Opinion pieces on business & economic issues
Emergence of Wearable Devices and Factors for Success
July 23, 2013
Wearable devices are the next generation in smart devices. These cutting-edge products merge familiar items like watches, glasses and clothing with information technology, ushering in a new "portable to wearable" mobile trend. Major IT firms have jumped on the bandwagon, spearheading growing interest in the wearable revolution. MIT Technology Review included the "smart watch" among its top ten technologies of 2013 and Credit Suisse forecast that the wearable watch market would skyrocket from 3 billion dollars in 2013 to 42.6 billion dollars by 2015.
Fictional wearable devices have been around for quite some time. The iconic Dick Tracy comic strip by Chester Gould caused a sensation when it introduced the two-way wristwatch worn by Dick Tracy and the police force in 1946. In the 1984 blockbuster, Terminator, the main antagonist had "computer eyes." However, by comparison, commercialized wearable devices thus far remain heavy and cumbersome, while their limited functionality has made it difficult to establish a market. Expanded use of smartphones, recent developments in hardware technology and improvements in design however, are bringing wearable devices closer to reality.
The wearable device market is still in its infancy. Therefore, to expand and strengthen this market, companies must refrain from hasty decisions and carefully scrutinize the market from a long-term perspective. Companies also need to consider growing consumer skepticism and technology fatigue, and deploy a consumer-focused approach.
In order to successfully expand the market, companies approaching this market need to deal with four factors: consumer needs, technology, economics and regulations.
First, companies need to develop services with effective value and mass appeal. Future wearable devices can be roughly divided by functionality into healthcare and information/entertainment. The current expectation is that wearable devices will make a major mark in the healthcare monitoring field.
Watches have the advantage of being light and easy to access, with no need to take out a phone or wallet to make a phone call or payment. Some watches can even provide 'sensatory' notification services that customize the notification to the user or type of information. Smart watches can thus be used as a new platform for healthcare services. Despite the rising interest in healthcare, people tend to be passive in exercising. Some health device makers are thus looking into widening the consumer pool by providing "coaching services" and "data based analysis" via wearables.
Although eyeglass-type products have the advantage of enabling the user to shoot videos and take pictures whenever and wherever they want while providing augmented reality services, privacy concerns and limited consumer demand for continuous video and photography mean that glasses will likely be used more for augmented reality. Through its website #ifihadglass for Google Glass, Google found that there was a high demand for augmented reality-based education, games and translation services. Market research firm IHS iSuppli found that the success of Google Glass is dependent on whether Google is able to develop easy and convenient augmented reality-based applications. According to IHS iSuppli, if developers fail to take advantage of augmented reality, sales of Google glass could stop at just 1 million by 2016. However, if they are successful, it will create a market to sell over 10 million Google Glasses.
Second, technical barriers with respect to batteries, weight, input methods and displays must be resolved. Wearable devices must be wearable at all times, making battery run-times and weight vital. Frequent recharging will drastically lower the products' convenience and appeal. Furthermore, although diverse input methods like voice, gesture, touch and status recognition have already been realized, the technology is still immature. Voice recognition is difficult to use in noisy environments and eyeglass-type displays offer limited resolution, legibility and visibility.
Third, wearable devices are still supplementary to smartphones, making price the key to expanding the supply base. Watches are expected to be sold for under 200 dollars and eyeglasses for approximately 500 dollars, High priced products with enhanced performance and usability are also expected to increase. Italy's I'm SpA uses its own OS in its new smart watch, I'm Watch, positioning it as an independent product. Furthermore, the applications ecosystem must be vitalized to enable consumers to use diverse services at low prices.
Fourth, preventative measures to minimize the negative impact and misuse of wearable devices must be established. Certain innovative services for wearable devices have instilled fear into consumers. Devices that allow users to take pictures and videos with the slightest gesture or sound provide access to people's personal information through face recognition, presenting major concerns for the protection of privacy. With countries across the world implementing regulations even before Google Glass has launched, companies are already anticipating social resistance as a major variable to the expansion of the market.
By 2014, innovation in the wearable device market is expected to gain speed with the explosion of new wearable devices mostly in the form of eyeglasses and watches. For the popularization of these devices, it is vital that the foregoing needs are satisfied. To expand sales, functions that leverage the advantages of wearable devices and innovative hardware are needed. Grafting the advantages of wearable devices can improve the uptake of wearables in the health care sector, where demand is low despite high consumer needs. Finally, as wearables are worn on the body, safety must be a priority, while a new culture for the use of wearable devices must be established in consideration of social customs and negative effects.
The column originally appeared in JoongAng Daily