Whose wearing what? Key players in wearable technology

An analysis and assessment of the key players in the Wearable Technology Ecosystem.

Who are the key players in the Wearable Technology Ecosystem?  To answer this question we must first understand the different roles and relationships that make up the wearables technology ecosystem, this includes the following types of organisations: research institutes; industry associations; designers & brands; system or technology platform providers; and specialized manufacturers.  Some companies are primarily focused on a single organisational role, for example: MIT research institute and Stanford Center for Medical Mobile Technology; designer brands such as Adidas and Ralph Loren; technology or infrastructure providers such as Intel and IBM; or specialised contract manufacturers such as Jabil and Flextronix (Flex).  Other companies, such as Apple and Samsung span across a range of roles from brand, design, system and technology platforms, and manufacturing.  Although established global companies such as Google and  Intel have the advantage of size; there are a number of start-ups such as Imprint Energy that have the potential to significantly impact the market.

Research Institutes and Technology Incubators:

• MIT Wearable Computing Lab
• Stanford Center for Medical Mobile Technology
• UC San Diego Center for Wearable Sensors
• Georgia Tech Wearable Computing Center
• Drexel University Shima Seiki Haute Laboratory
• Electronics Laboratory Wearable Computing Group
• Wearable World Laboratory
• A host of other North American, European and Asian entrepreneurial universities and research institutes (especially in USA and PRC)

Technology, Infrastructure, and Platforms:

• Apple 
• Google (Alphabet)
• IBM
• Intel
• Microsoft
• Samsung

Brands & Designers:

• Adidas
• Apple 
• Ralph Lauren
• A host of other smaller designers/brands

Specialised Manufacturers / Supply Chain Managers:

• Flextronix (Flex)
• Foxconn
• Jabil
• A host of other smaller companies (many based in PRC)

Technology based Start-Ups:

• Imprint Energy
• OMSignal
• Quanttus
• A host of other technology based start-ups targeting the wearables market (check out the Dow Jones Venture Source or CBInsights Venture Capital databases for a more complete listing).

Industry Groups & Associations, and related information resources:

• Consumer Electronics Association - Consumer Electronics Show
• CNET Wearable Technology Forum
• CTIA
• IDTechEx Wearable Conference
• Tech.co Wearables
• Application Developers Alliance (IoT Report)
• Wearable Technologies Conference (Wearable Technology Network)
• Wearable Tech Insider
• Wearable Technology in Enterprise Summit (BrainXchange)
• Plus the usual suspects ... IDC, Forrester Research, etc.

For a more extensive list of companies that participate in the Wearables Technology Ecosystem refer to "The M2M, IoT & Wearable Technology Ecosystem: 2015 - 2020 -Opportunities, Challenges, Strategies, Industry Verticals and Forecasts" report.  For a more extensive list of wearable products refer to the Vandrico Wearable Tech Market Report.

Wearables is too broad and complex a market and set of technologies for a single company to master on its own.  Therefore a key to market success is the ability to collaborate and synergize with the other market players (for example Apple and Hermes collaboration); and to rapidly identify new market entrants (start-ups) that will shape the future of this market (such as the Flextronix investment in OMSignal, and Foxconn funding a Wearable Technology Incubator).

Key: Major industry players, vertical (cross-role) integrators and technology based start-ups.  We expect that the key players of the future will be: 

• major industry players such as Apple that have the brand, design, technology and manufacturing resources to create or dominate new wearable product categories.
• existing (larger) organisations that are successfully able to (vertically) integrate across different roles (for example specialty manufacturers such as Jabil and Flextronix (Flex) offering human factors design engineering in addition to their specialised design and manufacturing skills); 
• start-ups that are able to establish unique capabilities within a single (often technology) role that complements the overall market.  For example: Imprint Energy in the area of battery technology; OMSignal in biometric smartwear; or Quanttus in the area of personal health sensors and services.

Going NO wear! Barriers to wearable technology.

Going NO wear! Understanding the barriers to the acceptance and growth of wearable technology.

Several factors have held back SmartWatches and other wearables: practical design/utility constraints, cost, security and public acceptance. Many have a short battery life, which limits their appeal, most can only perform advanced functions when linked to a mobile phone (as the case for Apple's iWatch).  In general, consumers often have little interest in carrying around another device that cannot serve as a full substitute for what they already have and which is as expensive as a mobile phone.

With very few exceptions, wearables currently lack the elegant design and ease of use that consumers expect of personal items such as articles of clothing or expensive watches. Even the fashion models who were hired to demonstrate  Google Glass at its launch event struggled to make it look stylish. 

Most vendors are still coming to grips with the technical/engineering challenges and constraints presented by wearables, and are only starting to consider the “cultural engineering” that needs to happen for wearables to become accepted by consumers,  Acknowledge design leader Apple has hired fashion-conscious executives from luxury brands like Burberry and Yves Saint Laurent to make its watch more attractive, but it is not yet obvious that it has cracked the code outside of a core price-insensitive "technophile" audience.

One of the biggest challenges facing wearables is the absence to date of a “killer application. Smart Watches do not yet provide much more than smart mobile phones currently do, and many models offer far less, or require to be (wirelessly) tethered to a mobile phone.   Moving beyond the traditional capabilities of a mobile phone, will depend on getting software and hardware developers to build applications and supporting (iOT) infrastrucutre that will optimise the potential for wearable computing. However, most developers are focused on the smartphone market, which already has hundreds of millions of users, versus just a few million users for smartwatches.

Many developers will also wait and see which operating system becomes dominant before investing time, effort and money in wearables. Apple, Google, Samsung , Intel and Microsoft are all going head-to-head to develop the system that will unite different areas of people’s lives, from their watches and phones to cars and home appliances.

Some analysts believe that the killer application for "wearables’ will be that they provide the user with a “persistent” digital identity.  For example,the Disney World theme park in Orlando. Disney invested around $1 Billion to build a system in which people use a wristband (called a MagicBand) to get on rides, pay for food and enter their hotel rooms. The technology is convenient for guests, who have to carry around fewer cards. The bands also allow Disney collect data in real time about the traffic their rides and restaurants are getting, so that they can deploy staff to the right places. Other companies are taking tentative steps in a similar direction. Carmakers such as Hyundai are creating apps to let people unlock and start their cars remotely with their watches and phones.

Consumer applications are not the only key market for wearables. The next growth in wearable technology development may be led by business users and industrial applications. Wearable devices would be useful in the workplace in all sorts of ways.  In factories and warehouses, smart glasses could make it more efficient to locate and handle stock—and to keep an eye on workers’ productivity. Mining and oil firms could use wearables to monitor the safety of employees in hazardous situations. First V1sion is working on "Wearable Broadcast System" - a sports shirt with an embedded camera, which will give fans a "players’ eye view" of the sports action. Virgin Atlantic, Japan Airlines and other carriers have tried using smart glasses and watches to improve their check-in service. Consumers may benefit in the end, but many of the early buyers of wearable devices will be businesses.

Wearable devices hold the potential to transform some industries. Clinical trials could become cheaper and more accurate if pharmaceutical companies give wearable monitors to the patients taking part. Hospitals and doctors’ surgeries could use such monitors to reduce the need for home visits. Insurance firms could enter a new age in which they reduce risk as well as provide cover for it. One American health insurer is already handing out health-monitoring bands to customers, promising lower premiums for those who exercise more.  Banks could reward customers who use the identity-verifying features of wearables, to cut the risk of card fraud.

Wearable devices are highly personal, and because of this users are exposed to real security risks. As consumers capture and store more of their personal activities and more of their health and medical data electronically, the chance that they could be compromised increases. Wearable technology provides a new avenue of attack for cyber-criminals, and currently there is no easy way to revoke personal information should a wearable device be lost or stolen.

Broader market acceptance of wearable technology will only come as the (predominantly technology based) barriers to acceptance are reduced or eliminated, and the overall benefits to the consumer become more tangible and relevant to their daily lives.  Adoption is therefore likely to follow a growth curve marked by addressing key barriers and instantiating consumer benefits (the quintessential definition of a Customer Value Proposition).  This growth curve will not be the same for all customer and market segments.

What size to wear? Wearable Technology Market Data

This is a summary of the key wearable technology market data, forecasts and trends, together with an assessment and critique of the accuracy and methodology of the predictions.

The good news is that without exception market analysts, researchers and pundits all agree that the market for wearable technology is going to be significant ( >$5 Billion in 2016 by some market estimates). With individual sub-segments such as "SmartWatch" already approaching the $1 Billion mark.

The bad news is that very few of these predictions are based on reliable data and sound methodology, and many predictions are simply pure speculation. A good rule of thumb when evaluating market data is to subtract one year from the date of publication of the report, and assume that any data later than this date represents at best a trended data extrapolation, and at worst, the personal opinion of the author.

This situation is normal for new products and technologies. Because the market is new and many of the underlying technologies (e.g. battery), key products and even market categories are still evolving, there is little or no relevant historical data to rely upon.  However, there are a few relevant industry metrics and key trends that can be used to provide reliable guidance (i.e. early warning indicators) to the future evolution of the market, and to help in sizing the market opportunity for specific wearable technology market sub-segments.

The future is (almost always) further away than you think!  The predicted rapid (exponential) growth for wearable technology may turn out to be accurate ... just delayed.  It is a common feature of new technology markets that initial adoption rates may take longer to translate into broader market uptake., pushing overall market growth back by a year or more.  However, as the saying goes "the early bird gets the worm"  ... although you should be mindful of the alternate saying ... "but the second mouse gets the cheese".  So your goal should be to be the early bird, and not the first mouse.

Here are some of the market numbers that commonly appear in the industry press:

"Worldwide Wearables Market Forecast to Reach 45.7 Million Units Shipped in 2015 and 126.1 Million Units in 2019," - Source: IDC Worldwide Quarterly Wearable Device Tracker,

(Units in Millions) 

Product Category	2014 Shipment Volumes	2014 Market Share	2015 Shipment Volumes*	2015 Market Share*	2019 Shipment Volumes*	2019 Market Share*
Wristwear	17.7	90.4%	40.7	89.2%	101.4	80.4%
Modular	1.6	8.3%	2.6	5.7%	6.7	5.3%
Clothing	0.0	0.1%	0.2	0.4%	5.6	4.5%
Eyewear	0.1	0.3%	1.0	2.2%	4.5	3.5%
Earwear	0.0	0.0%	0.1	0.1%	0.6	0.5%
Other	0.2	0.9%	1.1	2.4%	7.3	5.8%
TOTAL	19.6	100.0%	45.7	100.0%	126.1	100.0%

"Wearable Technology Market to Exceed $6 Billion by 2016” - Source: IMS Research

“The next-gen wearable devices market, including smart glasses, to be worth more than $1.5 billion by 2014, up from just $800 million in 2013.” - Source:  Juniper Research

"Wearable Technologies Devices, like Apple´s iWatch, will exceed 485 Million annual shipments by 2018“  - Source: ABI Research

"The global smart textiles market was valued at USD 795 Million in 2014 and is expected to reach USD 4.72 Billion by 2020, at a CAGR of 33.58% between 2015 and 2020. Smart textiles in the military and protection sector accounted for the largest share of about 27% of the total market. However, the market for the sports and fitness segment is expected to grow at the highest CAGR of 40.30% between 2015 and 2020." - Source:  Markets and Market Research

What to look out for ... follow the money not the sheep!

The most reliable lead indicators of a growing market are:

• Actual shipments of lead products in each market category segment (e.g. early unit shipments of Apple iWatch), since these numbers are accurately known, objective, and the early trend can at least give some indication of the initial market acceptance for the product.
• The "collective" wisdom and level of activity of key industry analysts and market research groups (such as IDC, Forrester Research, Juniper etc.).  Look for consistency and soundness of their analysis and research methodology, and mark down speculative estimates.
• The level of Venture Capital interest and investment in start-ups and/or technologies that are relevant to wearable technologies.  Analysis of this data is particularly useful for longer term market health and growth characteristics.  Commercial sources for this type of information include CBInsights Venture Capital Database and the Dow Jones VentureSource.
• Strategic announcements and/or acquisitions by leading brands, vendors, or manufacturers related to wearable technologies (e.g. Apple, Samsung, Google, Intel etc.).
• Increases in research activity, initiatives, and/or funding by leading research institutions into the wearable technology market (e.g. MIT Media Lab).  
• Formation of and/or re-prioritisation of key industry associations in relation to the wearables technology market (e.g. CTIA), as evidenced through strategic announcements and/or the content and focus of industry conferences and exhibitions (such as CES).

Source:  CBInsights Venture Capital Database

Understand the Customer.  For specific market sub-segments and products, the best market growth indicators are those that seek to analyse and/or measure the actual "Customer Value Proposition".  These include:

• Quantitative analysis of the "number" and "quality" of vendors that offering product in the segment
• Industry analyst technical "tear-downs" or "in-depth" testing of new products.  A good source for these types of analysis in the consumer technology segment is CNET.
• Surveys of consumer/user perceptions and attitudes towards particular products or product category.  A good starting point for this is the Pew Research Center.
• Conducting formal "Habits and Practices" (ethnographic) research to better understand the underlying customer needs and requirements for a wearable technology product.
• Formal analysis of "social media and key influencer traffic/sentiments" towards particular products, product categories and/or related technologies.  Several companies offer commercial products and services for social media monitoring, but there are also a wide range of free social media monitoring tools and services that can be used.
• Evaluation of the market adoption and characteristics of adjacent markets or related products (e.g. the adoption of health monitor bands in the medical market; use of Virtual Reality glasses in the entertainment or industrial market contexts).  Note that these products often represent "extreme" usage scenarios from a general customer value proposition perspective, but may provide some insight into the benefits and barriers to broader market acceptance.

What to Wear? Wearables Market Segmentation

The wearables technology market comprises a broad and diverse set of products, services and related technologies.  It is therefore necessary to develop a taxonomy for segmenting the market into meaningful groupings to assist with: sizing the market opportunity; identification of sales/distribution channels; better understanding the relationship between technology enablers and growth potential for specific categories; and for messaging to the intended target audiences.

Existing Wearable Technology Market Segmentation Models

Here are a few of the different types of market segmentation that are currently being used to describe the wearables technology market:

Segmentation by: "How the product is worn"

• Wrist Wear
• Eye Wear
• Ear Wear
• Smart Clothing
• Modular (e.g. attached via pendant)
• Other (e.g. embedded)

IDC predictions for Wearables Technology market based on how the product is worn

You will find more statistics at Statista

Segmentation by: "Product Function/Feature"

• Smart Watches
• Wrist Bands
• Glass Wear
• Wearable Cameras
• Tokens, Clip-ons, Jewelry
• Other

CCS Insight Wearables Forecast August 2014

Segmentation by: "The primary purpose / main context of use"

• Fitness and Wellness: e.g. Activity monitor wrist band
• Health and Medical:  e.g. Wearable patches and monitors
• Infotainment: e.g. Smart Glasses
• Personal Productivity: e.g. Smart Watch
• Personal Safety: e.g. Alert monitor pendant
• Industrial:  e.g. Hand worn terminals
• Military: e.g. Augmented reality head sets
• Fashion: e.g. Ger Mood Sweater by Sensoree

The above segmentation is similar to the classification system used by Transparency Market Research (TMR) in 2015.

Segmentation by: "All of the Above"

Some researchers are segmenting the wearable computing device market by a mix of product and market type as illustrated by the following ABI Research Global Market Forecast:

ABI Research World Market Forecast, February 2014

An improved segmentation model has been published by Beacham Research Limited in collaboration with Wearables Technology AG in their (2014) "Wearables Technology: Towards Function with Style Report".  This report introduces a new way of segmenting the applications that represent the Wearable Technology market into 7 key sectors (Glamor, Communication, LifeStyle Computing, Sport/Fitness, Wellness, Medical, and Security/Safety). The authors claim that this is a ... "more rigorous approach than has previously been available" ... that ...  "gives the proper weight to all application areas currently in prospect and shows the true market potential".

Developing a better model for wearables segmentation

The preceding examples illustrate the need for a more refined market segmentation model for wearable technology; one that explicitly accounts for the inter-dependencies of product function, form and usage contexts.

To address this need I propose the following (multi-dimensional) market segmentation model:

Dimension #1:  Market context

• Consumer
• Industrial
• Military
• Health Services

Dimension #2:  Primary purpose of the product

1. Fashion - Empathetic
2. Communication - Infotainment
3. Lifestyle - Productivity
4. Health - Medical
5. Sport - Fitness
6. Safety - Security

Dimension #3:  How the product is worn

1. Wrist Wear
2. Eye Wear
3. Ear Wear
4. Foot Wear
5. Smart Clothing
6. Attached (e.g. pendant or ring)
7. Embedded

Dimension #4:  How the product functions

• Passive
• Active
• Dependent
• Independent (i.e. stand alone)

• Sensor
• Responder

The above model explicitly recognizes the fact that a particular wearable technology device or product may exist in multiple segments, and that its (market) behavior may be very different in each of the different segments (for example the growth prospects and value proposition for Smart Glasses in the Consumer market will be very different from that of the Military market equivalent).

This new approach  implicitly results in a very large number of segments (Dimension x Dimension x Dimension etc.).  However, with well chosen (orthogonal) dimensions each dimension can be evaluated separately, resulting in a more manageable segmentation analysis (Dimension + Dimension + Dimension etc.).

In a follow up post, I will explain in more detail how this multi-dimensional model can be used to classify and to better understand the market characteristics of the current set of wearable technology devices.

What do we mean by the term "Wearable Technology"?

The term "wearable technology" is used to describe clothing or wearable accessories that incorporate computer or advanced electronic sensor technologies.

Wearable technology usually has both a practical function and a fashion component (e.g. a Smart Watch).  However, some "wearables" may have a purely aesthetic look (e.g. fashion clothing incorporating eTextiles to create a visual or artistic effect), or an empathetic purpose (e.g. the Ger Mood Sweater by Sensoree which interprets emotions and instantly displays the wearer’s mood  as an interactive light display).

Here are some examples of wearable technology products:

Collection of Smart Watches and Fitness bands

Ralph Lauren Polo Tech smart shirt (2014)

The Ger Mood Sweater by Sensoree 

In  a very practical sense, the market  for wearable technology is intertwined with the evolution of mobile devices (in particular smart phones), and that of "Internet of Things" (IoT).  Wearable technology is often interfaced with (or in some cases reliant upon), mobile devices such as smart phones to deliver a particular function or solution (e.g. the Apple iPhone 6 and iWatch).  Wearable technology is  also often designed to interact with external sensors or beacons that are part of the IoT (e.g. your Smart Watch alerting you to in-store promotions via an iBeacon).

In the following series of posts I will be exploring the current status and predicted future for the global "Wearable Technology" market.  In particular, I will be covering key topics including:

What to wear?  An overview and segmentation of the devices, technologies, products and services that comprise the wearable technology market.

What size to wear?   A summary and critique of the key wearable technology market data predictions, forecasts and trends.

Designed for wear.  A review of the core underlying technology enablers (e.g. advances in battery technology), and infrastructure components (e.g. the Internet of Things), that are essential to the development and growth of the wearable technology market.

Going NO wear!  Understanding the barriers to the acceptance and growth of wearable technology.

Whose wearing what?  An analysis and assessment of the key players in the wearable technology market (brands, manufacturers, and research institutes)

Wear to next?  A collection of insights and predictions into the evolution of the wearable technology market.