a fifth (19 per cent) say they would never consider purchasing a wearable device. Over three-quarters of respondents had at least one concern about wearables, with price, privacy and utility being the main ones.

From the perspective of a security company, our priority over the next year will be continuing our push for full transparency and standardisation over what data is collected by these devices, how it’s being used, and how users can maintain control of their own privacy. Just as there are already solutions that empower us to protect our privacy on current non-wearable devices, these need to be carried through to all manner of future connected devices, so that privacy control eventually becomes device agnostic. 

It is clear that wearables will bring a fundamental and inevitable change to our lives in the future, and they undoubtedly have the potential to provide wide-ranging benefits across a number of sectors. 

But uptake will be entirely dependent on the above demand coming to fruition, and if we ever want to see the technology move beyond its infancy, the industry will need to allay the very real concerns that still exist around its use and address the multiple barriers to adoption. Only then will consumers and businesses truly embrace the wearables phenomenon.

Yuval Ben-Itzhak is the chief technology officer for AVG Technologies