Wearable technology is shaping up as a major trend, with the market poised for steep growth in the coming years. Throughout 2015, wearables momentum has been building, with a wide range of products having been released, including an ever-growing collection of fitness bands and smartwatches, with the arrival of the Apple Watch earlier in the year, in particular, drawing significant attention to the market.
In September, market research firm the International Data Corporation (IDC) forecast that wearable device shipments will reach 76.1 million units in 2015, representing an increase of 163.6 per cent from the 28.9 million units shipped last year. The IDC has further forecast that by 2019 worldwide shipments will reach 173.4 million units.
Wearables, which are encompassing an ever-increasing variety of products, are also being developed to provide an increasing variety of services, from communication and entertainment, along with a variety of health functions, to payment services and use in the workplace.
The following is an overview of the wearables market and the range of services associated with this relatively new technology trend.
Smartwatches and fitness bands
Smartwatches and fitness bands are the most recognisable product categories currently occupying the wearables segment, with smartwatches in particular gaining market traction over the course of the last year.
While the Apple Watch has been a headline-grabber, a number of smartwatches running Google’s Android Wear operating system, including from the likes of Samsung, LG and Motorola, have also been released this year, providing consumers with a number of options across a range of price points. But while smartwatches have gained in popularity over the course of the year, fitness bands are still currently the most popular wearables product category on the market, with companies such as Fitbit and Garmin each producing a variety of different wearable devices encompassing a range of fitness tracking functions, among the market leaders.
Fitness bands generally provide users with a more singular purpose as opposed to smartwatches – such as tracking steps taken throughout the course of a day, or distance walked or run – with smartwatches as a rule being more multifaceted in their usage. Smartwatches may provide users with functionality such as access to text and email messages, with various apps unique to each platform providing users with a range of services.
The IDC divides wearables into two categories, basic wearables and smart wearables (with smart wearables capable of running third party apps), forecasting that, while basic wearables are currently the more popular category, smart wearables are poised to become the dominant category in the coming years. Regardless of whether they run third party apps, most fitness bands and smartwatches are designed to interact with smartphones, providing further levels of access and interaction and further building the connected ecosystem of devices. Meanwhile, fashion brands such as TAG Heuer, which has recently released a smartwatch, are approaching the market from another angle, incorporating technology with fashion, potentially further expanding the market’s consumer base.
Other wearables product categories
Another segment of the wearables market expected to record steep growth in the coming years is wearable garments, with professional athletes in particular likely to adopt the use of smart clothing. Smart garments may come in the form of items such as shirts, shoes, socks or hats, and like fitness bands can offer a range of different functions.
Earlier in the year, the IDC forecast that smart clothing will grow from a 0.4 per cent share of the wearables market this year to a 4.5 per cent share of the market in 2019, with shipment volumes of garments embedded with computing power building momentum. Smart glasses, such as Google’s Google Glass, meanwhile, may well find their niche in the workplace rather than as a purely consumer-focused item, assisting workers in employment scenarios ranging from factories to hospitals.
Virtual reality products are another market segment that can be categorised as wearable technology, currently with a primary focus on entertainment, with the market poised for steep growth over the next year on the back of virtual reality headset releases from Sony (PlayStation VR), Oculus (Oculus Rift) and HTC (HTC Vive), while Microsoft’s HoloLens is also in development. Samsung got in early this year with the release of its Gear VR, which is compatible with its range of 2015 flagship smartphones.
As with smartphones over the past five years, the increasing take-up of wearable technology has seen a rapid growth in associated services, ranging from health to payment services to security and interaction with connected cars and homes, with wearables becoming an increasingly important component of the connected ecosystem (known as the Internet of Things).
Payment technology is one service in particular that technology giants, such as Apple, Samsung and Google, have been making significant investments in in recent times. Apple has been a frontrunner in the category, introducing its Apple Pay service towards the end of last year. Apple Pay, which works in conjunction with a user’s cards, can be used on the Apple Watch, with users able to make payments in-store via NFC (near-field communication) technology. To make a payment, users hold the Apple Watch next to a contactless reader, while double-clicking a button on the watch.
Contactless payments are a growing industry (at the beginning of the year Deloitte stated that it expected the number of NFC-enabled devices being used for making in-store payments will rise steadily over the medium term), with Samsung this year having released its Samsung Pay service and Google its Android Pay service.
Health is another complementary service that has emerged around wearable technology. With a range of devices from the likes of Fitbit and Garmin decked out with sensors that monitor aspects associated with users’ health, such as heart rate and sleep tracking, a market is in turn developing around utilising this data to measure fitness health and wellness. Meanwhile, both Apple and Samsung offer a range of fitness applications with their respective smartwatch offerings, while IBM, among other companies, is developing a range of complementary software solutions.
Smartwatches are also becoming an influential component in the Internet of Things, providing for control of the various devices (from appliances to home audio visual devices) that make up the connected ecosystem. For instance, users can control appliances throughout their home via a smartwatch, or open and lock and start their connected car.
The next big thing?
Wearables appear poised to become the technology world’s ‘next big thing’ following smartphones, with companies such as Apple, Samsung and Google lending their collective clout to the industry. Providing functionality from communication to entertainment to health and payment services, wearables are becoming an increasingly important component of the connected ecosystem.
The IDC has noted that smart wrist-wear, capable of running third-party applications, is driving the wearables market, with wrist-wear including the Apple Watch, Motorola’s Moto 360, Samsung’s Gear S-series, and Pebble’s Pebble Time gaining attention. While the market is currently in its comparative infancy, it appears that in the coming years, as more and more devices across the various form factors are released, incorporating increasingly advanced hardware and sophisticated software, that wearables will command a growing influence in the connected ecosystem.