12, 2014 Wearable Technology report

Transcription

INITIAL REPORT
David Franklin, [email protected]
Wearable Tech Market Set to Grow But Needs a Must-Have Device
Companies: AAPL, ARMH, ATML, BOSCHLTD, BRCM, FB, FSL, GOOG/GOOGL, GRMN, INTC, INVN,
KRX:005930, MSFT, NKE, NVS, NXPI, QCOM, TXN
September 12, 2014
Research Question:
Who will be the winners and loser in wearable technology as consumers either flock to
these products in the next few years or its market potential is overblown by hype?
Summary of Findings

The wearable technology market is the natural evolution of
computing and will continue to grow during the next two to 10
years, according to 38 of 41 sources. Sources’ growth estimates
varied widely and ranged from $1 billion to more than $50 billion
by 2018. Health/fitness devices and applications are the wearable
tech market’s current growth drivers, but smartwatches, medical
and enterprise apps, data management, data analytics and textiles
are expected to be future catalysts.

Wearable devices’ real value is in the data. Collection, security,
privacy, management, aggregation, analytics and monetization are
all backend operations that require expertise. NXP Semiconductors
N.V. (NXPI) and Atmel Corp. (ATML) already provide sophisticated
sensor hub technology for data collection and communication.

The wearable tech industry is highly fragmented and serves diverse
and niche markets. Many consumer devices appear to be solutions
looking for a problem. Sources discussed 82 companies as being
industry stakeholders. (See list.) Those winning in the wearable
space are just as likely to come from the chip, sensor and data
management/analytic side as from the end-user device side.

Apple Inc. (AAPL) is expected to become a wearable technology
market leader. Sources overwhelmingly identified its upcoming
Apple Watch as a device that will shape the wearable tech market.

Google Inc.’s (GOOG/GOOGL) Google Glass has many critics in the
consumer market but is gaining acceptance in the enterprise and
medical segments. One industry specialist source expects nine to
10 new smartglass products to be introduced this year and 1
million units to be shipped by mid-2015. Google likely will secure
70% to 80% of this market.

Other likely winners are InvenSense Inc. (INVN), Fitbit Inc., Misfit
Wearables, Jawbone, Samsung Electronics Co. Ltd. (KRX:005930),
ARM Holdings PLC (ARMH), Intel Corp. (INTC), Texas Instruments
Inc. (TXN), Broadcom Corp. (BRCM), Freescale Semiconductor Ltd.
(FSL), NXP Semiconductors NV (NXPI), Qualcomm Inc. (QCOM),
Bosch Ltd. (BOSCHLTD), Kionix Inc. and Xiaomi Inc.

The lack of a must-have device or app is impeding widespread
adoption of wearable technology. Other issues include security and
privacy concerns, the limited value proposition for the user, the
need for more meaningful contextual data and improved sensor
technology, poor device durability and battery life, and
unfashionable designs.
Silo Summaries
1) Technology Company Executives
Fourteen of 15 sources expect the wearable technology
market segment to experience significant growth during
the next two to 10 years. The expansion and adoption
of wearable tech are the natural evaluation of
computing. However, a must-have device or app has
not yet emerged. Sources’ growth projections varied
widely, but they agreed that that the health and fitness
segment will drive wearable sales. Fifty-seven different
companies ranging from startups to traditional
technology and electronics firms were discussed as
having a stake in this market.
2) Industry Specialists
Five of six sources expect meaningful wearable
technology market growth during the next three to five
years. One source said Google Glass interest among
consumers has stalled, another said enterprise
applications for smartglasses are on the rise and that
Google Glass will have 70% to 80% of the market, and a
third said sales of activity and fitness bands have
plateaued. Market categories expected to drive
wearable device growth include health and fitness,
medical, watches and enterprise applications. The
market is highly fragmented; more than 40 companies
were discussed by these six sources.
3) Wearable Tech Retailers
Three sources representing national sporting goods
retailers and six representing national tech retailers
expect sales of wearable devices to grow further. Fitbit,
Nike and Samsung are the current sales leaders, but
Apple is expected to dominate once it releases its much
anticipated smartwatch. The wearable technology
market is fragmented, with sources mentioning 15
companies that have a stake in the space.
4) Wearable Tech Users and Online Consumer
Survey
Seven Fitbit, two Pebble, one Basis (Intel) and one
Jawbone user made up these 11 sources. Blueshift also
provided data from an online August survey of 1,029
consumers. Ten of 11 wearable tech users expect the
market to achieve widespread adoption in three to 10
years. Fitness and health-related apps and devices are
expected to drive sales. Excitement for Apple’s entrance
into the wearable industry is high; sources expect the
company to be the industry leader. Likewise, survey
respondents believe Apple’s entry into the wearables
industry will hasten and promote adoption. Companies
making sensor components and working to reduce
battery usage will come out ahead as well.
1
1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com
Wearable Technology
Wearable
Tech Market
Apple Will Be
Leader
Must-Have
App Available
Technology Company Executives
Industry Specialists
Wearable Tech Retailers
Wearable Tech Users
Background
Wearable technology products date back to the 1960s when inventors designed a wearable device to help them cheat at
roulette. Wearables have evolved significantly since, as today’s early adopters await innovative wearables with connectivity
capabilities. Experts and analysts greatly differ on the potential market size and have published estimates ranging from $3
billion to $50 billion by 2018. Meanwhile, Morgan Stanley forecasts $17.5 billion in sales for Apple’s Apple Watch in its first
year, which if correct, would be half the volume of the entire global watch market.
Large multinational conglomerates, small pure-play companies such as Kopin Corp. (KOPN) and individual entrepreneurs are
hustling to become the next wearable tech trendsetter. Google Glass and the Apple Watch lead the herd in recognition, but
other wearables that exist or are expected to soon enter the market include the smart hoodie, Facebook Inc.’s (FB) Oculus
Rift, Samsung’s Gear VR, IK Multimedia’s iRing, Garmin Ltd.’s (GRMN) golf watch, medical monitors, smart tattoos, Novartis
AG’s (NVS) contact lens with embedded electronics and a behavior-modifying shock wristband. Companies that stand to gain
regardless of who wins the device race are the component producers of wearables, such as NXP Semiconductors and
InvenSense.
Still, many industry experts question the viability of wearable devices gaining mainstream acceptance. Currently most
wearable products are marketed to the fitness crowd and contain the same standard features of heart rate monitoring, stride
count and total distance. Another barrier to wearables’ acceptance is their lack of aesthetic appeal. Saturday Night Live, The
Ellen DeGeneres Show and The Daily Show have spoofed the Google Glass, alluding to its invasiveness and ugliness. Google
has responded by teaming up with designer Diane von Furstenberg to introduce a line of designer Glass frames. A third
challenge is that users often become quickly bored of their wearables; a recent report found that users of activity-related
wearables like Fitbit and Jawbone abandon their devices after just six months.
As expected, Apple jumped into the wearable tech market with its Sept. 9 announcement of the Apple Watch, which works in
conjunction with several iPhone models. The industry is hoping that even just the anticipation of this product will broaden
adoption of smartwatches and bring wearables into the mainstream.
Current Research
Blueshift Research assessed whether the wearable technology market would continue to grow and which companies would
be the winners and losers. We employed our pattern mining approach to establish five independent silos, comprising 41
primary sources, an online survey of 1,029 consumers, and seven secondary sources focused on the wearable tech industry:
1) Technology company executives (15)
2) Industry specialists (6)
3) Wearable tech retailers (9)
4) Wearable tech users and online consumer survey (11 tech users, 1,029 survey respondents)
2
Wearable Technology
5)
Secondary sources (7)
Next Steps
Blueshift Research will assess the pending launch of the Apple Watch and its effects on the wearable technology market. We
will research which products are being purchased and consumers’ satisfaction levels with those devices. We also will review
wearable technology in terms of enterprise applications. Finally, we will monitor the market for a must-have device or app.
Silos
1) Technology Company Executives
Fourteen of 15 sources expect the wearable technology market segment to experience significant growth during the next two
to 10 years. The expansion and adoption of wearable tech are the natural evaluation of computing. However, a must-have
device or app has not yet emerged. Sources’ growth projections varied widely, but they agreed that that the health and fitness
segment will drive wearable sales. Fifty-seven different companies ranging from startups to traditional technology and
electronics firms were discussed as having a stake in this market. Frequently cited device companies with the potential to win
were Apple, Google, Fitbit, Samsung, Jawbone and Misfit. Meanwhile, Intel, Broadcom, Texas Instruments, Qualcomm,
Freescale, NXP, InvenSense, Bosch, Kionix and Atmel could emerge as chip and sensor leaders. Sources discussed the need
for wearables to move beyond being a smartphone on the wrist or in glasses. Wearable data, management and analytics
must improve in order to offer users more valuable and usable information. Challenges facing the wearable industry include
overcoming data security and privacy concerns, providing meaningful data analytics and increasing the value to the user.
KEY SILO FINDINGS
Wearable Tech Market Potential
- 14 of 15 expect the wearable market to continue to expand during the next 2 to 10 years.
- Dollar projections for the industry ranged from $1 billion to $50 billion by 2018.
- Health and fitness devices and apps are expected to drive growth and adoption.
Wearable Tech Winners and Losers
- 57 different companies were discussed as having a stake in the wearable space.
- Apple, Google, Fitbit, Samsung, Jawbone and Misfit were most frequently mentioned as winners in the device space.
- ARM, Intel, Broadcom, Texas Instruments, Qualcomm, Freescale, NXP, InvenSense, Bosch, Kionix and Atmel are
expected to perform well in the chip and sensor segment.
Miscellaneous
- Headwinds include the lack of a must-have device or app, security and privacy concerns, and a limited value
proposition for the user.
1. Hardware product manager in Boston
A major barrier to wearables stems from consumers’ resistance to behavioral changes. Adopting new technology comes
at a cost, and the benefits that wearables offer may not be high enough yet. The nature of product development teams
will need to change as user experience becomes more important. Tracking sleep cycles will become a de facto feature,
but food intake tracking holds the largest potential. Hardware is making a comeback.
Wearable Market Potential
 “I understand where that range variation of $3 billion to $50 billion [in wearable tech market potential] might come
from. There’s a sense that technology still has to turn a corner in order to really meet the full potential. The full
potential number is probably $50 billion-plus. For me, it’s more of a ‘when’ question. Are you going to hit that
3
Wearable Technology
number in four years, or is it going to take longer for the technology to mature? Or for our cultural biases and
expectations to adjust? I think that’s harder to answer. There is going to be a point in the next 10 years where it’s
going to be both a $3 billion and a $50 billion market.”
 “Widespread adoption will probably take closer to 10 years than three. I think part of the rationale is that a lot has to
go right for it to really be valuable. I think there are elements of what wearables are able to provide people right now
or how it’s framed, where there’s a little bit of a mismatch in terms of what will really be valuable. There’s a
difference between providing data and providing new experiences that’s pretty drastic. I think we’re still mostly in a
data world in terms of what wearables are providing us. The user experience really needs to improve. Then a larger
company needs to be taking a stand and put out a product that people will adopt at a high rate.”
 “I haven’t seen any of the big players put out a product that seems like it’s going to be a winner in the next couple of
years. It seems like Google Glass hasn’t been able to put out anything that really grabs people.”
 “For early adoption segments, fitness has obviously been a strong one. A lot of people have been talking about the
professional fields, whether it’s medical or industrial applications, where you can start to augment in more niche
careers or industries. Both of those will be earlier drivers, but until you get something that is applicable to wider
aspects of life, I don’t think you’ll see a real success story coming from one market segment.”
 “Absolutely, you see users toss aside their devices, everything from the
Fitbit situation to a very practical aspect. … I actually ended up getting a
Pebble at a developer hackathon event. After a week of misplacing the
Widespread
adoption
will
charger—and it’s such a customized charger so it’s really difficult to get a
probably take closer to 10
replacement—there was sort of no driver for me as a user to want to use it. I
years than three. I think part of
probably only used it for a week or so. It was very easy for me to walk away
from it.”
the rationale is that a lot has to
go right for it to really be
 “The Basis watch guys [acquired by Intel] have some really interesting tech.
valuable. I think there are
There’s some challenges with the design side. They’re aware of that. As a
elements of what wearables
company, they at least get what their strengths and weaknesses are.”
 “People are talking about the fashion industry, but that feels like too big a
are able to provide people right
leap for me. It’s sort of a functionality and form bias for me. Even the idea of
now or how it’s framed, where
a smartwatch feels sort of anachronistic to me. Why would a watch be the
there’s a little bit of a mismatch
obvious place to have an interface? It’s sort of an awkward place to have to
in terms of what will really be
look and doesn’t fit in with existing behaviors.”
valuable.
 “The place that seems more exciting is integrating wearable technology into
the things you already do. Reebok [Adidas AG/ADDYY] or Under Armour
Hardware Product Manager, Boston
[Inc./UA] may be moving in on this: integrating wearable tech into athletic
wear that measures your muscle workout.”
 “I hate to write off anyone. I haven’t loved what Samsung’s put out so far. I’ve actually been even more disappointed
in Pebble.”
 “I know Jawbone’s reputation has been battered around a little bit. I’ve heard mixed things about the UP. Technology
is going to drive a huge part of it. Sleep measurement is sort of a dividing line, specifically in the health and
fitness/wellness space. Being able to detect sleep is something that consumers notice. I imagine at some point, that
measurement is going to be de facto and if you don’t have that as a wellness wearable, you’re going to be behind.”
 “Fitbit’s already doing pretty well so I don’t know if they have a huge room to grow. I can’t think of any real examples
of winners I can get behind. A lot of companies have potential, but it’s hard to say who is really going to take off.”
 “Misfit has some buzz behind it. They seem to have a nice marriage in terms of their branding, between that fashion
side and the engineering and functionality side.”
 “I’ve learned to not try to guess what Apple is going to do. Apple is in such a strong position. The iPhone is such an
incredible platform. It’s very, very challenging to work outside the bounds of what Apple is doing.”
 “We’re doing a lot of Android work right now, and it just feels like nothing that we’re doing can be the real deal until
we’re ready to go on an iPhone. To me, their real strength is starting from that position of being a platform. Whether
or not they can create an actual device itself that becomes a superstar, I’ll believe it when I see it.”
 “The supply side market is always going to be a commodity. I don’t see somebody exploding out just because of the
new technology that’s happening. The basic components we’re using are the same as always. It’s not going to be any
different than the patterns that have happened before that. What is more interesting is that space in between where
someone is creating a platform. The big thing that Apple decided is that its phones are going to support BLE
4
Wearable Technology
[Bluetooth low energy]. Now we’re starting to get into the space of iBeacons. Those are powered by the new version
of Bluetooth, which is very low-powered so it allows you to have devices that don’t need to be charged very often.”
 “Another company called RadBeacon [Radius Networks Inc.] has kind of done that for Android. What’s interesting
about these companies is that they’re in a parallel space compared to wearables. I think wearables are going to
interact with Bluetooth energy stuff. As a parallel, those guys are going to start to form the platforms on which
entities can start building and adopting the technology. That’s where you can start seeing the supply-side benefit.”
 “If someone really does create an easy developer interface or a device that
connects really easily to your phone and has some great integration, that
could be really interesting and have a lot of potential. There’s a whole scale
I actually ended up getting a
for how easily you could make developer tools available. That’s where you
Pebble
at
a
developer
can see someone who’s not a front-facing product begin to benefit.”
Miscellaneous
hackathon event. After a week
 “In terms of getting to the point where people say that wearables has been
of misplacing the charger—and
a success story, I do think it needs to go beyond fitness tracking and beyond
it’s such a customized charger
a mindset of having a wearables be a fundamental personal device and
so it’s really difficult to get a
something that is a digital mirror of your life in all aspects, not just in terms
replacement—there was sort of
of fitness. That may mean being able to track mood or provide insights on
aspects of your life that you didn’t even consider tracking initially. It’s not so
no driver for me as a user to
much a market segmentation at that point then. It ends up being more of a
want to use it. I probably only
broader mindset that cuts across segments.”
used it for a week or so. It was
 “The one thing I’ve heard from people about the Holy Grail is being able to
very easy for me to walk away
track food intake without having to manually input anything. A few people
have thought about doing that—everything from implants in your mouth or
from it.
the Google Glass diabetes contact lens is going to be applicable to food. The
Hardware Product Manager, Boston
Proteus [Digital Health] guys that let you ingest a pill. There are all sorts of
avenues, and I don’t think any of them are particularly close.”
 “The democratization of tools and the fact that there is more accessibility to become a developer is something that’s
a much bigger change than just wearable. But it’s causing impact that affects the wearable industry as well.”
 “Hardware as a place for people to innovate has been making a comeback in the last two or three years. That’s the
bigger picture trend with everything from Kickstarter being a platform to putting a product out to prototyping tools
like SparkFun [Electronics]. Hardware is sort of coming back in. Investors are taking more chance there.”
 “Your pool of ideas and marketplace for wearables is widening. You’re going to have more people willing to take on
niche products and tackling that space. You’re going to see more consumer options. To me, that means everything is
going to be stratified and gathered out in terms of who owns market share.”
 “These changes make it harder to figure out skill sets and roles and what makes a valuable team. So much of what
wearables have to offer have to do with the user experience rather than the technical breakthrough, though you
probably need both.”
2. Executive of Clothing+ Group, a Finland-based developer of textile-integrated biometric sensor products
Sales continue to rise 10% every six to 12 months, with higher increases seen for margins and profit. Sports and fitness
devices will lead the wearable market, but market adoption ultimately will stem from devices that solve a lifestyle, health
or fitness problem. Head-mounted displays like Google Glass will go mainstream in four to six years, while body monitors
will see slower growth and healthcare devices will hit their stride in six to 10 years. Sports wearables will take off in one
to two years. Adidas, Under Armour and Lululemon Athletica Inc. (LULU) are leading in the athletic clothing sector.
 “We are growing fast. We’re looking at a 10% increase in number of sold sensor products but a far higher increase in
margins and profitability.”
 “Clothing+ is looking at a potentially huge growth, and even at our most conservative expectations the future looks
very bright for Clothing+. Our vision is to make sensors disappear in clothing. … Clothing+ makes about 75% of the
world’s textile heart rate sensor straps for almost every manufacturer of HR monitors. We are now shifting focus to
the sportswear industry and are in the process of introducing the existing, tested technology to sports bras and tops.
5
Wearable Technology
Successful launches with Clothing+ heart rate sensors from PureLime [A/S], Shock Absorber, Kalenji and Berlei are
leading the way, and we’re launching with three more global brands in the very near future.”
 “The [wearable industry growth] estimates are difficult to compare and judge because the reports don’t share a
common definition of what really is included in ‘wearables.’ Clothing+ understands a heart rate sensor strap is likely
not really classified as a ‘wearable’ although being body-worn is essential to its function. For this reason we have a
hard time following the reports and only read them to form a general idea. We expect the whole notion of ‘wearable
technology’ to become diluted into just being ‘normal’ or to become just another form factor for some devices. … We
believe it will take another four to six years before head-mounted displays such as Google Glass will be common, but
body monitoring will grow on people slower … closer to six to 10 years. On the other hand we have very good reason
to believe the sports wearables market will take off within a year or two.
Some 350 million sports bras are sold annually in the world, and with some
very prominent brands launching sensor-equipped bras, it isn’t
Sports and fitness will be the
unreasonable to think the market is measured in the millions very soon.”
breakthrough
market
for
 “Sports and fitness will be the breakthrough market for wearable
technology. There is an existing consumer segment familiar with and hungry
wearable technology. There is
for new sensor data. They are willing to spend and the retail channels, and
an existing consumer segment
logistics chain are already set up. The benefits of wearable tech don’t need
familiar with and hungry for
to be explained to the target group, and there is healthy segmentation
new sensor data. They are
within the market providing the quintessential opportunity for differentiation
willing to spend and the retail
by design, price point, functions, etc.”
 “The activity monitor solved only a part of the problem … but it didn’t really
channels, and logistics chain
coach the user into improving their habits around the activity of
are already set up. The benefits
moving/walking/running. And the data isn’t very reliable either in many
of wearable tech don’t need to
devices. If eating a slice of pizza scores higher than walking up a flight of
be explained to the target
stairs, the unreliability becomes too frustrating to keep following. Another
group, and there is healthy
aspect of the activity bracelets was that they were for a while a status
symbol. … We see the activity monitors are already kind of a thing of the
segmentation
within
the
past.”
market
providing
the
quintessential
opportunity
for
 “Products that go tech-first and seek to push any function into a body-worn
differentiation
by
design,
price
form will not be able to overcome the ubiquitous might of the mobile device.
point, functions, etc.
Products that either 1) are based on a wearable form factor or 2) are
desirable enough for the consumers from points of view of design and
Executive, Finland-based Textileintegration with existing device ecosystems [iOS, Android] have a far better
integrated Biometric Sensor Developer
chance of surviving.”
 “Adidas, Under Armour and Lululemon are far along the wearable tech path,
and their respective approaches make sense, pun intended. It’s going to be interesting to see what Nike [Inc./NKE]
and Apple can cook up too. The medical instrument giants are also in line to get their hands on the newly available
tech, but not from a trend point of view but more from the opportunity to make better, more efficient products.”
Miscellaneous
 “Wearable tech is going to go down as a buzz word and catch phrase of the mid-2010s and will sound really funny
and movingly retro in 10 years. Companies with the word ‘wearable’ in their name will rebrand themselves at some
point. The killer product will solve an actual problem people have and not introduce another body-worn form factor,
but will integrate with an existing one, like clothing. A smartwatch that offers the same functions as a mobile device
will not survive as the wrist as a user interface is less ideal for operating the functions of a phone.”
3. Nicholas Langston, senior manager of business development for TE Connectivity Ltd.’s (TEL) Wearable Group
ARM Holdings could be one of the big winners within the supply chain as wearable devices gain popularity. Companies
that design and manufacturer fiber optic connectors, interconnectivity systems and antennas are well positioned to win.
In the connector/antenna category, the source identified his company as well as Amphenol Corp. (APH), Laird PLC
(LON:LRD) and Molex (owned by Koch Industries Inc.) as potential input/connector winners, although only TE Connectivity
6
Wearable Technology
has fully committed to wearable devices. In the near term, device makers like Fitbit, Jawbone and Misfit Wearables will
have an early lead or product edge, but no single company dominates the space. They may fall behind if they fail to move
beyond activity monitoring. State-of-the-art wearables have seen a tenfold increase year to year. Health and fitness
devices will continue to lead the consumer market while glasses will drive growth in enterprise applications.
 “We do not make wearable devices. We make the technology that enables
the devices. We design and manufacture components like Wi-Fi connectors,
Wearable device sales are
things that transmit and move information, antennas and cables to charge
increasing very quickly year
devices. We make products that are at the heart of electronic connections
over year. For example, we
for industries including automotive, energy, broadband, healthcare and
looked at the industry [internal
aerospace. Our company is making a conscious effort in wearable devices
and has formed a new Wearable Group based in Menlo Park. I was
report] and in the first quarter
recruited to head up the group.”
of 2013, 200,000 wearable
 “Wearable device sales are increasing very quickly year over year. For
units were shipped. For the
example, we looked at the industry [internal report] and in the first quarter
same period in 2014, 2.5
of 2013, 200,000 wearable units were shipped. For the same period in
2014, 2.5 million wearable units were shipped. It’s grown tenfold. We tried
million wearable units were
to exclude the older wearable devices, including things like hearing aids,
shipped. It’s grown tenfold.
pedometers and GPS devices. We even excluded the smartwatch and
Sr. Manager of Business Development
activity monitors. We just looked at the new class of devices that have
TE Connectivity Wearable Group
three-axis accelerometers, temperature sensors and Bluetooth. We are
forecasting a 25% compound annual growth rate for wearables.”
 “My assessment of market size depends on the time of day you ask me. Smartphones went over $1 billion in the first
year or two. If you consider that textiles and apparel will be a genuine part of the wearable technology, the market
potential will be much bigger. Right now I’m inclined to say it’ll be a $3 billion to $4 billion unit market by 2018. If
you factor in smart textiles, the market would be much bigger. Some people are talking about 100 million to 200
million units by 2018. We are making plans and bringing on textile engineers to [leverage] that growth. The key driver
of growth may be Apple. They will be getting into a discussion of wearable devices and the Apple Watch at their
annual show next week. That will not only drive interest but also a lot of copycats.”
 “The hottest selling devices are Fitbit and Jawbone, and both are driving
volume. We expect Christmas sales to be high. Right now we’re in Wearable
2.0, and we will see Wearable 3.0 at Christmas. The next step will be
One big winner could be
achieving the aesthetic that people want. You are starting to see fashion
someone like ARM, whose
accessories that can be worn on the wrist or in a cuff, as a piece of jewelry
technology has dominated
or a ring. These are Bluetooth devices, really. Input is a growth area and one
of the big segments will be gesture recognition and how we interface with
mobile for years. Anyone
the devices.”
making fiber-optic connectors
 “Health and fitness have been leading the market today. If you look at
and interconnector systems will
market value it is being moved by enterprise. As the devices become better
win. Anyone making antennas
and less intrusive, things will move back to the consumer side.”
will win because every single
 “If the product does not deliver powerful data and sensing and deliver
insight about your health or the environment around you, it will not last. A
one of these devices has an
lot of people are trying to figure out how to do this by making simple and
antenna.
elegant devices but with limited function.”
Sr. Manager of Business Development
TE Connectivity Wearable Group
 “Misfit Wearables has designed a beautiful product that is simple and
basic. It’s one of the first fashionable wearables.”
 “Fitbit and Jawbone have early momentum that may carry them at least for the next season. In the long run, it’s
anyone’s guess which company will win the segment. If someone gets the watch right or gets the glasses right or
gets the garment right, they could win. Anyone making activity monitors will lose if they don’t get beyond that.”
 “There are a couple of ways to look at the supply side. One big winner could be someone like ARM, whose technology
has dominated mobile for years. Anyone making fiber-optic connectors and interconnector systems will win. Anyone
making antennas will win because every single one of these devices has an antenna. Obviously, TE Connectivity
7
Wearable Technology
manufactures antennas and connector/interconnectors. Other companies in this segment include Amphenol, Molex
and Laird. None of them are focused on wearable devices, while we are making a very conscious effort in the area.”
Miscellaneous
 “One important trend in the industry has been a shift away from electronic devices. The devices are disappearing or
being put into a garment. There will always be devices like smartwatches although no one yet dominates the
category. Glasses are an important product in enterprise.”
 “Instead of having one device, we expect there would be multifunction built into the garment and then data
transmitted to an iPhone. The information will travel from the shirt to the phone and from the phone to the cloud or
network system.”
4. John Blet, senior marketing associate for Misfit Wearables
Apple and Google are expected wearable tech winners in the category of large companies. Among startups, wellpositioned leaders are Misfit Wearables, Fitbit, Jawbone and Withings, at least in the area of activity tracking devices.
Widespread adoption in leading wearable categories like health and fitness could be realized in three to five years. The
overall market prospects should hover between $25 billion and $35 billion once widespread adoption takes hold.
Concerns over fashion, product design, wearability and battery power present challenges.
 “I do not see the market reaching $50 billion in four years. I think the market will be more in the range of $25 billion
to $35 billion by 2018. As technology improves and more people find out about activity trackers, I think they will go
mainstream. Where we will be in four years I don’t know, but I certainly think Misfit will still be around.”
 “As for widespread adoption, I want to say we will see it in three to five
years. But again, I hate to make projections when we don’t know what Apple
is doing. Someone like Apple can change everything when it enters the
The hottest item on the market
market. I don’t know what effect it will specifically have on activity trackers.
right now has not been
If Apple comes out with a watch that has an activity tracker and a camera,
launched yet, and that would
some of the tracking companies may have to change their market strategy.”
 “There will always be a market for activity trackers because of the price
be the Apple Watch. No one
point and affordability. Something like an Apple Watch could cost a couple
knows exactly when it will be
of hundred dollars or more, and who knows whether you additionally would
released, but everyone in the
have to sign a two-year contract with the telco for connectivity? It might be
wearable sector is waiting to
as much as a $600 device. That would be too expensive for most people in
see. The activity trackers that
the market for an activity tracker.”
 “The hottest item on the market right now has not been launched yet, and
are hot and popular include
that would be the Apple Watch. No one knows exactly when it will be
Jawbone, Fitbit, Withings and
released, but everyone in the wearable sector is waiting to see. The activity
Misfit.
trackers that are hot and popular include Jawbone, Fitbit, Withings and
Misfit. There are some other key players, but these four are on top. I would
Senior Marketing Associate
be hesitant to pick a leader or category winner with Apple about to make a
Misfit Wearables
release.”
 “Our sales have increased rapidly, but I don’t have precise numbers in front
of me. Our device is sold in over 30 countries, including the U.S., in Europe and China, all fast-growing markets. As
the holidays come up we are expecting huge growth for the Shine and activity trackers. Shine sells for $99.99 at
retail, which is competitive with others. We are sold in Target, Best Buy, Wal-Mart and HHGregg, so we are readily
available and affordable.”
 “Based on my professional experience in the product testing industry and based on my personal experience, having
to worry about charging the device is a big annoyance. … With our product, battery power is built in, and the device is
even waterproof so you never have to take it off, not even when you shower.”
 “Wearability is an important issue. People who depend on trackers for health monitoring have a strong interest in
wearability. Design may be somewhat less important for those into fitness. But some users are very fashionconscious. If you buy a device that can only be worn on the wrist, you may be less inclined to wear it all the time. It
might be too sporty if you go to an elegant event.”
8
Wearable Technology
 “I don’t like speaking ill of competitors, so I’d rather not talk about losers. It’s hard to pinpoint winners in certain
categories, but in our category it would be the four companies mentioned before: Misfit, Fitbit, Jawbone and
Withings. A lot of people are waiting to see what the bigger companies do, especially now that Google, Samsung and
Apple are coming out with devices. I would not be surprised if Apple and Google benefit from growth in wearable
technology. It also may depend on the device, what it does and price point.”
 “I think we will see fast growth for sensors in clothing. Medical will be a leader in wearables for all different reasons.
Patients with heart problems would wear a tracker to monitor blood pressure or oxygen levels, and then have the
information automatically sent to a hospital or doctor. As more people find out about wearable devices, we will see
more products that are combinations of the technology side and the medical side.”
Miscellaneous
 “Privacy is a huge issue, and that’s true for a lot of companies working in Wearables. We try to be extremely strict
about privacy to make sure we are not sharing data unless the customer or user allows it. In part, this is done when
you first get our device. You can ensure that no information is shared unless you give permission.”
5. Pierre-Alexandre Fournier, CEO and co-founder of Hexoskin, a spinoff of Carré Technologies Inc.
Apple, Google and Samsung are poised to be wearable winners on the consumer side, along with companies that
manufacture CPU/GPU chips and wireless components. Suppliers well positioned to benefit from growth in wearable
devices include Qualcomm, Intel, Advanced Micro Devices Inc. (AMD) and Texas Instruments. Wearable devices that
monitor fitness, health and activity will lead the consumer market while smartglasses will drive enterprise adoption. The
buzz around wearable devices is not overblown, and segments of the market like activity/fitness monitors could easily
top $1 billion during the next year. Hexoskin’s smart biosensor shirt has seen growth double year to year, thanks to
healthcare and fitness applications.
 “Hexoskin makes biometric sensors for the healthcare and sports industry, and we are extremely active in
collaborations with NASA, the U.S. Navy and MIT, to name a few. But most of our sales are to people who are serious
about physical training, with or without a trainer. Hexoskin helps you decide how best to optimize your training
experience by finding the right metrics to enhance and improve your activity.”
 “Our sales have definitely increased since we launched our product last year. We are part of a new category of
wearables, so if you go to a retail store, you will not find our category in any of the aisles. We are selling exclusively
online. I can’t tell you what the exact numbers are, but our sales have more than doubled in the last year.”
 “If you want to order a biometric shirt, we are the only company to go to at this point. Our company sales were
traditionally on the ambulatory medical side or on the enterprise side, through our supply of heart monitors and the
GPS products. We also have an EKG in one of our shirts to monitor activity and movement.”
 “The wearable category is very large and diverse. There are watches and activity bands, and there are products with
no user interfaces. We think there will be a doubling in sales every six months over the next year. We certainly see a
market for biometric products and believe that over the next five to 10 years they will grow into a billion-dollar
market. We see opportunities for sports training as well as opportunities for remote health monitoring, remote sleep
monitoring and remote cardiac monitoring. The overall goal is to make healthcare more affordable and accessible.”
 “Adoption of wearable devices will be a little bit slower than smartphone adoption. Enterprise is a leading market via
smartglasses with screens and connectivity. If you think of every worker that uses a computer but needs to be
hands-free, the potential for wide adoption is huge in enterprise.”
 “We see more and more fitness uses, and we are just beginning to see more people use mobile apps because they
lower healthcare payments. There are more devices integrating providing health information to the wearer as to
doctors and health insurers.”
 “The market research on activity trackers and step counters alone projects a $1 billion market for that category. The
more active you are and the more you want to fitness-train, the more likely you are to use a device. Among marathon
runners, we see a 10% increase in device use.”
 “The market is changing with regard to demographics as baby boomers enter retirement. The boomer segment is
both health-conscious and connected and that group will certainly drive growth.”
9
Wearable Technology
“Activity trackers are meant to provide better information and a better experience. It’s like a video game: If you use a
stepper for six months and learn about your movement and how to improve your experience, then once you learn you
can act on it, change your lifestyle and recognize needed pattern changes to improve. After about six months the
device tells you what you have to do, and if you’re only paying $99 for the device it’s well worth the money. Some
people are talking about it as if tossing the device after six months suggests wearable are a fad or that the consumer
saw no value in using the device and so tossed it. … The step counters are not like the devices that measure blood
pressure, which may require long-term use. That may mean healthcare is positioned to have more potential or be a
more powerful market than activity fitness devices.”
 “It’s hard to tell at this point which companies will win or lose. It still feels like the PC market felt at the end of the
1970s. At that time, no one could really tell who the winners and losers were. There were still new players about to
enter the market, and some others were acquired.”
 “Apple and Samsung have a shot at being winners in the market. There are some startups that have potential to gain
footing. And there are some players that don’t even exist yet. We will see different winners and losers in different
categories of the wearable market. There could be a winner in the software segment or by a particular fashion
company or healthcare company. One thing I’m sure of: Something is happening, and things will continue to grow.
The market potential is not hype or overblown.”
 “At the supply level, the companies that power electronics, manufacturers
of CPUs and GPUs, and wireless components stand to benefit from growth
in the wearable market. But I still think most of the margins will be seen on
One thing I’m sure of:
the software side.”
Something is happening, and
 “Suppliers such as Qualcomm, Samsung, Intel, AMD and Texas Instruments
things will continue to grow.
could be winners. Wireless companies and the kind of suppliers who drive
The market potential is not
the subset of the Internet of Things could win. On the hardware side
Microsoft [Corp./MSFT] is well positioned in healthcare. Apple, Samsung
hype or overblown.
and Google have made advances on the consumer side.”
CEO & Co-founder, Hexoskin
Miscellaneous
 “You should keep an eye on the aggregators, systems integrators and
service providers. Service providers are not as sexy as companies developing the next great device, but they are
equally important.”
 “We are seeing a lot of different business models in the wearable area, and I think we will continue to see a lot of
innovation in business models and data use.”
 “There are companies working with Hexoskin and others on API [application program interface]. There are hundreds
of software developers working with biometric clothing companies for applications in medical monitoring and
entertainment. If you play a sport you might rely on a biometric, but this appears or becomes part of a video game.
There’re several large companies building software for this type of technology, but I’d rather not give names of those
working with us. Companies are not just in the U.S. but also in Japan, Singapore, Russia and Europe.”
 “Very few companies focus on health clothing and biometric monitors, so some of the people looking for solutions
are talking to us at this point.”
 “We don’t see a problem with keeping control of confidential or personal information. So far the biggest problem with
remote care devices is that the devices are not easy to use or are not working properly.”
 “We are looking for solutions that help blend communication between devices. There is a big issue with integration
between different devices, and we see that as a bigger problem than privacy.”

6. Former senior technology designer and product developer at a semiconductor company
ARM is a strong leader because of its processors. Companies like Atmel, Texas Instruments, and Freescale also have the
potential of gaining share because of their expertise in microcontrollers, as battery life and power remain major hurdles
in wearables. Intel, Microsoft and Apple might not succeed in the wearables space because of their incumbency in PCs,
mobile phones and tablets. The wearables market is ripe for new entrants with two strong directions leading the way:
industrials and fashion.
10
Wearable Technology
“There are two market segments we’ll see the most activity in. There’s going to be some interesting work done in the
industrial automation part, where you have a headset or a Google Glass that provides information to someone that’s
picking stocks, for example. We’re also going to see chaotic but interesting applications in consumer devices that are
fashionable but have some function beyond fashion, like a bracelets or eyewear.”
 “The industrial part is starting to happen right now. Things are trickling out. Those sales are growing already, and
they will continue to grow. In the consumer space, we’re still going to experiment.”
 “The forecast of a $50 billion market by 2018 is a bit high. I’m not taking that to the bank. But it would be great.”
 “Symbol Technologies [which makes portable bar code scanners and is a subsidiary of Motorola Solutions Inc./MSI]
is one of the leaders.”
 “ARM is very strong from a component perspective, but ARM is somewhat vulnerable [because competition has
grown]. Almost anyone can design a piece of silicon or hardware for a wearable-type device. Companies aren’t
limited anymore to going to ARM or Intel or Qualcomm or TI or Atmel for processors. They can do their own design if
they want; they can fab, and they can do offshore manufacturing or onshore. The volume isn’t there yet for that.”
 “We’re not through with the experimentation phase, which is expensive because things are unique and low-volume.”
 “There’s buzz in the Valley about a renaissance of hardware capability in the high-tech sector. It’s relatively cheap,
and the hurdle for getting a design done and manufactured isn’t that great. You don’t have to be a $500 million
company to do that.”
 “An interesting company in the Valley is Atmel, which is in the
microcontroller space. One of the things constraining wearables right now is
Wearables are going to be so
battery life. We don’t have enough power to drive the applications and
different. I expect somebody
sensors. Google Glass is an example: If you start using the camera and the
screen, you kill the battery life.”
new or somebody unexpected
 “Atmel, TI and Freescale are interesting in this space because they have 8-,
in there. There’s no barrier to
16- and 32-bit microcontrollers versus the ARM A or R series processor,
new entrants, and there are a
which is going to take too much power. The ARM M series, the lowest power
lot of people hindered by their
processors, is still going to be too power-hungry to be always on.”
previous success. It’s a market
 “Intel has the people and the technology to be a huge success in this
market. I would also lump Microsoft and maybe Apple into this. But these
that’s ripe for somebody new to
companies are the large incumbents in the PC and mobile phone spaces.
come in.
They’re going to have a difficult time because of their success with the cell
Former Sr. Technology Designer &
phone and tablet form factor. They’re looking at the cell phone for being the
Product Developer
anchor point for wearable computing. But I think the compelling killer app is
Semiconductor Company
not going to be anchored with the cell phone.”
 “Apple is a special case because we love the iPhone and the iPad, but the
incumbency effect of being successful with a certain form factor or market will make them try to create their next
success on top of that.”
 “Wearables are going to be so different. I expect somebody new or somebody unexpected in there. There’s no barrier
to new entrants, and there are a lot of people hindered by their previous success. It’s a market that’s ripe for
somebody new to come in.”
 “Companies—not Intel, Microsoft or Apple—that are traditionally in the wearable space in terms of fashion are
starting to experiment. The first wave of that is in the fitness area, but that’s just one part of it.”
Miscellaneous
 “All the technology pieces are there to evolve into great things. There’s a lot of energy here. We have all the key
ingredients for the hardware and a lot of the pieces for the software. The problem is we have a lot of it, but there’s no
clear and easy-to-use platform for hardware/software because there’s no killer app to tie everything together.”
 “The killer app could be a bracelet that’s a lifestyle aid or monitor, with a calendar and phone or a wearable
computer that’s integrated stylishly in your eyeglasses so you can receive data there or take notes or a picture. Or it
could be some kind of other wearable or implantable device.”
 “Some people are pursuing direct control of devices through thought patterns and brain waves. There’s interesting
work in its infancy that people are looking at. It’s almost in the realm of science fiction.”

11
Wearable Technology
7. User experience executive in the mobile industry
Apple and Samsung are among the winners in wearable technology because they are the two biggest competitors making
mobile cell phones, which can be called wearable devices. Jawbone and Misfit also are prominent, as is Google with its
Glass. Amazon.com Inc. (AMZN) is trying to enter the field with its newly released Fire phone. Samsung may not be able to
continue leading in the space because it lacks innovation. Meanwhile, smaller companies like Jawbone will have a hard
time competing and probably will be acquired. In terms of components, ARM is the winner because of its technology
behind processors. Qualcomm is the chip maker that leads in wearable devices. Intel also is strong, but it has been more
focused on the PC space. NXP and Broadcom are leaders in NFC technology. The devices that will succeed are those that
make life better for the consumer, provide a good user experience, are reliable, and can become fashion statements.
2015 and 2016 bear watching as second-generation devices will be released in late 2014 and third-generation devices
are expected in 2016.
 “The No. 1 wearable device is in your hand right now. It’s a mobile cellular phone. We carry it every day; we wear it.
It’s a big winner and will continue to be. And the two biggest companies in the category are Apple and Samsung.”
 “I think 2015 and 2016 will be big years for wearables. Companies are already bringing them to market. The first
generation was over 2013, 2014. The next generation will be late 2014 through 2015. And the third generations will
be 2016.”
 “Besides phones, wearables for now are focused on glasses and watches.
Google Glasses have moved into styling even. They’ve upgraded all the
I think 2015 and 2016 will be
hardware and software. They are also developing applications out to three
big years for wearables.
generations. I think they will be releasing it to the mass market in early
2015; that will be a big push for wearables.”
Companies are already bringing
 “Watches will have to became a fashion statement as well as a function
them to market. The first
statement.”
generation was over 2013,
 “Fitness apps that are very focused on a specific sport such as running or
2014. The next generation will
biking are multiplying. There’s even talk that the space is getting crowded,
be late 2014 through 2015.
and the margins are going to compress.”
 “It’s probably a good estimate that the wearables market will be somewhere
And the third generations will
between $3 billion and $50 billion [by 2018]. If you say everyone with a cell
be 2016.
phone will buy one wearable somewhere on the planet, that could be a good
User Experience Executive
forecast.”
Mobile Industry
 “Apple is working on a holistic program they’ll release with software that will
talk with every device out there, like Jawbone, Fitbit and Nike. Apple will also bring their own products out. I think
they will definitely continue to be a leader in that space.”
 “Amazon will try to catch up. They just released their first phone. When someone enters the market in a space
they’re trying to catch up in, it’s a bigger effort. For their next release, they will have learned a lot and it will help them
get to where they want to be. They have the financial capability, the know-how and the desire to grow in the space.”
 “Another company in that space that has backing and the ambition to make people’s lives healthier is Google. They
will roll around with Android and separate initiatives that will focus on health and healthcare. They have many core
innovative ideas, and some will be developed further. Whatever they do is always interesting.”
 “We’ll see what happens with Motorola [Moto] 360 when it comes out. It will have communication functions that will
move off the phone and onto the wrist that allow you to respond faster. It will create a more capable conversation or
exchange by having the device on the wrist versus pulling out the device all the time. It makes the Android device
more wearable. It will be interesting to see how the market responds to that. It is expected to be released in the fall.”
 “The challenge for wearables is to make life better. That can leapfrog into the healthcare industry and provide an
advantage. One of the companies in the medical device space is Misfit.”
 “Other companies that stand to gain are NXP … and Broadcom. Those are the two leaders in near-field
communications technology. They compete strongly in that space.”
 “Qualcomm and Intel have the power chips for the processing units. And ARM works with everybody to bring that
together. They own a lot of intellectual property. They touch everybody’s space with their technology. I believe
12
Wearable Technology
Qualcomm is a big winner. Intel is trying to emulate Qualcomm and move more broadly into the mobility space after
owning the PC space. But Qualcomm has a lot of, if not the most, silicon in products in the space.”
 “Players like Jawbone will probably be acquired at some point or could fall behind because they’re not big enough to
be a separate racehorse. Smaller startup companies that have grown on their own technology and capabilities will
have a harder time.”
 “Companies that focus in on the consumer and great product reliability, where people are actively interested in the
product, will be the winners.”
 “The fads, the flash in the pan, those are the things people put aside after six months.”
 “I don’t know how long Samsung will be able to grow and innovate instead of copying and catching up. Samsung may
end up being one of the companies that will not be a winner. The smaller companies that are hungrier, like LG
[Electronics Inc./KRX:066570] and HTC [Corp./TPE:2498], have better and more interesting products in terms of
how they can be used.”
 “You can Bluetooth and Wi-Fi devices into your phone to get more computing power out of them. Standalone devices
are still weak and don’t feedback well to a network tower [cloud computing] so that it can collect the information and
do what needs to be done with it.”
Miscellaneous
 “There’s so much going now in the technology space, particularly in wearables, but it’s still not clear who’s going to
be doing what.”
8. Mobile industry veteran for a major international electronics company
Apple is likely to be one of the primary winners in the wearables space. It has succeeded in making its previous products
fashionable. Health and wellness are leading the market, as confirmed by Apple’s announcement of its HealthKit.
Samsung has a good chance of being the other leader. For components, the winners will be the same as in the mobile
phone industry. Fitbit may be a loser, especially after Apple enters the smartwatch market with a high-end product, and
as it gets squeezed into the middle by low-end devices from China. Microsoft and Google do not have a history of
hardware successes and could lose out in launching a wearable device.
 “The wearables space is being led by health and wellness. Apple’s announcement of HealthKit reinforces that. We’ll
find out if Apple’s focus is truly health, but they’ve hired a lot of industry health experts.”
 “In usability studies, people are surprised how convenient wearables are.
Not having to pull the phone out of your pocket is something that’s a high
user satisfaction feature for smartwatches. The challenge will be for people
It’s going to be a race between
who haven’t experienced it yet to buy. Right now the average consumer is
Apple, or whoever will be the
not likely to buy. Fashion has a lot to do with it. In the phone industry Nokia,
market leader, and whoever
Motorola and the iPhone were fashionable. The watches that are out in the
becomes the early No. 2.
market are not yet deemed fashionable.”
 “The market potential will be either very big or very tiny. The question is will
Mobile Industry Veteran, Major
this be like TiVo or the iPhone?”
International Electronics Company
 “Fitbit, the current market leader, is going to be squeezed because low-end
devices coming from China are very cheap, and high-end devices, like from Apple, who have retained people from
the fashion and jewelry business, are coming in. History shows there’s not much in the middle, and that’s where
Fitbit is going to end up. Realistically, Fitbit is better poised to compete with Xiaomi than Apple.”
 “In the smartwatch category, Google is pushing the prices really low. The industry will shake up once Apple
launches.”
 “Among the less than obvious winners will be application and enterprise companies that manage workplace
wellness. Enterprise wellness program management companies like Keas or Jiff will have more to work with, with
constant monitoring and the popularity of these devices.”
 “In terms of components, the same companies will be the winners as for phones. It will be the same companies
making the screens and the batteries. There are, in addition, some smaller integrative sensor fusion companies. …
These companies are the usual ones like Samsung, Maxim Integrated [Products Inc./MXIM], Qualcomm.”
13
Wearable Technology
“The people winning in the semiconductor space for phones will be the same ones winning for wearables. The gap
between wearable computing and phones, in terms of component vendors, is not as great as it was between the PC
and phones.”
 “Doing wearable computing is very similar to doing any kind of computing. Companies with a low volume of sales,
when there will be a gold rush for wearables, will not be successful. Component providers will be servicing
companies with large volume sales. Others like HTC will have problems securing components from their
manufacturing partners. Volume leaders will be serviced.”
 “Samsung, despite its reputation of just being only a fast follower, has a track record of success. They are a volume
leader and will continue leading because they can secure components because of their volumes. They are the leader
in the smartwatch category.”
 “Assuming Apple makes the market, there will be a need for another product on the shelf and other shelves in
competing stores. And that will come down to whoever can manufacture the most. Samsung has a good track record
of securing the supply chain.”
 “The question is whether Google or Microsoft will come in directly with a product and whether those products will
resonate. Google hasn’t had a lot of commercial success with a retail product aside from Chromecast, which isn’t a
high-margin product. And Microsoft right now seems a bit toxic; when you put Microsoft on any product, it seems to
sell 20% less. You can’t discount merchandising in the success of a product. And shelf space does matter.”
 “It’s going to be a race between Apple, or whoever will be the market leader, and whoever becomes the early No. 2.”
Miscellaneous
 “People in the health industry are very excited because there’s a concept of natural experiments, trying to find
patterns based on data from consistent measurements. Now, measurements are for sick people, and we don’t have
that many continuous measurements from large populations who are healthy.”
 “An interesting thing will be authentication and biometric information. Once you have biometric information, you can
use that to fingerprint users and better authenticate people. There’s potential for better security and usability,
whether in payment or enterprise authentication.”

9. Marketing and business executive at an international semiconductor company
The winners in wearable technology will be companies working on the back end of the industry, collecting, aggregating
and selling useful data back to consumers. It is too early to identify these companies, but cloud players that can provide
a software interface will stand to gain. For now, big privacy and security issues must be resolved. The hardware that
makes up wearables is trivial; no money will be made in that in the long term. An area of some value is the
semiconductor space. Health/fitness and aging are the two major markets that
will lead in the growth of wearable devices because they can be monetized.
Sales of devices like Fitbit are growing, but many tend not to be “sticky.” The
Wearables will happen when
industry is still in the early stages and will evolve during the next five years.
you can monetize the software
backend. They will be hype until
 “The real money on the wearables side is taking the information gathered
then. Of course, if Apple makes
from the devices and marketing it back to a group of like-minded people
and providing them value back. For anybody big like the healthcare
a watch, people will buy it, and
providers or IBM, they want to collect, aggregate and sell the data back.”
Apple will make money. But
 “If the money is to be made on the back end, in the data, there are several
that’s more fashion.
markets that will be monetized. You’ll get health and fitness for one, and
there will be a slew of people to make money there. There will be the whole
Marketing & Business Executive
International Semiconductor Company
aging segment too, monitoring your parents and general feedback. In health
and fitness, it will be about knowing your heart rate and aggregating that
data. Those two segments will be monetized.”
 “Wearables will happen when you can monetize the software backend. They will be hype until then. Of course, if
Apple makes a watch, people will buy it, and Apple will make money. But that’s more fashion.”
 “Google has everything to be successful in that space [of data collection], but people are overly sensitive to their
presence. I was shocked at the backlash when they acquired the Nest thermostat, so I wouldn’t put them first.”
14
Wearable Technology
“Google has a really nice watch coming out that provides meaningful feedback. They can aggregate that. They’re not
selling watches. It’s just a data collection device.”
 “The whole thing is further out than people think—not this year, maybe in five years. Wearables and cloud—it’s about
monitoring your house, a bridge, an infrastructure.”
 “Activity trackers like Fitbit are a good spot for consumer wearables, and they’re seeing growth. They’ll continue on.
But these fitness trackers are not very sticky. People buy them and wear them a little while and then discard them
because they don’t like the way they charge or because they don’t provide anything valuable. They still sell because
they’re at the right cost point, have a reasonable battery life, and are an extension of the phone. I think they’ll
continue to sell over this season … but I don’t think there’s a future there because they don’t provide enough value.”
 “The hardware today is pretty trivial. All these devices can be made in China for $20, and there’s no money to be
made there in the long term. The battery life is getting better, and they can track a few simplistic things.”
 “The Nike device is a motion tracker, but it didn’t do very much. However, I see value in the ecosystem, and they did
do that right—creating a sense of community or an ecosystem of like-minded people, people with the same interest.”
 “Google Glass is just a repackaging of the smartphone. I’m not a big fan. Inside, it’s the same parts as a cell phone,
maybe just without a big battery. They get a lot of press, but I don’t see any volume in that segment. Google Glass
doesn’t really solve any need. The original reason for it was enterprise, for example, if you’re climbing a telephone
pole and you don’t have the manual or you crawl into the fuel tank of an aircraft to clean it.”
 “At the bottom [of the value chain] you have the hardware equipment guys, who have to use a BLE [Bluetooth low
energy] radio, which has a microcontroller. This more than likely uses ARM, which more than likely has to talk to one
of the big cloud providers through software. Then these big cloud providers are the ones who will be targeting health,
fitness, aging, whatever. That’s the value chain.”
 “The differentiation by the cloud companies will be in being able to provide a software interface that will talk to a
really low-end microcontroller.”
 “TI also has their own microprocessor architecture and is a major player. But even architectures that use a non-ARM
processor might use one in the radio. ARM’s processor in the space is very rudimentary and very small, and it’s
easier to buy it from them and pay them a fraction of a penny per unit than build your own. ARM makes money in the
space, but I don’t think they have influence.”
 “Intel is staffing a big team and spending a lot of money. It is pulling in people from other companies for their project
on wearables.”
 “One of the visions on the path to wearables is for the device to hear and recognize what you’re saying. There are
huge privacy concerns there. If [the device] listens to you all the time, it can listen to things you might not want to
share.”
Miscellaneous
 “If I were a venture capitalist, I’d put money in the sensor guys. Anybody with sensors will be acquired. … Intel bought
Basis, probably just for the sensor. There’s no value in the hardware outside of the sensor. All the silicon companies
are building sensors, seeing value there. And startups are innovating.”
 “All you can measure on a wearable, an expensive one, is your heart rate and your activity. Sensors will evolve over
time. Silicon Lab[oratories/SLAB] has a sensor that measures UV to tell you if you’ve been in the sun too long.”

10. Semiconductor professional focusing on wearables
Apple and Samsung are expected to remain major forces in wearables because of their proven track records. Broadcom
is a major player in the wearables space’s semiconductor sector. InvenSense is strong in sensor fusion, but Bosch and
Kionix also do well with sensors. NXP and Atmel have a big thrust in the area of sensor hubs. ARM and Intel are very
present in the wearables space. Companies like Fitbit and Jawbone must find a way to scale their product to augment
people’s lives. The Chinese vendor Xiaomi has come out with a $13 smartwatch. Wearables 2.0 already are expected in a
year. Some of the projected growth figures could be exceeded as they were with smartphones.
 “[Wearables are] coming to the mainstream, and people are starting to notice it and are jumping on the bandwagon.
There are wearable technology sections in Staples and Target stores. I’m sure there’s quite a bit of revenue out
there, but to get full adoption we have to get beyond the hype where people will not look at it as a fad.”
15
Wearable Technology
“In another year when we get to wearables 2.0 or close to that, I think you’ll see much more revenue.”
“Wearables will still exist over the next several years, but it will appear in some different shape or form. There are
predictions by Juniper Research and others that by 2018 there will be 130 million devices shipped and billions of
dollars. I think it’s realistic to expect that some of those numbers will become real, and they might even be higher.”
 “The jury is still out on who in the wearables ecosystem will be the winners.
Of course, there are the 60,000-pound gorillas like Apple and Samsung. The
In another year when we get to
much-anticipated Apple Watch has not even been released yet. Samsung
wearables 2.0 or close to that, I
has had several rounds, coming out with different wristwatches, but those
are experimentations. In terms of the Fitbit and the Nike FuelBand, they
think you’ll see much more
have a lot of hype and a lot of press.”
revenue.
 “The question on Fitbit is how are they going to scale their business model.
Semiconductor Professional,
It tells your weight, your calories, your steps—basic things. They now have a
Focusing on Wearables
Wi-Fi driven scale, not a wearable, but a complement to their product. The
Misfit Shine, a very nice design, provides health monitoring during the day
and sleep patterns at night. But really, what do you do with these things? … It’s yet another device I have to carry. …
It’s not really augmenting people’s lives yet. And that’s the goal of wearables 2.0.”
 “From a semiconductor standpoint, Broadcom is very strong in this area, and they have an initiative to go after
wearables. They’re also very strong on the Internet of Things. Their mobile division has experience in the area.
They’ve done the baseband processors that apply to this kind of technology, and they have the experience.”
 “From the IP standpoint, Imagination Technologies [Group PLC/LON:IMG]. They acquired MIPS, a processor
company, several years ago. They also do GPUs, and they’re highly focused on IoT and wearables as well. They
categorize different device classes like fitness health bands, watches and glasses, like the Google Glass. They’re
working on tailoring the applications in this space. I believe they’ve worked closely with Google [Android] Wear.”
 “Also in the ecosystem is InvenSense, with sensor fusion—different kinds of sensors all fused together—working
together to collect this massive data, which needs to go to the cloud, and then data analytics to tell us the useful
information, what we can actually do, from the data it’s collecting from our sleep patterns, our daily running patterns,
eating patterns. InvenSense is definitely a strong company.”
 “Bosch and Kionix are two other companies working on sensors as well, but
InvenSense is definitely leading the way. They seem to have the right all-inA lot of the innovation for
one and compete solution from a sensor standpoint.”
 “Sensor hubs where you can sense data and do some local processing and
wearables is going to have to
send it to a main processor for analytics will probably be in the devices
come from the smaller guys,
themselves. Some of the companies doing sensor hubs are NXP and Atmel.”
and a lot of these will be
 “Movidius [Ltd.] does image processing and will be tailoring its vision
acquired
by
the
bigger
processing to the wearables space.”
companies. There are going to
 “Fortemedia [Inc.] does voice in wearables, enabling voice recognition and
clarity in smartwatches, for example. They also have to be low-powered in
be IoT companies that want to
order to have long battery life.”
have a wearable component to
 “There are many software-related applications as well. I believe the
them. They may want to have
smartphone will not go away and will still be the hub to be paired with a
data analytics as well. … The
range of wearable technology. In some cases, it’s a combination. The apps
next couple of years will see
are the portal to the cloud and interact with the wearable device, and are
the human interface to the user.”
how it pans out.
 “Apple will [be] a force for wearables going forward. There are still a lot of
Semiconductor Professional,
unknowns since they’re very secretive, but if they keep the pace of
Focusing on Wearables
innovation … they will remain a force, even if the iPhone ecosystem is very
much controlled by them as opposed to the open Google Android. That has
its pluses and minuses. Having a closed system is good if you’re ahead in the game and you know what disruptive
technology is coming. If you miss that window, which I hope Apple will not, they may be shoved aside in favor of
Samsung.”
 “Samsung has open source and seems to have deep pockets. They seem to throw everything at the wall; if it sticks,
then it’s OK. That’s how they came up with Galaxy S4 and the tablets that have been very successful. But they tried


16
Wearable Technology
many devices before they got to that place. Apple is very careful and calculated in offering just one or two devices
and making sure they do it right the first time.”
 “I don’t see anybody else as major players. There are other companies in the Google/Android ecosystem like HTC
and the iPhone imitation Xiaomi from China, which is actually doing quite well. They came out with a wearable
smartwatch that’s only $13. That will give Samsung and Apple Watch a run for their money.”
 “ARM and Intel are strong in the space. Intel has a whole Internet of Things city in Dublin, and they have a
competition on wearables. Intel will continue being a major force. But ARM has been gaining a lot of ground because
of the low-power nature of their processors. It remains to be seen as ARM and Intel duke it out to see who’s going to
be stronger in wearables. Intel has a strong microprocessor base, but they need to get to that low-power requirement
they need for both portable computing devices as well as wearables. I think ARM is very close to being there already,
and they also do infrastructure as well—microservers that are gaining wide appeal.”
 “The biggest challenge is going to be for companies like Fitbit and Jawbone. They’re good companies. Jawbone has
been around and has done Bluetooth headsets and other successful devices. If they can scale their product and
meet the requirements for wearables, then they will be fine. I feel that Fitbit is going through some challenges from a
scalability standpoint. They may have something cooked up in the background, but … they have to figure out what
they want to be beyond wearables 1.0.”
Miscellaneous
 “A lot of the innovation for wearables is going to have to come from the smaller guys, and a lot of these will be
acquired by the bigger companies. There are going to be IoT companies that want to have a wearable component to
them. They may want to have data analytics as well. … The next couple of years will see how it pans out.”
11. Executive at a semiconductor company
The source could not yet say which companies would be the winners and losers in wearables. Early players are
companies like Fitbit, Nike, Polar Electro, Samsung and Apple, but winners will not be hardware companies because the
margins will be too low. The value of wearables will be in the data. ARM-based processors are driving the industry, and all
semiconductor companies are architecting chips for the various applications. Three market segments are expected to
dominate: infotainment, fitness/lifestyle and healthcare.
 “Wearables are not at all hype. It’s not for the future, it’s a real thing now. There were 96 million wearable devices
shipped in 2012, predicted to grow to over 485 million annually by 2018 [ABI figures]. In 2013, there were 1.9
million smartwatches alone. The forecast by Gartner is for 20 billion units by 2020.”
 “Some of the wearables are going to be completely disposable, even
digestible. They will include the smart ‘Band-Aid’ or an actual pill you can
swallow to monitor various internal things, and then be digested.”
The value is in the data. It’s
 “One of the market segments is infotainment—watches, glasses. A second is
who manages and does
fitness/lifestyle—sports monitors, heart rate monitors. The third is
something intelligent with that
healthcare, which will probably split into two subcategories: FDA-related
data who will be an important
devices and the non-doctor things, where aging will be a big part.”
 “There’s a disconnect that needs to happen between the data that a
and interesting player.
wearable is generating and the service that is then offered. We will have to
Executive, Semiconductor Company
decide that the data belongs to the user, who will then decide who gets to
use the data and offer a service back to him. For example, I’m wearing a
Garmin device and for now, all I can do is get on my Garmin account and look. Going forward, I may decide that the
data goes to my personal trainer who will create an exercise program from it, or my doctor who is tracking my
progress after surgery, or my insurance company who’s going to give me lower rates for being active.”
 “I don’t think there’s a good answer yet on the winners. I don’t think it’s going to be the device companies. There are
a million Chinese companies making all kinds of low-cost wearables. Most of those companies don’t know anything
about software or data. They’ll actually need someone to help them with that.”
 “The value is in the data. It’s who manages and does something intelligent with that data who will be an important
and interesting player.”
17
Wearable Technology
“Somewhere in the middle there will be a cloud platform guy offering a data as a service as a model. I could register
my device with them and give permission for certain types of usage, where a service provider can have his
application connect to that data.”
 “You can’t count out big companies like Amazon. Why wouldn’t they offer a service on top of EC2 and then connect
the Fitbit to their service? They would need to offer the service environment.”
 “I don’t think there’s any money in the hardware of wearables. The margins start going away quickly with the
dramatic growth expected.”
 “Any hardware company has to have a software play associated with it. Both
Fitbit and Garmin have created a social environment where you can
Any hardware company has to
compete with your friends. The business models of these companies will
have
a
software
play
have to evolve beyond just selling a piece of hardware.”
associated with it. Both Fitbit
 “Even with 96 million devices shipped, it’s too early to say who the losers
and Garmin have created a
will be in wearables. We’re still in the early phases. The winners as well are
TBD. Fitbit is probably on most people’s minds when they think of
social environment where you
wearables. Nike is also investing in this in sports. Polar, too, with the heart
can compete with your friends.
rate monitor and smartwatches. Samsung is also doing a lot in this area.
The business models of these
Apple is coming out with new things. These are the leaders for now.”
companies will have to evolve
 “For the Chinese vendors, it’s a different game. Their cost of manufacturing
beyond just selling a piece of
is so much lower, they can compete in a hardware-only type of business.”
 “The companies making the devices will need help onboarding the device
hardware.
into the service environment and on the other side, onboard the application
Executive, Semiconductor Company
into that service environment and connect the data together. That’s the
problem that will need to be solved by these data as a service companies.”
 “Most of the wearable devices shipped are ARM-based. The Cortex-M low-power processors are driving all the
wearable industry and will continue to do so.”
Miscellaneous
 “Hardware is the new app. The wearable market is going to create a need for very wide variety of device types. This is
also true about the Internet of Things in general, with wearables just one market segment of the IoT. There will be
many device types and that will translate to different processor and silicon architectures and silicon designs inside
for the custom application. ARM’s licensing of their IP will allow the semiconductor vendors to produce the exact
right chip for that application. All the semiconductor companies have initiatives in this space.”

12. Marketing executive in the semiconductor industry
The value in the wearables market will be in what is done with the data that is collected. There will be monetization
opportunities for cloud and software companies in the transformation of data into actionable information. For now, it is
too early to say how and when wearables will ramp because the market is highly fragmented and has many applications,
some of which may not have yet developed. Also, the major players have not yet established themselves, but Google
should not be discounted. Gaming is likely to become a popular segment because it can immediately make use of the
collected data. The medical segment will take awhile to develop, but it has the potential for big growth.
 “I don’t think you can look at the entire wearables market and say when it will happen. It’s a highly fragmented
market with a large number of applications. Certain applications already have a significant ramp up while others may
take years to develop—because the infrastructure has to be developed to support it and not because of how
accepted it will become with consumers.”
 “I think there could be dramatic sales growth in wearables, but where that’s going to be is hard to say at this point.”
 “Trying to aggregate the growth figures when they represent so many markets can be a bit disingenuous because it
glosses over the successes and failures along the way.”
 “Gaming will be a popular one because it’s a consumer segment, and there’s potential for a lot of different
applications. With gaming you can have a more aggressive ramp because you can actually make use of the data
immediately.”
 “Medical will take a long while because it’s a market that’s incredibly conservative.”
18
Wearable Technology
“[In the medical segment] if you target consumers, you’re looking at data which may or may not be meaningful and
hard to monetize. In relation to hospitals, insurance providers and doctors, the market is going to move very slowly
but could be worth more than $50 billion.”
 “There are going to be multiple levels of monetization throughout the entire supply chain. The real value will be in
what is done with the information.”
 “Google didn’t just acquire Nest because it’s a cool thermostat. It’s all about the data that’s being collected.”
 “The secret is how to convert [data] into information, and once you have that information, how do you convert it into
actionable information.”
 “If you follow that data and follow it to the conversion that’s meaningful,
that’s where you’ll find all the value.”
This entire market is one that I
 “That’s where the opportunities [in wearables] are. It’ll be a combination of
believe will happen. But in
both [cloud and software companies]. In some cases you’ll want to transmit
terms of when we see broad
the data to the cloud for further processing into actionable information while
mass-market adoption, I think
other data will have to be processed on site and only the actionable data will
be sent out.”
that’s going to take a while.
 “Who is the end audience [for wearable devices]? If it’s people, you need to
Marketing Executive
have actionable information. If it’s another computer, like a game console,
Semiconductor Industry
then it’s more about real-time data and interfacing with another machine. In
that case, just data is fine.
 “There’s also a concept of precision versus accuracy of the data. Relevance and quality of data are important, and so
are the aspects of the data to act upon.”
 “Being able to sell information back to the utility companies has a tremendous value. Heart monitoring and being
able to communicate an aberrant event to the person’s doctor to request medical attention, that’s actionable and
powerful information.”
 “There are some brand names like Fitbit, which I assume are seeing growth. But I don’t think the major players have
shaken out yet. I would never discount Google … because they know how to use and manage data and information.”
Miscellaneous
 “This entire market is one that I believe will happen. But in terms of when we see broad mass-market adoption, I
think that’s going to take a while. It’s easy to have very inflated numbers, and maybe history will show us they were
not inflated. I think for now you still have to lay your bets on a lot of different vectors because it’s not clear who the
big winners are going to be. The wearables market and IoT will be about looking at who has a value proposition that
can withstand the test of time, generate real revenues, and grow into being able to address multiple markets with
different products. Who’s going to be able to monetize on the information that’s generated.”

13. Innovation executive at an electronics company
The wearables market still is searching for a device with a winning formula to boost adoption. The formula will require an
acceptable physical load for the user, easy interaction with the device, and fashion or conventional acceptance. Google
Glass fails with regard to conventional norms because of its asymmetrical design. A successful wearable device also will
provide useful information that cannot be collected in any other way. Monetization will come in the services that analyze,
compare and diagnose the data. The wearables market is expected to ramp from late 2015 into 2017.
 “There’s a winning formula in wearables, but we haven’t seen it pan out yet. It is different than in other consumer
electronics devices, and it makes it a lot more challenging to convince a general population to adopt it.”
 “The social weight is a measure of whether a wearable is going to make it or not. This social weight is made up of the
physical, cognitive and conventional loads.”
 “The physical load is having to wear it, and that’s an extra cost for the user because people don’t generally like to
hang things on themselves unless they get some value that they can’t do without.”
 “Glasses can add value. They help you see, but otherwise you wouldn’t be willing to put them on. On your wrist is
more tolerable. Shoes are even more tolerable because you’d see the device less.”
19
Wearable Technology
“The cognitive load is the user’s interaction with the wearable. By nature, wearables are small because we’re limited
on how much we can carry attached to ourselves. There’s no large touch-enabled screen, no keyboard, no mouse, no
way of entering text or communicating with the device. That makes it challenging to design a user interface for
wearables. And most of the wearables today, including Google Glass, have no user interface, which limits them to
one or two functionalities.”
 “Finally, there’s social convention. That’s an example of where Google Glass
fails. … They made serious design decisions that worked against them. One
There’s a winning formula in
was that it’s not a symmetrical look. … There’s also no way for other people
wearables, but we haven’t seen
to know if the camera is on or not, and that’s created a concern about
privacy.”
it pan out yet. It is different
 “Ubiquitous computing will bring a lot of value for users. We will get there—
than in other consumer
having a computing mechanism around and on us, all the time, sensing us
electronics devices, and it
and monitoring us. But we first need to solve these issues. They should be
makes it a lot more challenging
small and easy in their physical load, they should be very easy to use and
interact with, the cognitive load, and they should fit in with our social and
to
convince
a
general
fashion conventions.”
population to adopt it.
 “Early, successful wearables will not be about getting email or text
Innovation Executive
notifications. The broadly adopted ones will come from outside normal
Electronics
Company
consumer areas by providing the types of features that we do not have any
other way to achieve.”
 “We’re going to see wearables start ramping in late 2015, into 2016 and 2017.”
 “[There will be monetization] for the device itself, whether it’s directly or indirectly, either through a B2C business
model or through a more complex revenue model like carriers who have financed phones, bringing down prices from
$700 to $200.”
 “The example of the blood pressure monitor would require a lot of service, analytics, comparisons to other users, and
connecting with a medical service. My guess is most of the money will come from enabling those services.”

14. Hamid Farzaneh, CEO of Sensoplex
Companies like Apple, Google, Samsung and LG will be among the winners in the wearables market through their
multipurpose devices that will improve on current devices by Fitbit and Nike. Sensors will be important components in
wearables and InvenSense, STMicroelectronics N.V. (STM) and Bosch will be among the winners. Some of their success
likely will stem through acquisitions of startups that are developing technologies in these areas. Texas Instruments is a
big player in optical sensors. ARM is gaining in the industry because it provides the computing core. In another growing
area, Nordic Semiconductor ASA (OSE:NOD), Broadcom and Freescale are leading in the integration of BLE. Texas
Instruments and Linear Technology Corp. (LLTC) lead in wireless chargers, which will be coming down in price and add to
the appeal of wearables. Sports/fitness is one of the main drivers of the wearables market, which will be worth
approximately $24 billion in four years.
 “Sales in wearables are already growing.”
 “The current primary driver for wearables is sports. The first generation of these devices was essentially step
counters with accelerometers as their only sensor. Some companies claimed to count calories, but that data was all
over the place. Generation 2.0 is now coming out, and it’s also focused on activity detection and monitoring but with
more sensors and better algorithms. These sensors, in addition to accelerometers, are gyroscopes and
magnetometers plus, in some cases, pressure sensors to detect elevation. The third generation is going to have the
same kind of improved activity detection and sensors along with some biosensors and/or environmental sensors.”
 “The market size estimates [$3 billion to $50 billion by 2018] are big numbers and allow the imagination to fly. …
But if we were to really dissect the market, I would not even attempt to size the market for head-mounted optical
displays because it will be much smaller than anyone predicts. If we exclude that and look at the other main
markets, you have the sports devices, medical devices. Portable glucose meters will be the largest chunk with
numbers around 70 million per year. Looking at sports and wellness and activity devices, I can see that number over
20
Wearable Technology
the next five years growing to a few hundreds of millions of devices. With the added sensors, their average selling
price will probably be in the range of $60 to $80 in about three years. If the market is 400 million in four years and
the ASP is $60, that’s around $24 billion—not a bad market.”
 “In order for a product to be attractive to the average consumer, it needs to be very comfortable to wear, it needs to
be light so that people can forget they’re wearing it. It also needs to do something people can’t achieve through a
smartphone. Google Glass, as it is today, is very limited. I don’t see consumers benefiting much from the current
Google Glass. The problem of smartglasses is that the optics are too heavy and cumbersome and the performance
too limited. It will probably take one or two generations of innovation in optics to be able to physically build
something that provides both a good value and a good experience.”
 “In three to five years the market will be divided into two different
I would not even attempt to
sandboxes. One sandbox, which might represent 60% to 70% of the market,
size the market for headwould be driven by very large companies like Apple, Samsung, Google and
LG, and they will market multipurpose devices. The Apple Watch will
mounted
optical
displays
probably include most of the functions that Fitbit and Nike FuelBand have,
because it will be much smaller
plus more. However, that won’t be good enough for serious athletes. For
than anyone predicts. If we
them, there will be more vertically focused companies that will dominate
exclude that and look at the
each sport. Some of these companies might not yet exist, and some are just
now emerging. … This also applies to devices made for seniors and their
other main markets. … I can
families. These markets will be dominated by narrowly focused and highly
see that number over the next
expert companies that really understand the related needs and
five years growing to a few
communities very well. Sensors will be an essential part in all the devices.”
hundreds of millions of devices.
 “The companies that will benefit the most will be the pure-play sensor
With the added sensors, their
companies. InvenSense recently announced two software company
acquisitions for which they spent some $80 million. Their approach is to
average selling price will
move up in the solution by providing not only the components but the
probably be in the range of $60
algorithms. That can be valuable, but from my experience, the payback is
to $80 in about three years. If
mainly through increased market share rather than software revenue. I
the market is 400 million in
think InvenSense, STMicro and Bosch will be on the lookout for startup
four years and the ASP is $60,
sensor companies.”
 “For Gen 2.0 sports devices, the three leading sensor companies are
that’s around $24 billion—not a
InvenSense, Bosch and STMicro, and they will benefit from the growth in
bad market.
wearables. For the pressure sensors, there’s Bosch and some Japanese
CEO, Sensoplex
companies. For Gen 3.0, which will include bio sensors such as heart rate
monitoring, TI is well positioned for optical sensors.”
 “The problem with many sensors such as optical is that most of them are extremely sensitive to noise, and when
there’s motion, the amount of noise can be extremely high.”
 “It’s not only the components that are important but the ability to integrate the components into a solution that is
precise and useful enough.”
 “Intel is very actively working on platforms for the Internet of Things and wearables. But coming from the
semiconductor industry, we’re familiar with a lot of the projects Intel has tried to pursue over the years. They have
spent large amounts of money to acquire companies and technologies, but they’ve often been one step removed
from the customer and, because of that, have not always benefitted much.”
 “ARM is gaining market share as the premier processor for wearables. My teams are currently developing two
platforms, and both are ARM-based. ARM provides the physical computing core and can run different kinds of
operating systems. Linux is one of the OS contenders for some of the applications but not ideal for portables that
require a very small footprint operating system. No operating system seems to dominate yet.”
Miscellaneous
 “In a wearable device that’s easy to wear, the battery cannot be too large. We’re putting a lot of effort to minimize
energy consumption. But that said, it’s never little enough and there’s never a battery that is small enough or has a
ratio of energy to size that’s good enough.”
 “People want to have longer battery life and not recharge every night as with their cell phone. But as you add more
sensors, the energy consumption skyrockets. … More capabilities and more precision are going to cost more energy.
21
Wearable Technology




Displays also consume large amounts of energy. But the amount of energy is dependent on the volume of the
battery.”
“Systems integrators will play a key role, and industrial designers as well, to determine where we place the battery
and how large it can be.”
“Another area of great interest is the transmission of the data. Some amount of processing will be done on the
device so the raw data being collected can be reduced. But you still have to transmit that information to a smart
device and to the cloud. Currently, the preferred mode of wireless transmission is a variation of Bluetooth—lowenergy Bluetooth or Bluetooth 4.0. Component makers have the opportunity to increase sales very rapidly in that
area. Until a year ago, they were limited to the Apple devices and wearables. Now Android devices have also adopted
Bluetooth 4.0, and the number of devices is increasing. … Typically, it is companies that have adopted the ARM
processing core that are also adding Bluetooth low energy in a single chip solution. That will be a major area of
growth in the wearables industry.”
“There are also companies that are making antennas that are small enough and have a good performance. That’s
also going to be an area of growth. I think most of the companies involved there are medium-size and small ones.”
“Another trend is wireless chargers. You can put your device close to the transmitter, and through magnetic waves
they recharge overnight. Wireless chargers are still very rare these days. TI is one of the main companies in this, and
they have a solution. Linear Technology also has a solution. It is the traditional analog semiconductor companies
that have that technology. The technology used to be very expensive but prices have come down, and it’s now
attractive for wearable devices that are going to cost less than $100 for consumers.”
15. Wearable device strategy executive
The wearable tech segment still is being defined, so winners and losers have not yet emerged. Wearables will not be just
redesigned smartphones because design, personalization and customization are critical to this market. Major players like
Apple, Google and Samsung will bring volume to the segment, possibly with the release of the Apple smartwatch. Pebble
is a leader in the smartwatch segment because it has customized watches to connect to smartphones and has made
them widely available. However, the source cited room for higher-end wearables, perhaps from luxury watchmakers. The
component makers in wearables will be the same as those involved in the smartwatch industry, but work still needs to be
done in improving battery life, displays and sensors.
 “Sales are growing and projections are for more growth. You can imagine a percentage of all the glasses and
watches sold every year becoming connected devices. There’s huge potential. But it will take awhile to get there.”
 “There will be a major, well-established players like Apple, Google or Samsung who will be able to bring volume into
this segment, who will demonstrate that the numbers are there.”
 “Apple’s smartwatch will democratize the market in the sense of
awareness, even if not price. There will be room for other companies then to
Apple’s
smartwatch
will
fill in the gap in price points below and above Apple.”
democratize the market in the
sense of awareness, even if not
 “It’s too early to tell who the winners and losers will be in wearable
technology. We’re still defining the segment.”
price. There will be room for
 “Companies that understand that personalization, customization and
other companies then to fill in
design are critical and that they come first and are able to execute on this
the gap in price points below
will be the winners. It’s not going to be about specs or features.”
and above Apple.
 “You’re going to see the industry of consumer wearables steer away from
spec sheets and what’s under the hood and focus on design, usability and
Wearable Device Strategy Executive
user experience.”
 “The big players like Apple, Google and Samsung are waking up to this and
will address it. But they’re approaching it the wrong way. They’re taking the phone and shrinking it down.”
 “Fitness bands are one-purpose devices. People wear them and forget them. They gather data that can then be
uploaded to track their exercise and health. They’ve become a commodity that you can buy for $10. Smartwatches
can do this and more.”
22
Wearable Technology
“Pebble is one of the leaders in smartwatches because they took the watch and evolved it in a customizable way,
with different bands, materials and colors and provided an added experience and value by connecting to the cell
phone via Bluetooth. And it is available even in stores like Target.”
 “The smartwatch market is a particularly ripe wearable because people are familiar with what a watch is. You can
improve watches and make them connected devices—to add functionality
that are useful in this day and age.”
 “The smartwatch is to the fitness band what the smartphone was to the
The smartwatch is to the
feature phone.”
fitness
band
what
the
 “As far as component manufacturers, the sensors and displays are
smartphone was to the feature
important. All the component suppliers making components for phones are
phone.
going to benefit from wearables. The challenges here are in display, battery
and sensors. We need more efficient batteries, better displays that are
Wearable Device Strategy Executive
readable in daylight and are beautiful and low-power, and lots of sensors,
some of which are still costly.”
 “Things like heart rate monitors … will become ubiquitous. The sensor manufacturers will benefit. Companies that
can make small, high-quality, low-power, daylight-readable displays are going to be the winners.”
Miscellaneous
 “People with expertise in designing both jewelry and phones are going to be the winners. It’s not just sensors and
processors and displays and batteries. There’s going to be rich materials, like metals and sapphire glass that is used
in watch making. It’s going to become commonplace in consumer electronics.”
 “The watchmakers have a potential in what they can do in this area if they can dive in and learn the skills of phone
makers.”
 “You have to develop an integrated ecosystem around the wearable. You can’t shrink down the phone operating
system to a watch like Android Wear is doing. It’s not efficient and it’s overkill. Either we wait for more software and
you can have that kind of performance on a watch without sacrificing battery life, or we can put in lower-end ARM
processors running a lightweight, real-time OS that is much more efficient. It’s a better value proposition. There’s a
whole area of software expertise that’s going to become critical for smartwatch makers. Battery and display
technologies are not going to improve fast enough for consumers to get the performance in terms of battery life that
they want from smartwatches.”
 “Removing a wearable to charge it introduces friction. You’re going to start to forget the wearable, but we want that
stickiness and users want that stickiness. The companies who do this will win.”

2) Industry Specialists
Five of six sources expect meaningful wearable technology market growth during the next three to five years. Two of these five
sources offered growth forecasts: One predicted a 3% to 5% increase if the Apple Watch is not launched until 2015 and 15%
to 20% if it is released next year. The other thinks 25% year-to-year growth is attainable. One source said Google Glass
interest among consumers has stalled, another said enterprise applications for smartglasses are on the rise and that Google
Glass will have 70% to 80% of the market, and a third said sales of activity and fitness bands have plateaued. Market
categories expected to drive wearable device growth include health and fitness, medical, watches and enterprise
applications. The market is highly fragmented; more than 40 companies were discussed by these six sources. Those
frequently mentioned as possible winners were Apple, Samsung and Google. Market challenges include developing a
meaningful application that integrates into consumers’ everyday lives; providing more meaningful contextual data, privacy,
security and device battery life; and improving sensor technology and device durability.
KEY SILO FINDINGS
- 5 of 6 expect meaningful wearable technology market growth over the next 3 to 5 years.
- Growth projections ranged from 3% to 25%.
- Health, fitness, medical and smartwatches are expect to be the growth drivers.
23
Wearable Technology
- 40 companies were discussed by these 6 sources.
- Most frequently discussed were Apple, Samsung and Google.
- Google Glass has failed in the consumer category.
Miscellaneous
- Potential roadblocks to widespread adoption include the lack a meaningful application that integrates into
consumers’ everyday life, the lack of more meaningful contextual data, privacy, security, device battery life, and the
need for improved sensor technology and device durability.
1. Ori Inbar, CEO and cofounder of AugmentedReality.org, a nonprofit tracking the wearable industry
The market for wearable devices will surpass the success of the smartphone, with enterprise adoption of smartglass
devices already underway by large companies. Consumer adoption for wearable devices will occur slowly; critical mass is
expected between 2017 to 2020. Smartglasses are poised for sudden growth by mid-2015, fostered by the release of 10
new smartglass devices this year. Google will be the main beneficiary, followed by Seiko Epson Corp. (TYO:6724) and
Vuzix Corp. (VUZI). Apple, Samsung and Motorola will gain traction as wearable device adoption gains momentum. Within
the supply chain, market share battles are in progress; Qualcomm, Nvidia Corp. (NVDA), Intel and Texas Instruments are
competing for CPU/GPU dominance while InvenSense and Plantronics Inc. (PLT) are vying for the sensor market. Still
under the radar but crucial to expansion are companies that make input devices to track eye, muscle or voice input, a
segment dominated by startups.
 “My focus is on a specific area of wearables; I have the most insight into smartglass products. It is definitely an
important year for this slice of the wearable market. It’s the first time you’ve seen 10 new smartglass products
released. Before this there really was nothing.”
 “I would estimate by the middle of next year there would be 1 million
[smartglass units in circulation]. Prior to this, we only have seen a few
I would estimate by the middle
thousand units in the marketplace, mostly in the fields of research and the
military. We almost have to say things are starting at zero, so obviously
of next year there would be 1
sales will jump. There were several thousand units out there, so in the next
million [smartglass units in
year we could see a 1,000% increase in units [year to year]. The percentage
circulation]. Prior to this, we
does not say a lot about sales. It says more about units and interest.”
only have seen a few thousand
 “In the smartglass segment no specific product is hot, and in the consumer
units in the marketplace,
space there is nothing comparable to the smartphone. In enterprise and
business, the larger Fortune 500 companies are driving the market and
mostly in the fields of research
buying smartglasses. On the consumer side, they are still too bulky and
and the military. … With
pricey. But Google is finding a market in large enterprise.”
another nine to 10 smartglass
 “Looking at the entire wearable market potential, it’s useful to look at the
products released this year, we
smartphone market. When [wearable tech] takes off, for every smartphone
could see a million units. Of the
sold there will be something on glass, on input devices or on the wrist. When
will it hit the mainstream? Probably between 2017 and 2020.”
million units, Google will
 “If you look at the smartphone market you can gauge the trajectory of
account for 70% to 80%.
growth. It took about 10 years, from when smartphones were first
introduced. Smartglasses started a couple of years ago. Adoption by
CEO & Cofounder, Nonprofit Tracking
the Wearable Industry
enterprise is happening now. Everyone is looking at the imminent release of
the Apple Watch, which could change things for the market. The wrist will be
the first area to take off when wearable’s become common.”
 “Looking at the market, we see fitness and health leading, and that will continue for the next couple of years.”
 “In the area of my focus, namely smartglass, [consumers abandoning their wearable devices] has not been the case
because the value of the device has gained attention and interest. We especially see the use cases increasing and
growing adoption in enterprise. SAP [AG/SAP] has shown a tremendous interest because of the feedback they’ve
gotten. Wal-Mart [Stores Inc./WMT], Verizon [Communications Inc./VZ] and others have shown interest. The
aerospace industry has been big on [smartglass], with interest from Lockheed Martin [Corp./LMT], the Boeing
Company [BA] and [Boeing’s] McDonnell Douglas and not just for military uses.”
24
Wearable Technology
“With another nine to 10 smartglass products released this year, we could see a million units. Of the million units,
Google will account for 70% to 80%. The remaining percentage will come from companies like Vuzix, which struck a
deal with Lenovo [Group Ltd./HKG:0992] to resell smartglasses in China. Epson is making an impact through its
projection technologies, using the projector for eye display. … Meta is a Silicon Valley company. Recon [Instruments]
is selling mostly for sports, skiing and bicycling. And then there’s Google Glass. I do think it’s possible that there
could be acquisitions … in the next two years.”
 “Apple, Microsoft and Samsung are starting to move in to the market, but I would look at 2016. Sony
[Corp./TYO:6758] is big along with Canon [Inc./CAJ] and LG. All of these guys are looking at the market and slowly
getting into it. All of them are watching what’s happening, but they have not launched their own products.”
 “It is way too early to predict the winners for smartglasses. Google was a pioneer. Epson and the others mentioned
before are all players, but it is too early to pick a winner.”
 “In the next year or two, the 800-lb gorilla will take its position. Everyone expects Apple to lead, with Samsung and
Motorola following as they did in the smartphone market. … Samsung has already made a bunch of attempts without
success. Motorola announced a new development, and it’s gotten good feedback but has not yet reached market.
Pebble is the darling of the startup world, but Apple can wipe them out with one announcement. Facebook acquired
Oculus for wristbands, but that is not exactly in the same space we are talking about. Amazon has shown a strong
interest in wearable technology and has made some strong hires from Google Glass.”
 “Looking at the supply side from the bottom up, there is a fierce battle going on for market share at the CPU and GPU
level between Qualcomm, Intel, Texas Instruments and Nvidia. So far Texas instruments is doing well with its lowenergy Bluetooth. Qualcomm is a leader in mobile devices and is trying to make the jump to wearables. Within this
group there will be winners and losers at some point. The next layer is sensors and cameras, as well as batteries,
and there’s a big battle going on there. For sensors we have InvenSense and Plantronics. And for cameras, the big
ones make in-depth cameras and a Microsoft Kinect base. There are a few others like Softkinetic and Movidius in
this space, and we will see some winners in the area soon. I suggest you look at Google’s Project Tango with
attention to the names of companies and its partners section”
 “You can also look at the software that goes into smartglass or other wearables. We will see some big developments
from these augmented-reality companies, but today they are mostly seeking investors. Companies in this layer
include Daqri, APX Labs and Metaio [GmbH]. There are a couple of others creating tool applications. Blippar is one of
the fastest-growing companies in augmented reality.”
 “Companies making smartglasses include Google Glass, [Epson’s] Moverio, Vuzix, Lumus, Optinvent, Meta, Recon,
Atheer Labs, Laster [Technologies] and Glassup.”
 “One area of importance but under the radar or overlooked has been input devices. With wearable devices, there is
no mouse, no touchscreen and no keyboard to enable the wearable to interact with the things around us. Overlooked
are the natural user interfaces like a ring, so you can just point at things for input. There is [Thalmic Lab’s] Myo
motion and gesture-control armband that reads muscle movement.”
 “There are a bunch of startups in the input area, but no one leads. Intel has invested in the area. Leap Motion makes
a computer hardware sensor device to support hand and finger motion for input. The Myo armband is promising.
Muv Interactive and Nod [by Variable Inc.] allow you to point at things for input. So far we don’t know who leads.”
 “Some of [the startups] have had [financing] success on Kickstarter, and now there is more interest from venture
capital. But all of them have used the Kickstarter model to get their products on the market, which is a year away.”
Miscellaneous
 “Security and privacy are friction points. We will get used to wearables and concern will subside.”
 “Everyone will eventually be wearing them because of the benefits and value. You will be left behind if you don’t have
a product. We’ll get to the point where you won’t want to send your kids to school without a smartglass device so
they don’t fall behind in their work. Exactly when this will happen, I don’t know. I can tell you the market is imminent,
and hedge funds and other investors focused on developments within the next three months, six months or 12
months need to look farther out.”

25
Wearable Technology
2. Former employee for a component company that supplies early prototypes for the Google Glass
This 56-year-old sound installer for a major movie studio said wearable technology such as Google Glass has hit a wall
with consumers because of price and application functionality. As a former worker for a company that manufactured
components for early prototypes for the Google Glass, he said the medical practitioners and possibly the energy sector
stand to benefit the most from anything produced during the next few years. Consumers are just not embracing the
technology because of price and cultural gaps. Fitbit is a good product but likely will get swallowed up, alongside Pebble
and other smaller companies. Apple could gain share but is late in the game.
 “I used to work for a company that manufactured some of the smaller components for the prototypes for the Google
Glass, and I had an early pair. I thought the smartglasses were cool, but I found myself tossing them in a drawer a
few months after getting a pair.”
 “Average consumers are priced out of the market for Google Glass, but
there could and probably should be some very real possibilities expanding
Business is ready for things like
use of the product in the medical and energy sectors. Those areas are
Google Glass, while consumers
where the technology across the board is price-to-purpose balanced.”
 “Fitbit has reached a market plateau with consumers. If they don’t do
are
still
trying
to
get
something different with it … they will likely be swallowed up by the big guys
comfortable
with
making the smartwatches, like Samsung and LG.”
smartwatches.
There
is
a
large
gap in income to product
 “Apple’s getting in the game a little late if they intend to release a
pricing to fill before it hits
smartwatch anytime in the next few months, and certainly they must know
that. But I would expect a lot of people are waiting to buy a smartwatch until
critical mass with consumers.
after they see what Apple puts out there.”
Former Employee
 “Garmin will stick to GPS services if they’re smart. They have that cornered,
Google Glass Supplier
and they do it well. The other guys, like Fitbit and Pebble will probably get
sucked up by the larger corporations like Samsung and LG because those
companies will be putting out better products that do all the same things; plus, they’ll be working on expanding the
options for apps and more direct email and voice technology.”
Miscellaneous
 “Business is ready for things like Google Glass, while consumers are still trying to get comfortable with
smartwatches. There is a large gap in income to product pricing to fill before it hits critical mass with consumers.”
 “I just won’t likely be one of those wearing Google Glass or other forms of technology like that because it’s just not a
must-have for me. I would probably use it for about a month and then forget about it.”
3. Wearable startup executive and industry specialist in Boston
Apple will lead the way in wearable devices and bring in more users. Jawbone is working to deliver more digestible data
that can be interpreted for everyday life. Motorola and LG may become potentially serious players while STMicro, LG and
Samsung may play relevant roles in the supply side. Wearables still need to provide more meaningful and contextual
data, and integrate into day-to-day behaviors. Battery technology and durability are not yet considered enough in the
wearables industry but are crucial to successful adoption.
 “I see a large-scale, broad increase in sales across the board. I’m not sure it’s matching some of the projections that
you have seen from some of the industry research groups over the last five or six years. I would say sales would
increase somewhere around 25% year over year.”
 “There will be continued growth. It’ll really depend on what Apple comes out with. It’s one of the areas where you can
see new customers getting into the space. Today, with all of the people who have been buying into the wearable tech
space, there’s been some repeat buying and some potential new folks who are a little bit timid about making
purchases.”
26
Wearable Technology
“There’s going to be a lot of people who will buy into wearables because Apple puts its stamp of approval on it. Even
in the delay it will push a large number of units even if it’s not very good, because it’s an Apple device.”
 “I’m not sure if smartwatches are doing what they need to do. We’re not getting the right mix of form, function and
aesthetics. We’re not going to see a ton of growth in the Android smartwatch space beyond 10% to 25%.”
 “The explosion for wearable tech is still three to five years away. That’s driven by two things. One is battery [life]. Two
is, more importantly, sensor technology. We need more and better sensor technologies to make these devices truly
worth strapping to your wrist.”
 “Fitness is a big component of it but not necessarily going to lead in
wearable tech adoption. The market is quickly breaking down into whole
I see a large-scale, broad
different segments. GPS watches have been around a long time; people are
increase in sales across the
only starting to call them wearable electronics. If you break down the day
board. I’m not sure it’s
into a 23-and-1 sort of thing, you’ve got lifestyle and active fitness. There will
matching
some
of
the
still be a lot of devices for that one hour a day. There will also be lightweight
fitness trackers for people who don’t want a more complicated smartwatch.
projections that you have seen
Most of the smartwatches can’t stand on their own. The real price is a
from some of the industry
smartphone plus a smartwatch. Most of them are way too big.”
research groups over the last
 “Apple stands the best chance of getting beyond that early adopter in that
five or six years. I would say
bulky smartwatch space and grabbing that market. Apple may drive where
sales
would
increase
Samsung, LG, and Motorola haven’t been able to. There’s going to be a huge
amount of growth in the application specific fitness tracker.”
somewhere around 25% year
 “Fashion will play a large role. Michael Kors [Holdings Ltd./KORS] is building
over year.
up a new innovation and technology team in New York. To get early adopters
Wearable Startup Executive &
to majority adoption, you need aesthetics; that’s a large part of the
Industry Specialist
experience of wearing electronics on your body all day. While people have
welcomed electronics into their lives, you’re starting to see information
electronics fatigue. You want to be able to iterate those devices in a way where they feel really seamless and don’t
get in the way. If you’re going to wear Google Glass, the reward in terms of functionality is going to have to be really
high for you to put it on and walk around with it all day.”
 “[Nike calls users tossing their devices aside] ‘the leaky bucket.’ … There’s a lack of stickiness. Once you know what
your score for the day is or how many calories that you’ve burned and those numbers don’t change a lot, you think,
‘I’ve connected a number to an experience, and I kind of now get that.’”
 “I don’t think the [Samsung] Galaxy Gear is really doing anything past that. What Jawbone is doing right now trying to
provide deeper insights around sleep. It’s interesting to look at that data and provide some context. It’s not perfect in
closing that positive feedback loop, but they’re doing more with that data that’s insightful.”
 “You need deeper and more meaningful contextual data. The sensors that come off this data need to be more viable.
Just tacking an accelerometer on your wrist doesn’t give you enough data even beyond these six months. What
they’re able to give is really shallow and peripheral. That’s why you see companies trying to go towards heart rate
and blood pressure, with accurate or potentially borderline clinical applications.”
 “Fitbit is going really wide by going outdoors in various retail environments. I’m not sure they’re building the right
consumer experience or that what they’re doing is making sense long term.”
 “I like what Jawbone is doing even though I have questions about their engineering quality. They’re taking the right
approach to try to make the data more contextual to my life. Jawbone is more in the driver’s seat, especially with
Nike backing out of the hardware.”
 “Apple is going to be a winner in this space. I know they have a hardware ecosystem. They don’t do software
experiences well. … I think their success will be focused on how well they can support their developers. Depending
on the functionality of the Apple Watch, there’s probably a 12- to 18-month ramp. That may be why they’re not going
to launch the products in September, to give the developers time to launch some applications.”
 “Samsung is throwing spaghetti at the wall. LG and Motorola seem to get the aesthetics much better. Samsung is
doing heart rate monitoring, which isn’t really working well. They don’t want to miss wearable tech so they’re
releasing a product every six months.”
 “If Motorola can stay relevant in this space, it kind of gets it with the [Moto] 360. LG kind of gets it with the round
faces, and better aesthetics are form factors. They’re poised to potentially continue to be serious players.”

27
Wearable Technology
“Garmin is going to continue to struggle. Someone’s going to come in and apply a lot of the tech for smartwatches
and fitness trackers. There’s a huge gap for someone to come in and crush the market for GPS fitness watches.
There’s a space for someone to make a couple million units a year and turn a big profit. Garmin has so many
features in these things. They sell for $700 a pop and sell 2,000 of them a year. Longer term, they’re not
innovating.”
 “Fitbit is currently selling a lot of units. They have some cheaper devices like the Zip. They’re blowing out products
that really are just pedometers without a strong experience. Eventually they’re going to cycle through a lot of people
who don’t want to go back to the devices they’re selling, and they’ll kind of be stuck.”
 “Nike has both lost and won. They backed out of hardware because they became afraid of what Apple was launching.
They’ve hitched their wagon to Apple.”
 “I could see Nike getting back into wearables eventually and building a
much larger business in wearable. They have more authenticity in the
Apple is going to be a winner in
athletic and fitness space. They could come back in 18 to 36 months and
this space. Their success will
do something interesting, especially as some of the technology advances.”
be focused on how well they
 “Microsoft is eventually going to jump off the shelf and get in the game.
They just don’t have a platform right now to plug it into. They’re going to
can support their developers.
have to decide whether they want to do business with Android or iOS.”
Depending on the functionality
 “I still think Google Glass will grow but not as a consumer play. It’ll be a
of the Apple Watch, there’s
business-to-business play: doctors, industrial workers, things like that.
probably a 12- to 18-month
There’s a market for what they’re going to be coming up with in the future.
They shouldn’t have led with consumer.”
ramp. That may be why they’re
 “There’s a few players right now. I think STMicro is doing a really good job
not going to launch the
for some of these more application-specific devices. Samsung and LG are
products in September, to give
going to be large players in the space, whether or not they’re making a lot
the developers time to launch
of wearable devices themselves. They’re driving a lot of innovation in
some applications.
display and battery technology.”
Miscellaneous
Wearable Startup Executive &
 “The big problem in the industry right now that people aren’t talking about
Industry Specialist
is battery technology. Getting the energy density and form factor for those
batteries in terms of shape, chemistry and density is needed. There’s a lot
of these Android Wear smartwatches that are just a takedown on the phone, and it’s not power-efficient. There’s a
middle ground between having almost no operating system on a Jawbone and having basically a phone on your
wrist.”
 “One thing that is different in wearable devices is durability. A lot of companies don’t think about this at all. There
have been recalls of Jawbone and Fitbit. Nike was the only company that didn’t have any recalls for a long time.
That’s a testament to engineering.”
 “Deeper sensor technology that allows more feedback about what’s going on in my body is a big part of the future of
wearables. The big direction is biometric authentication and mobile payments. It’s going to go away from notifying
me every time I’ve got an email and integrating in my life in a way that allows me to keep my phone in my pocket for
interacting in my daily world. Deeper reading and apps will stay on my smartphones. Wearable tech woven into
fashion or apparel or footwear that will give you more smart information. It has to happen in a much more passive
and less intrusive way that feels like it’s a part of my day-to-day life. You’re going to see a large consolidation in the
wearable tech space for a while. There will be more technology-specific plays that will be relevant in the industry in
the near term.”

4. Founder of an online publication covering men’s fashion and technology
Wearable technology is here to stay, but growth will be slow and gradual. Apple and Google are probable winners in the
next 12 months. If Apple releases the device in the next three months, the wearable tech market could see a 15% to 20%
bump. This source expects Apple to introduce the Apple Watch early next year, which would push industrywide growth to
3% to 5%. He expects the overall market to grow into $5 billion market by 2018, with widespread adoption by 2020.
Fitness leads the market, but health and medical uses are growing fast. Jawbone’s activity device and Samsung’s
28
Wearable Technology
smartwatch remain popular, but Google Glass may have lost its appeal on the consumer side. Fashion, design and
wearability will become increasingly important; brands like Burberry Group PLC (LON:BRBY), Diane von Furstenberg and
Ralph Lauren Corp. (RL) already are working on smartgarments. Smartfabrics are not squarely in the wearable tech
sector, but the segment is growing fast, with companies like Clothing+ making an impression on technology players.
 “There are wearable technologies coming out every week, and we focus on what we think looks and functions well in
men’s wear. Over time there has been an increase in use of and interest in wearable technologies. It is a growing
market. Right now the big thing is the smartband and the smartwatch, the latter being driven by Samsung. We see
more fashion brands getting involved with wearables, especially on the female side.”
 “As for sales, I expect to see an increase in the next three months if Apple
decides to release the Apple Watch this year. If it does, we may see a 15%
to 20% increase in smartwatch sales this year. However, I don’t think
As for sales, I expect to see an
Apple’s iWatch will be available until next year. If Apple doesn’t release in
increase in the next three
the next three months, I think wearable sales will increase in the 3% to 5%
months if Apple decides to
range.”
 “There are not too many others coming out with wearable devices for the
release the Apple Watch this
rest of this year. Sony has talked about releasing a smartwatch next year,
year. If it does, we may see a
and Swatch [Group Ltd./VTX:UHR] also has announced the release of a
15% to 20% increase in
smartwatch next year. In the next year overall I think wearable technology
smartwatch sales this year.
will grow 25% to 30%, but we are not yet at the point where … everyone has
However, I don’t think Apple’s
a wearable device. The adoption will be slow with a gradual increase and
interest in wearables, especially for the already available products such as
iWatch will be available until
watches and bands.”
next year. If Apple doesn’t
 “The biggest seller right now is the smartband or the activity band. There
release in the next three
are a number of companies driving device sales, such as Jawbone. We also
months, I think wearable sales
see some smartshirts coming to market. Ralph Lauren just launched its
will increase in the 3% to 5%
Polo Tech Shirt at the U.S. Open.”
 “Specific numbers on market potential are hard to find. If I had to pick a
range.
number for the market potential, it would be closer to $5 billion by 2018.
Founder, Online Men’s Fashion &
Large-scale adoption will be gradual and slow. It will not occur overnight. I
Technology Publication
think we’re looking at widespread adoption by 2020. The pace depends on
Apple and Samsung, and on the fashion side Burberry and Diane von
Furstenberg, two fashion brands that are getting into wearables. At some point there will have to be collaborations
between the developers of wearable technology and the leading fashion companies. Personally I don’t think this will
happen in the near term; we should look further out to 2020.”
 “Fitness is in a leadership position, followed by a tossup between health and enterprise. Fashion is a big area, but
when it comes to sales, much more money is being invested in health.”
 “Many wearable text users [wearing wristbands or devices that display text only] abandon devices. It happened to
me. I bought a Jawbone. When I first got it, I thought I would use it all the time. Now I only use it as a sleep tracker. I
started using it less after three months, in part because I’m not very active.”
 “I would not say consumers are flocking to wearable technology. But I also don’t think the potential for the market is
overblown. Lots of activity trackers are out there. Although that market may be a little saturated, we are going to see
a gradual increase in use of wearable technology.”
 “Overall I think wearable technology has a long way to go, but eventually we will see embedded devices such as
sensors in wearable merchandise. I think the Google Glass thing has worn off on the consumer side. There’re two
reasons: First, you have to go back to the fashion issue. Google Glasses simply look bad. We have to get to the point
where people want to wear a device, but it has to be aesthetically pleasing. Second, concern over security and
privacy is a big thing. People are uncomfortable releasing personal information. There are a lot of things about
Google Glass that need to be fixed. But it is not going away, and it has done a lot to raise awareness.”
 “The winners would have to be Google and Apple. They are driving the market. There are a number of independent,
smaller companies that also will be winners.”
29
Wearable Technology
“I don’t yet see any one company losing. Some Kickstarter companies may fall behind due to lack of money. And at
the end of the day, the losers may be brand names you’ve never heard of.”
 “Apple will see substantial sales growth when they come out the Apple Watch because sales potentially will jump
from 0% to 70%. From what I’ve heard, they are still working out the kinks. They have been talking about the Apple
Watch for so long they almost have to show something to the public at their annual show in September to generate
continued interest.”
 “I can’t speak to the supply side. I’m not familiar with the players.”
 There also are a lot up-and-coming brands that are not necessarily working in their own specific device but rather
consulting with larger companies. One of them is Clothing+. Most of the startups are trying to take a bandage of the
fitness sector. Other new wearable brands include [ConnecteDevice’s] Cogito smartwatch has a smartband with an
embedded NFC chip. The band is nothing special, but the chip is.”
Miscellaneous
 “There are a lot of brand-name companies that do not make devices per se, but are part of a fashion industry group
making smartfabrics and textiles. Mizzen+Main, for example, is the men’s wear company making performance
dresswear shirts for men. They have taken the fitness approach to creating fabrics that wick moisture or dry quickly
and combined it with a tailored design in an upscale men’s shirt. These textiles are not wearable devices, but they
are certainly considered smartfabrics, and we are seeing significant growth in this area.”

5. Lubna Dajani, principal at Stratemerge and active in initiatives on wearables, 3D, AR, cashless payments and IoT
Adoption of wearable technology continues to evolve, led by fitness and healthcare applications. Because Ms. Dajani
advises numerous wearable startups and enterprise companies developing technologies, she declined to pinpoint
winners or losers. Activity trackers and wearable health monitors are popular, but smart textiles and clothing are
beginning to gain traction. Key players in the supply chain are the manufacturers of embedded technology, biosensors
and connectivity components. The pace of growth could be tempered by the development of strong privacy controls, and
any security breach would undermine the wearable market. Widespread adoption of wearable devices just now reaching
the commercial market could take another five years.
 “Of course the field of wearable technology is increasing. As a whole,
wearables are here to stay. They will not only be worn but will become
As a whole, wearables are here
increasingly important and play a bigger role in our lives, not just as
to stay. They will not only be
commercial fashion products but overall in the fields of healthcare and
worn
but
will
become
medical monitoring. It will not be here tomorrow, but it is coming.”
increasingly
important
and
play
 “Estimating market potential and size in part depends on what definition
you use for wearable technology. Are you just talking about fashion and
a bigger role in our lives, not
fitness or does the market include shoes, garments, clothing and devices
just as commercial fashion
for the military and devices and healthcare products. Obviously the fastestproducts but overall in the
growing area is fitness. Fitness is leading growth in field now. Fashion is very
fields of healthcare and
big. Enterprise has seen growth but that is a different game.”
medical monitoring. It will not
 “We also will see wearable technology and smart clothing. There are already
fabrics with embedded sensors and smart garments that have the ability to
be here tomorrow, but it is
measure vital signs and then transmit the information to other devices.”
coming.
 “The pace of growth will be influenced by security and privacy. If anything
Principal at Stratemerge & Active in
happens in the next 12 months, it could influence the growth rate and even
Initiatives on Wearables
affect what direction the market takes. All of these elements play a big role
in determining how quickly the market develops. There also are questions
about who will control the information. That is where the consumer will weigh in. The insurance companies are very
keen on this stuff in the areas of medical and health. I would urge them to be keen on it, not just so that they can get
you to buy or take more drugs.”
 “People do discard devices after a few months. I don’t know if they are not lasting long enough or whether people
break or lose the devices. It is possible they may change from one device to another, because newer features are
more appealing.”
30
Wearable Technology
“A more meaningful question is, how do the devices make a difference in our lives? Do they add or improve our
experiences? Continuing use a device may also depend on how well the increasingly available apps integrate. It
doesn’t matter how pretty the device is. It is more about how they are designed and connect. Mostly it’s about
experience, and that often depends on whether the application adds to our lifestyle. When I talk about applications, I
also mean how simply devices interact, how simple it is to use and how seamlessly it integrates with your phone. Is it
integrating easily or does the device give you more stuff to do?”
 “I cannot identify leading startups or large company players because I am a consulting adviser for many of them and
I do not want to advance one company over the other. We also have to wait to see what happens when Apple comes
out with its Apple Watch.”
 “Everyone in the supply chain will play a part in the development of wearable technology. There are many layers any
we may see new levels of supplier input as the market involves. The most significant companies will be developers of
embedded technologies. Companies that work on security are very important. Companies that enable the control of
privacy and identity are essential to the growth of this market. Companies that work on connectivity also will
contribute.”
Miscellaneous
 “It will be a whole, new world in five years. Right now those who use wearable technology are early adopters. How
long will it take before no one would think of leaving home without a wearable device? How long did it take to adopt
the smartphone?”
 “I coined the phrase ‘Allternet.’ In the Allternet age, everything will have an IP address and will be part of the digital
grid, making the Allternet as fundamental as the atmosphere around us. The Allternet will add a digital dimension to
our lives within which our own senses, emotions and spirituality are expressed and mobilized. Today people are
already expressing their sentiment, intent and aspiration as well as capturing their life logs and executing
transactions online. As more and more of this data is stored and mined, profoundly powerful knowledge and insights
can be harnessed to an extent never before conceivable.”

6. Veteran computer scientist and technology consultant with expertise in pervasive computing and mobile devices
Wearable technology has been in development and used for decades, yet the products coming to market demonstrate
few significant advances. Most commercial devices lack wearability or aesthetic appeal that would be compatible with
everyday consumer lifestyles. Some medical, health and fitness devices hold value and could evolve into a $3 billion
market by 2018 if manufacturers and developers can improve on design. The source expressed concern over privacy and
how collected data would be used and secured. The smartclothing and smarttextile segments could grow into a viable
industry in five years.
 “I’m pretty skeptical about the hype. None of what I’ve seen lately is particularly new or improved upon. And I think
the agenda of mega-corporations turning us all into their personal data feeds is to be viewed with extreme caution.”
 “Some devices have been useful and functional, especially in the area
exercise, because the devices add value. Growth would depend on how the
clash between privacy and technology evolves.”
I’m pretty skeptical about the
 “If you are spitting data into the cloud, will you know how your information is
hype. None of what I’ve seen
being used or who has access to it? Look at Apple and Google with the NSA
lately is particularly new or
activity. With wearable technology, it’s not just about whom you are calling;
now the information is more intimate. It’s about your heart rate and
improved upon. And I think the
breathing and personal habits. For most companies, the value is in the data.
agenda of mega-corporations
It’s not just about selling hardware and software. It’s possible that you’ll
turning us all into their
have sensors on your phone, and then companies will only have access to
personal data feeds is to be
raw data. But that is not where the commercial activities have gone in the
viewed with extreme caution.
past.”
 “Fifteen years ago when I worked in the labs in Palo Alto, all of us were
Veteran Computer Scientist &
wearing smartwatches and personal digital systems. People were building
Technology Consultant
the things that you see coming onto the market now. The technologies been
31
Wearable Technology
around for a while, but I don’t think there have been many advances in how these things fit with people and their
lifestyles. Google Glass is the perfect paradigm.”
 “There is room for a lot of creativity. There have been advances in the field of reactive textiles and fabrics that use
embedded sensors. If companies can get the aesthetic right and get the devices to fit into the consumer’s lifestyle,
the smart clothing angle might work. A lot of people are working on smart textiles, but mostly we still see the
garments at high-end fashion shows.”
 “I would imagine some materials might become mainstream in the next five years, that is if they can keep the cost of
the fabric down. More recent advances have been seen with interactive jewelry, using it as an input device or to
activate movement. But technology companies are really bad on the creative side and at making things that are
actually useful to people.”
 “I really can’t answer questions about potential size of the market. It’s possible that the medical and health sectors
would become viable markets that could top $3 billion by 2018.”
 “People toss devices because the aesthetic does not fit with their lifestyle. Only a certain type of person wants to
know their calorie intake or the number of steps they’ve walked. It’s not surprising that people stop using devices.”
 “The aesthetic for some devices is all wrong. Devices that go on the wrist and Google Glass, for example, make you
look nerdy. It’s hard to make consumers embrace a lifestyle that is not really their own. We brought in Google Glass
here at work, just to give it a try and test run. It got a really negative reaction.”
 “The Oculus wristband still makes people nauseous … due to the lag time between moving your head and visually
looking at your wrist. It confuses the brain. People may find a use for it in the home, but it enables a very isolating
experience and the device is clunky.”
Miscellaneous
 “Looking at the aesthetic and lifestyle aspect, I can imagine a market for technology that enables a lifestyle
experience and the devices could be throwaways. But then the market would become a platform industry and the
thing that you wear would be disposable. This would be an area for somebody like Disney. I could see developing a
wearable asset that goes along with an experience or real-life gaming. … The wearable is not the thing; the wearable
simply would enables the experience.”
3) Wearable Tech Retailers
Three sources representing national sporting goods retailers and six representing national tech retailers expect sales of
wearable devices to grow further. Sources’ growth estimates ranged from 10% to 100%, mostly based on demand for
fitness/health, smartwatches and fashion. Fitbit, Nike and Samsung are the current sales leaders, but Apple is expected to
dominate once it releases its much anticipated smartwatch. The wearable technology market is fragmented, with sources
mentioning 15 companies that have a stake in the space. Players that may be challenged as competitors’ technology
improves include Garmin, Pebble, Martian Watches, Polar Electro, LG, Motorola Solutions and JBL (Harman International
Industries/HAR). Market headwinds include limited consumer awareness, the need for more functionality in the bands and
watches, a lack of integration between devices, and the lack of a must-have device.
KEY SILO FINDINGS
- All 9 sources expect the wearable technology market to continue its expansion.
- Growth projections ranged from 10% to 100% year to year.
- Health and fitness applications and devices are driving growth.
- Current market leaders include Fitbit, Nike and Samsung.
- Excitement for the release of the Apple Watch is high, and Apple is expected to dominate the market when the
smartwatch is release in early 2015.
- Companies that will face greater competition as wearable technology improves are Garmin, Pebble, Martian, Polar,
LG, Motorola and JLB.
Miscellaneous
32
Wearable Technology
-
The lack of consumer awareness, limited device functionality, and a lack of must-have devices and meaningful
applications will slow adoption.
1 source said employers are encouraging their staff to purchase and use health/fitness bands.
1. Apple store assistant manager in the Midwest
Sales of wearable technology for fitness purposes have been increasing at this busy Apple store in an upscale shopping
district, with Jawbone leading the way.
 “Our sales have been growing, but I don’t know percentages over the past
quarter or year or anything like that. “
 “We have had these in the store since they first came out.”
 “The best sellers have been the Jawbone Up wristbands. Second best are
the Nike FuelBands, and the third best would be the Fitbits.”
 N/A
The best sellers have been the
Jawbone
Up
wristbands.
Second best are the Nike
FuelBands, and the third best
would be the Fitbits.
Apple Store Assistant Manager
Reporter Observations: The wearable technology devices were near the rear of
Midwest
this Apple store. We noted four shelves of Nike FuelBands, two shelves of
Jawbone UP 24 wristbands and one shelf of Fitbits, including five bands and two
snap-on bits. One shelf held the Mio Global heart rate monitor bands, and another, the Wahoo monitor bands. No wall
ads promoted the wearables or the Apple Watch, but the Fitbit was touted in a small brochure of tech items aimed at
college-bound students. The store was bustling with about 30 customers, but in a 20-minute period only one person—a
middle-aged man—looked at the wearable devices.
2. Dick’s Sporting Goods assistant manager, Kansas
Sales of wearable tech devices for fitness have been steady and are expected to be strong for several years as employers
encourage their staff to become more health-conscious. Apple, Garmin and Fitbit are expected to lead the way.
 “These devices have become very popular. Sales have been steady, and I would estimate they are up 25% to 30%
from a year ago and almost that much in the past three and six months. A lot of the increase is due to the addition of
some products. We did not have the Garmin Vivofit bands until about four months ago, for instance. They have sold
well, and so have the Fitbits.”
 “I would estimate sales to grow by 50% in the next year, even more. It’s
harder to break it down by quarter, but the growth should be steady. Fitness
devices really sell well over the holidays as presents.”
These devices have become
 “Fitness has the biggest future in wearable technology. This country has a
very popular. Sales have been
big issue with weight, and people are going after that. We have employers
steady, and I would estimate
getting involved, urging employees to buy these devices. You can get breaks
they are up 25% to 30% from a
on health insurance rates when you monitor your condition with this
technology.”
year ago and almost that much
 “Large-scale adoption is really starting right now and could build for several
in the past three and six
years before topping out.”
months. A lot of the increase is
 “You would hope that people don’t get tired of these devices and stop using
due to the addition of some
them, but I can see that happening. I can see where some people might
products.
give up on using fitness monitors just like they stop going to the gym.”
Dick’s Sporting Goods Assistant
 “In the long run, Fitbit, Apple and Garmin will probably the biggest winners
Manager, Kansas
in this field. They have created niches over time. Word-of-mouth
33
Wearable Technology


testimonials are also big for them. Garmin’s Vivofit is specific to runners and has a great interface.”
“I am not sure who will be the losers long term. It is going to be a competitive market.”
“We also sell wearable technology over in the golf department—wrist devices that keep a lot of data—but they have
not sold well. They are seen as pretty expensive by golfers.”
3. Best Buy assistant manager, Kansas
Smartwatch sales have increased steadily and are up 100% from a year ago when this store did not have many of the
devices. Samsung and Apple eventually will dominate the market.
 “I sell the smartwatches, and they have really grown in popularity. Sales are up about 20% over the past three
months, more over the past six months and 100% in the past year. We had very few of these products a year ago, so
the growth has been explosive. I don’t work in the department that sells the fitness wearable technology, but I
understand our sales there are up too, though not as much as for
smartwatches.”
 “The future is going to see more growth. Sales could double in the next year.
It may be hard for brands such
These are being marketed more, and they are looking better.”
as Pebble and Martian to
 “The large-scale movement toward this technology is hard to predict, but I
would say it has started now and will keep growing strong for the next two
compete with the bigger
years.”
players in the future. Pebble
 “Fashion will take a big role in the direction of wearable tech.”
doesn’t have the health
 “As far as I can tell, these devices are not being tossed out by people out of
monitoring features for the
boredom or whatever.”
fitness market. The round face
 “In the long run, it’s going to be Samsung and Apple who will be the leaders.
on the Martian with text down
They’ve got the money to put into it.”
at the bottom is not the best
 “It may be hard for brands such as Pebble and Martian to compete with the
design.
bigger players in the future. Pebble doesn’t have the health monitoring
features for the fitness market. The round face on the Martian with text
Best Buy Assistant Manager, Kansas
down at the bottom is not the best design.”
4. Dick’s Sporting Goods assistant manager, Southern California
Sales for the health/fitness wearables have remained flat during the last six months after a short rush for the Nike
FuelBand when it was delivered to the store in early summer. The activity trackers now are more of a fad. To gain critical
mass, more applications and simplified connectivity to cell phones are needed. Nike is in a good position to be a winner,
but Apple likely will take over the segment.
 “The Fitbit was absolutely a hot seller last Christmas. It was the best seller until we got the Nike FuelBand. We had a
mad rush for the Nike watch in summer, and then it all kind of just slowed down.
 “Garmin watches do pretty well, but since Christmas and summer with Nike, sales for these are really going pretty
flat. It think what’s going on is that people buy them and then realize that they can only do so much. Then they have
to go back to their computer and analyze what they have done, and that’s it. This is why I think so many are putting
them in a drawer and forgetting about them.”
 “I think of these things right now as more of a fad rather than a necessity. We have so much back stock on these
right now. I can’t see it picking up again until Christmas—and they’ll only do well if they come out with something
new.”
 “Customers like the idea of seeing their workouts or their heart rates, but if they have to go home and plug into
another device to read that data, they probably get a little overwhelmed with the process.”
34
Wearable Technology
“Fitness and healthcare are probably the areas that really have the ability to make the most of these kinds of
devices, but people want more applications and a closer connection right to their phones. I can see how these might
ultimately replace the phone when folks are working out or at work.”
 “Nike and Fitbit are kind of going head-to-head right now, but that’s probably
Nike and Fitbit are kind of
going to change if Apple comes out with their smartwatch. Garmin does very
going head-to-head right now,
well with hikers because of the GPS system.”
 “People really like the Nike product because it lets you customize your
but that’s probably going to
workout and preset data.”
change if Apple comes out with
 “I don’t think Fitbit is going to be as popular going forward. I can see Nike
their smartwatch.
dominating the fitness market, and possibly Apple for the smartwatch
competition to Samsung.”
Dick’s Sporting Goods Assistant
Manager, Southern California
 “The Polar heart monitors are great and very popular with seniors, but you
need to buy the band to go with them in order to use them. It’s possible that
they may lose some business going forward as more products have everything in one device.”

Reporter Observations: We noted no activity in the section, which was at the store’s entrance. Several of the fitness
monitors were on sale, in particular the Nike FuelBand, which was $99, a $50 discount.
5. Best Buy sales associate, Southern California
Sales for Samsung smartwatches are relatively healthy and may increase by as much as 10% to 20% during the coming
weeks as the company releases the Gear S, which has advanced phone functionality. Apple is expected to go head-tohead with Samsung once it releases its own smartwatch. Fitness trackers such as Fitbit and Pebble are doing well, but
are not as hot as they were a year ago.
 “The Samsung watches are doing relative well but have slowed since last spring. There is a mentality out there that if
you need to have your cell phone around to get the benefit of the
smartwatches, then it’s too many extra steps.”
 “Fitbit is doing well, but so is Pebble. These are more activity trackers and
If Apple comes to the market
tend to be purchased more as gifts rather than must-haves for daily use.”
with its own watch, look out
 “Medical facilities, surgeons and people who work in healthcare research
are likely going to get a lot of use out of the wearables going forward
Samsung. You can’t deny the
because of their need for hands-free data collection and communication.”
power of the brand there.
 “The smartwatch sector is not going to go away; it’s going to likely get
better, more refined. With Samsung’s new watch and another from LG out
Best Buy Sales Associate, Southern
California
today, we expect to get demand for those and will see more and more
customers looking at them more seriously than they have.”
 “Google Glass is going to remain very popular with the medical sector, but how useful that will be for everyday
consumers is yet to be determined. It could be too much technology for us right now.”
 “If Apple comes to the market with its own watch, look out Samsung. You can’t deny the power of the brand there.”
 “Samsung will remain very strong for the Android market, but right now its products are only compatible with the
Samsung line. That might have to change if they want to really compete.”
Reporter Observations: The Samsung section was busy, but no one was seriously considering the smartwatches. No
activity was taking place in the Pebble and Fitbit section, and several activity monitoring products were on sale.
35
Wearable Technology
6. RadioShack sales associate, Southern California
Sales have been strong for the last six months for Fitbit but have been nonexistent for Garmin’s smartwatches and other
heart monitor wearables. Nike, with its popular FuelBand technology and customizable features, may lead the way in
partnering with Samsung or LG, but Apple likely will overshadow those partnerships with its “iWear” products, should they
come to market.
 “We sell quite a few of the Fitbits. People seem to really like them and know
them by the name. They come in knowing what they’re looking for and why.”
 “Sales are probably about the same though over the last six months. It’s not
our largest selling product. Garmin watches are not doing well here in this
store. We usually only have one or two on the shelves.”
 “Fitness tracking is popular. I don’t see it as a fad. But just like the big
numbers of people who vow every January to get a gym membership and
start working out, many people get the Fitbit and other devices and simply
stop using them.
 “Six months out, we might see more applications for the smartwatches with
real cell phone use options, but in general I think the health and fitness
sectors will be the strongest areas of growth. The technology for the
smartwatches seems to be loaded with gaps between what people think
they need and what they will actually use.”
 “Nike and Fitbit will top the activity tracker markets. I suppose Apple would
lead the market for smartwatches, but it could see itself as a partner with
Nike in that market.”
 “I don’t think the older-model fitness trackers like Pebble will be able to
hang in there. I can see them disappearing as Nike and Fitbit continue to
expand their technology.”
 “Garmin’s got the GPS market pretty much down. They could see a
partnership with Apple and/or LG or Samsung.”
We sell quite a few of the
Fitbits. People seem to really
like them and know them by
the name. They come in
knowing what they’re looking
for and why.
Fitness tracking is popular. I
don’t see it as a fad. But just
like the big numbers of people
who vow every January to get a
gym membership and start
working out, many people get
the Fitbit and other devices and
simply stop using them.
RadioShack Sales Associate
Southern California
Reporter Observations: The section devoted to fitness wearables was very small, with Fitbit dominating the rack. Only two
Garmin watches (the same style) were for sale. We did not witness any wearable device purchases during our visit.
7. RadioShack assistant manager, Kansas
Sales of fitness-related wearable tech devices, mostly wristbands, are up year to year and quarter to quarter. Further
growth is predicted for next year as people become more health-conscious and
products become more fashionable.
 “Our sales of this technology are definitely growing. I’d say they are up 20%
in the past three months, 30% in past six months and 60% in the past year.
Summer saw a lot of sales. People wanted to get fit and look good for the
season.”
 “Sales should keep increasing, especially as we get closer to the holidays
when people buy them as gifts or make New Year’s resolutions to lose
weight. I would predict a 20% growth for the next quarter, 10% to 15% over
the next six months and 40% in the next year.”
 “I really think the large-scale movement of these products will come within
one or two years. People are hearing so much more about this technology,
I really think the large-scale
movement of these products
will come within one or two
years. People are hearing so
much
more
about
this
technology, and you are going
to see Apple and companies
like that enter the market more
assertively.
RadioShack Assistant Manager
Kansas
36
Wearable Technology
and you are going to see Apple and companies like that enter the market more assertively.”
“The growth will be in fitness and fashion, I believe. There are so many things these devices can do to keep you in
good health that people are becoming aware of. But they also want them to look good. You can see already that they
are making bands that look more like watches and bands where you can change out the colors. The color and style
offerings appeal especially to women.”
 “I have not heard that people tire of these devices and toss them aside after six months. They are usually serious
fitness people. They may upgrade, but they don’t just get rid of them.”
 “Plantronics and Fitbit will probably be winners in the future. They offer a lot, and they have great brand recognition.
Apple is going to keep getting bigger in this area too.”
 “I don’t think Motorola can keep up or gain any market share. JBL is another one that seems likely to slip.”
 “Down the road, Apple should be the biggest in sales growth. Their Apple Watch should be a big seller.”

8. Full-time mobile phone associate for Best Buy, Georgia
Sales have risen for wearables, and more people are asking about them than a year ago. The source expects sales to
continue upward, particularly as the devices become capable of integrating with cell phones. Fashion and fitness will lead
the adoption of wearables. However, large-scale adoption will take at least one to two years. Customers buying Fitbits do
so for training purposes and continue to wear them on a daily basis. The top leaders in wearable tech are Fitbit, Misfit’s
Shine and Nike. Razer Inc. will see a lot of growth once its Nabu wearable hits the market.
 “Sales for wearable technology has increased, but I can’t speak to how much. I’ve had people ask more about
wearables than I did last year.”
 “Sales will go up because the devices are becoming integrated with your phone. Fitbit, Nike+ and Shine are very
popular.”
 “The estimate of $50 billion is a high expectation. Large-scale adoption will
take at least one to two years, if that.”
Sales for wearable technology
 “Leading the wearable adoption will be fashion and fitness. Gaming won’t
be because they have been done, and the market has been crushed by
has increased. I’ve had people
Apple and Nike.”
ask more about wearables than
 “I’m sure there are some that stop using the devices. However, if someone
I did last year. … Sales will go
is into fitness and starts wearing a Fitbit, Nike+ or Razer, it becomes a part
up because the devices are
of their everyday routine. Customers put it on like they would their clothes or
becoming integrated with your
a watch.”
phone. Fitbit, Nike+ and Shine
 “The top three will be Fitbit; Misfit, which makes Shine; and Nike.”
are very popular.
 “LG will definitely be the loser. Their system integrates only with iPhones
Full-time Mobile Phone Associate
and certain Androids.”
Best Buy, Georgia
 “Razer is just coming out with wearables, but they will see exponential
growth because they are already in the game business. Gamers will be able
to receive personal messages about games they are playing, who is playing, and their own Razer account.”
 “Fitbit will win the supplier side they have everything in one place; we always have a good inventory in the store. Nike
would be the loser as we don’t have enough inventory in the store. Also, Garmin has one, but not a lot of people ask
about it.”
Miscellaneous
 “Most are trying to expand their network and capabilities as far as keeping it all in one place. Fitbit tries to keep safe
on minimal level, whereas Samsung wants to be integrated with their phones.”
 “Razer [will win]; otherwise it will be Fitbit because they have been phenomenal with most of their stuff and their
customer service is outstanding from what I hear. Razer, because they have the technology and the growth to do it.”
37
Wearable Technology
9. Sports Authority sales associate, Georgia
Sales for wearable tech have remained steady during the past year. The source looks for sales to increase during the
holiday season and said the industry is on track with growth predictions. He expects widespread adoption to be within the
next one to two years. The health and fitness markets will lead the adoption. Nike is the overall winner in wearable tech,
but each player will see sales growth. The future is communication, with Samsung being the frontrunner.
 “Sales for wearable technology have remained the same compared to the past three to 12 months.”
 “Sales will go up at the holidays. The hottest selling device right now is the Nike FuelBand.”
 “The industry is on track to hit $50 billion by 2018. Large-scale adoption will take place in one to two years.”
 “Health and fitness markets will lead in adoption because they already lead.”
 “I can’t respond to wearable users tossing their device.”
 “Nike will be the winner overall in company and device.”
 “I think across the board everyone will see sales growth a little here, a little there.”
 “The retailers will be the winners on the supply side.”
Miscellaneous
 “The future of wearable tech will be in the communication field, and Samsung is going to be the leader because they
are currently.”
4) Wearable Tech Users and Online Consumer Survey
Seven Fitbit, two Pebble, one Basis (Intel) and one Jawbone user made up these 11 sources. Blueshift also provided data
from an online August survey of 1,029 consumers. Ten of 11 wearable tech users expect the market to achieve widespread
adoption in three to 10 years. Two sources quantified growth: One expects sales to be $15 billion to $25 billion in four years
while the other expects 12% to 15% growth in 2015 and double that in two years. Fitness and health-related apps and
devices are expected to drive sales. In the next three months, 34.7% of the 1,029 survey respondents said they were likely to
buy a wearable device. Excitement for Apple’s entrance into the wearable industry is high; sources expect the company to be
the industry leader. Likewise, survey respondents believe Apple’s entry into the wearables industry will hasten and promote
adoption. Samsung and Fitbit also are expected to perform well. Companies making sensor components and working to
reduce battery usage will come out ahead as well. The wearable industry is highly fragmented; sources discussed 14 different
companies in the market. Those that may face challenges include smaller firms currently leading the wearable sector such as
Pebble, Jawbone and Misfit, as well as large companies like Microsoft, Sony, Nike and HTC. Headwinds for widescale
adoption are the lack of a must-have app or device, the lack of sophisticated integration between wearables and
smartphones, unfashionable designs, poor battery life, and difficulty in setting up and consistently using the device.
KEY SILO FINDINGS
- 10 of 11 wearable fitness device users expect large-scale adoption of wearables in 3 to 10 years.
- Health, fitness and smartwatches are expected to drive sales.
- Apple is expected to become a wearable market leader and to hasten adoption when it launches its Apple Watch.
- Samsung and Fitbit will remain market leaders.
- The competitive market will challenge smaller companies that currently are doing well, including Pebble, Misfit and
Jawbone. Larger companies also will be pressured in this space, including Nike, Sony, Microsoft and HTC.
Miscellaneous
- Headwinds to adoption include a lack of a must-have device or app, a limited number of apps available for fitness
bands and watches, a lack of sophisticated integration between wearables and smartphones, unfashionable
designs, poor battery life and difficulty is setting up and consistently using the device.
38
Wearable Technology
1. 20- to 25-year-old experienced wearable device user in New York City
The source had been a wearable device user for several years, but discontinued usage during a period of travel. He plans
to purchase a new wearable for fitness. He cited several barriers to changing consumers’ behavior and integrating more
seamlessly into their lives.
 “Before I was traveling, I did a lot of wearable stuff when I was in New York—mostly on Fitbit and Basis. I was mostly
kind of underwhelmed. It was useful, but it was difficult to keep up. I used it probably for about two years or so.”
 “I’m not using any wearable tech except for Moves, the app. Moves is more like a journal for me. I’m not using it for
goal setting, mostly for records. It uses the GPS and pedometer on the iPhone to interpret where you were during the
day. It’s a pretty lightweight way to track data. The benefit is it doesn’t use any wearable except your phone, which is
always on you.”
 “I’m definitely in the market for a wearable right now. Just last night I was looking at comparisons for the biggest
wearable tech out there. The ones I was looking at were Fitbit and Garmin. What I’m really holding out for is whether
Apple is going to put out something that’s really, really good. It’s dubious whether it’s actually going to release an
Apple Watch or not. People aren’t so sure. There’ve been some reports that it’s being pushed back.”
 “For the next three months, we’ll see more apps that are appealing for people. It’ll just become something that more
people do. It’s not going to move that far, but it’s going to be more accepted for people to use wearable devices.”
 “In the next year or so, we’re going to see a lot more heart rate monitors. There’s also the Basis that came out last
year with the monitor. You’ll see devices like that that are more accurate. The Basis B1 accuracy is actually pretty
low. It’s kind of coarse in terms of the time resolution. Maybe Apple will have better resolution or accuracy on the
actual heart rate data. Combining it with other goal-setting paradigms may build things that are actually kind of
motivating. You can get more sensors and more information coming in and better ways to interpret that information
and help people get more exercise or fitness into their day.”
 “I see Google Glass as having arrived five years too early. Gartner is a
research company that puts out a thing called the Technology Hype Cycle.
I’m definitely in the market for
The Hype Cycle looks at how technology is adopted and trends. Five years
a wearable right now. What I’m
ago it was virtual reality. Google is at the top of the Hype Cycle right now. It’ll
take two or three years before it becomes more successful. It is where
really holding out for is whether
technology is going, but right now it’s not that useful for what it is.”
Apple is going to put out
 “I think the wearable market size is approaching $1 billion at the moment.
something that’s really, really
It’s going to be at the lower end of the $3 billion to $50 billion range—maybe
good. It’s dubious whether it’s
$15 billion in four years. There are a lot of barriers.”
actually going to release an
 “A huge barrier to wearables is change of behavior. For fitness, it’s changing
behavior so people actually exercise more. Most of the wearable tech we’re
Apple Watch.
wearing fitness-wise is really just good at recording. When I wore my Fitbit, it
Experienced Wearable Device User
challenged me for a little bit, but the company hasn’t really figured out the
New York City
hook into your life point yet, and it needs to do that so it actually becomes
viable. Other, more ostentatious wearable tech like Google Glass is starting
out pretty badly. There’s a negative reception of Google Glass now. I’m sure it’ll change. Other things such as the
Narrative [Clip] camera is a great life plug-in device. Still, social norms still need to change. People will still ask you
about something like the Narrative and if you say it’s a camera, they’ll kind of get weirded out.”
 “Fitness is a leader. Fitness is key because there’s no social norms that need to be changed. It’s something you wear
for yourself. There’s no stigma against it. It shows real value in people’s lives. It’s the leader right now.”
 “I don’t know what No. 2 will be. I don’t know that much wearable tech outside of fitness. The only things I can think
of are Google Glass and Narrative.”
 “I bet you 80% of wearable devices are in a drawer somewhere. I know two of mine are. That’s a real issue. There’s a
cost to buying the product and a cost to using the product. The cost to using the product is just the actual behaviors
you have to incorporate, like making sure it’s charged all the time, making sure your phone is on to sync the data at
least once a day. You have to do work.”
 “The Basis band was awful because the actual device is cool, but it required you to connect to a computer by USB
once a day. Now you have Garmin Vivofit, which runs on a battery for a year, and it charges via Bluetooth.”
39
Wearable Technology
“It’s hard to tell what benefit fitness wearables are giving to people. For certain users, they’ll really find it motivating
to see how hard they’ve worked during the day. … For some people, they’ll see that they haven’t been exercising and
won’t be motivated. It’s how these uses of tech can actually influence your behavior and show value and benefit to
your life that outweigh the cost. I think for a lot of people it isn’t quite there yet.”
 “Fitbit for sure is a winner. It was pretty close to first mover in the field. The
technology’s solid. For fitness wearables, it’s either going to be the top or
If there’s anyone that’s able to
definitely very near it.”
 “If you do believe the reports that Apple is going to come out with a
do wearables really well, it’ll be
wearable device or watch, I think it’s definitely going to be a leader in that. I
Apple. If it comes out with a
don’t see an Android watch being a leader. All the products that are out are
device, I’d revise my four-year
not compelling. If there’s anyone that’s able to do wearables really well, it’ll
projection from $10 to $15
be Apple. If it comes out with a device, I’d revise my four-year projection
billion to $20 to $25 billion.
from $10 to $15 billion to $20 to $25 billion.”
 “Google will quite possibly be a loser for the next few years. It’s too early to
Experienced Wearable Device User
tell for the other fitness-gear wearable tech companies. Nike is showing to
New York City
be a little bit slow, even though it’s got really good software behind it. I
would even be hesitant to say that Jawbone will be a loser.”
 “Wearable tech will absolutely boost Apple’s sales. I don’t think it’ll be as big as the iPhone, but it may be at least
half as a big. Wearable tech is huge. I think Apple knows how to come out with a good product that people would like
to use. I don’t see that changing.”
 “Part of me could see Samsung having some growth in wearable tech if it builds something wearable that’s
compelling. It could see substantial growth. The Gear watches I’ve seen aren’t really that compelling.”
 “Definitely whoever is producing the altimeter and the accelerometer will benefit. You’ll see suppliers benefit for
anything that requires new technology.”
 “If you see these wearables going more into health, companies that that provide components for heart rate
screening and sensors for perspiration will benefit as well.”
Miscellaneous
 “You have to think about what the real benefit is of these wearable tech devices. It is to record data? Or is it
something more? Is it going to actually influence our behavior? The issue is how we get the data and convert it from
raw data into insights, and how we can use that data to change behavior. A lot of the wearable tech is mostly
pedometers. They haven’t really been able to synthesize it to one that integrates better into your life.”
 “I could see the space for a wearable tech product that integrates into your calendar and knows where you’ll be
going. It can tell you when you need to do more exercise and schedule it in.”
 “You’ll find that things will become more accepted as people start using them and see they’re kind of cool. They
definitely change in different speeds in different areas. It will change organically as they show more value.”

2. Wearable device user in the San Francisco Bay Area
The source uses a wearable device largely for fitness purposes. He believes that sleep tracking and heart rate monitoring
are important features in wearables. Additionally, wearable apps in education and for pet owners could lead to larger
market growth. Google and Apple will lead the future of wearable technology.
 “My only use of wearable tech is a Basis 1 watch. I use it as a fitness product. It’s a simple daily movement tracker
for seeing how many steps I’ve taken. I’ve used it to track heart rate and sleeping throughout the day. I got it as a
calorie counter, but it’s evolved to be a little more advanced.”
 “I bought the Basis for myself as a Christmas present last December. Basis has a little bit more depth to it. I would
have probably cast aside a simple step tracker after three months. Now, I have a heart rate monitor and a sleep
tracker on my wrist. I have more than most people. So I think if you’ve got that data and broader sensors, the more
things that it’s monitoring on me, probably the longer I’m going to keep that device.”
 “I watch Kickstarter, so I found out about Basis through that. I’m watching a lot of products. They’re diversifying. The
products were the sort of thing where people didn’t think they were necessary at first.”
40
Wearable Technology
“In the next year or two, we’ll see things we never knew we needed but need once we have them. Maybe one might
be just a general movement thing. They say that sitting is the new smoking. Wearable tech will remind you to get up
and move.”
 “I would not hesitate to believe the estimates of $3 billion or even $10 billion for market potential by 2018. Fiftybillion dollars is a lot of devices. To reach $50 billion, we need to see a great app or really strong market penetration.
I would say in a year or two, some company is going to develop a strong app that will help the market potential.
Large-scale adoption might happen in the next three to five years.”
 “It’s going to be something health-related. If you told me there’s something
you could pair to education, I could see that happening too. I wouldn’t be
Apple and Google are both
surprised if parents are just as happy to buy a wearable along with a laptop
going to be companies the
for school. If there’s another smart company that does some wearable on
pets, pet owners would buy that. If that’s something that comes through
leads us to the future of
representing these areas in the next six months, I could see a $50 billion
wearable tech. It’s probably
market cap in a year.”
going to be a company that
gives us the ability to easily do
 “The big winner in wearable tech is probably not going to be one of the big
things we didn’t do before but
players; the bigger companies will be more successful in the second wave.
It’s going to be a small company that does something really innovative that
all of a sudden are high value
the bigger players really can’t achieve.”
to us—like if a company were to
 “I really wouldn’t bet against Apple against anything. I bet one of the big
come out with real-time blood
watch makers is going to partner with Samsung or one of the big tech
sugar tracking for diabetics.
companies and have some success there—just because they’re big enough
to move the whole market. They can put out enough devices in front of lots
How much would be too much
of people.”
to charge for that?
 “Nvidia is a graphics company. Three or five years ago, everyone was asking
Wearable Device User
how to get the energy use of processors down. Nvidia went backwards and
San Francisco Bay Area
said, ‘For zero energy, what can we get?’ and built up from there. They have
some pretty powerful hardware solutions for graphics. I think the companies
that build from zero energy upwards will be able to accomplish a lot on the supply side. There’s only so much energy
you can put. I have to charge my Basis every two days. If you could give me a battery that runs for 10 days, that
would be a major thing.”
Miscellaneous
 “Apple and Google are both going to be companies the leads us to the future of wearable tech. It’s probably going to
be a company that gives us the ability to easily do things we didn’t do before but all of a sudden are high value to
us—like if a company were to come out with real-time blood sugar tracking for diabetics. How much would be too
much to charge for that?”

3. Wearable device user and technology investor in New York City, 20 to 30 years old
This source is interested in wearables for fitness and health purposes, but believes that the fashion industry may become
a significant leader in the wearable market. Additionally, the source expressed interest in seeing what Apple releases on
the Sept. 9 iPhone event. Apple and Fitbit both have potential to be the winners in the wearable tech market. Still,
wearables must transition from being a “nice-to-have” to a “must-have.”
 “I’ve tried every device in that wristband category. I have Jawbone now. I like Jawbone the best because it sort of
equally focuses on fitness and also health. The Jawbone has a thing around sleep so you can look at what quality
your sleep was without using your phone. Some other sleep analytics things require you to use your phone. Sleep
quality was actually the most important and interesting to me because I don’t actually get great sleep all the time.”
 “The reason why I started using wearable devices was because we were seeing a lot more companies working on
stuff like that, from an investor perspective.”
 “I still find the devices kind of lacking. For one, Jawbone requires you to charge it relatively too often. It’s nice that it
sort of syncs up wirelessly, so I have the newest version that doesn’t require you to plug it in. The battery only lasts a
41
Wearable Technology














few days, and I often end up getting lazy and forgetting to charge it. Sometimes I’ve gone for weeks without
collecting any data and then kind of pick it back up again.”
“Everyone and their mother is waiting to see what Apple does. It’s possible that on Sept. 9, probably besides for the
iPhone 6, there’ll be their new wearable device. Apple always ends up causing a step change in either the software
or hardware. It’ll be really interesting to see what Apple’s take on the wearable form factor is and how that affects
usage. Everyone knows that Apple is probably the most creative about thinking about new form factors for things.”
“The potential for wearable stuff is going to be largely defined by whether or not Apple comes out with a device. If so,
is it a massive step change in the user experience that makes it more desirable for people. That’s kind of hard to
predict. If we assume that Apple doesn’t launch anything this year, then in terms of potential I would say I continue to
expect the same trends that always happen: the battery life increases, the devices get a little more sensitive. … Right
now wearables are basically bounded by battery capacity, sensor cost, size, weight, and availability.”
“The most interesting wearable that will ever come out is going to be one that give you more continuous information
about your health state. The limitation to that right now is sensor development. There are people out there
developing sensors that take little measures of your blood all the time, sensors that punch your nerves and see your
nervous signal.”
“There are probably going to be whole categories of fashion wearable
devices that do cool stuff visually. We’ve even met companies that have
The potential for wearable stuff
jewelry with electronics in it. That’s not something I necessarily care about,
is going to be largely defined by
but it’ll be a big category too.”
“The question of market segment and widescale adoption is a multifaceted
whether or not Apple comes
one. You could segment it into things that people wear because it’s
out with a device. If so, is it a
fashionable, things that people wear for tracking and utilitarian purposes,
massive step change in the
things that people wear because they’re sort of incentivized to. There are all
user experience that makes it
these different categories that will emerge that are still sort of nascent. The
more desirable for people.
vast majority of wearables are essentially trackers and smartwatches.
Those are ‘gee whiz’ type things at this sort. They haven’t found both their
Wearable Device User & Technology
killer form factor and application that really makes it different from the
Investor, New York City
phone. … All wearables right now are either dumb sensors that transit
information to your phone, or dumb screens.”
“You should expect in the next year or so that every major fashion company will start to get into the wearables of
some form. No one really knows because fashion trends involve people following other people. The other categories
of wearables—like health-related stuff—to some extent that’s a function of sensor development and better form
factors. These are all step changes.”
“Mainstream adoption is entirely a function of having more mainstream-friendly device form factors and better user
experiences like the process for charging the batteries. There are just several inputs into whether or not it ever
becomes a mainstream category that have no definition as of now. It’s entirely impossible to make a reasonable
guesstimate of this is going to be the adoption.”
“Do wearables become something that converges on ‘every person has a wearable’? If so, what are the things that
make it so that every person needs to have a wearable? What kind of wearable does every person end up having? Is
a wearable something that every person has more than one of?”
“Maybe as many subcategories get developed, people will have five wearables. These types of things are completely
undefined at this point but could mean that the market size is the number of people in the country.”
“The segment that has the most potential is fashion. … By definition, for something to be fashionable it’s not
something I wear the same thing every single day. You want to express your fashion personality by having many
things. I think that segment has the greatest potential for numbers of devices.”
“Which segment has the greatest potential for profit or revenue? Apple generates under 10% to 20% of any devices
in the category, but 60% to 80% of the profit. What will the highest value be attached to? I feel like the category is
still so undefined that I would never make a prediction by now.”
“It’s likely that it’ll be a watch or something like a watch that becomes big. A watch is something that’s on you all the
time and has a display that you look at frequently. I could very easily see that being a thing that everyone needs. I
could also very easily see it end up being relegated to a niche thing that only a few people really care about.”
“My use case is not reflective of normal people in that I use the devices to learn about them for work.”
“Jawbone is broadly recognized as the better device on the market right now. However, that doesn’t reflect any longterm loyalty that I have to Jawbone.”
42
Wearable Technology
 “Apple will be a winner. Outside of Apple, I would guess that Fitbit is going to do really well, simply because they
seem to be owning the coercion market. Companies are telling their employees to get a Fitbit because they’ll get a
cheaper rate on their insurance. Fitbit is dominating that conversation. I think they’ll do pretty well. My guess is that
one of the forward-thinking, fashionable trendsetting fashion companies ends up coming out with something really
cool.”
 “Just like every other new form factor that evolves, you’ll see a bunch of
general-purpose tech companies try to copycat it. Hardware companies like
Right now it’s very clearly a
HTC or Sony will start producing devices. Those always end up losing.
nice-to-have. It’s anyone’s
Samsung is a different company. I would say they’re probably in the best
position out of any traditional electronics companies.”
guess as to whether someone
 “There’s Pebble, a watch thing that is basically a repeater for your cell
actually comes up with a user
phone. That function is going to change when someone comes up with a
interface innovation, sensor
new reason to use a wearable and form factor.”
innovation, or form factor
 “My guess is that wearables will end up being another category of device for
innovation that makes it a
Apple. I think there’s an open question to whether wearables that Apple
produces cannibalizes existing sales to some extent.”
must-have.
 “Right now it’s very clearly a nice-to-have. It’s anyone’s guess as to whether
Wearable Device User & Technology
someone actually comes up with a user interface innovation, sensor
Investor, New York City
innovation, or form factor innovation that makes it a must-have.”
 “There are certain components that will always benefit. If you’re a screen
supplier or microprocessor supplier, at the end of the day it could really be a big growth supplier.”
Miscellaneous
 “Some of the most impactful devices will be around healthcare. That continues to be the piece that I’m most excited
about. The FDA needs to come up with a better regulatory path for these things. There’s a lot of stuff that needs to
happen aside from what’s already there.”
4. 28-year-old Los Angeles resident who owns a Pebble watch
This source would like to see better design and more third-party apps going forward, but likes the idea of receiving
notifications on the device at places where using a cell phone is not possible. He expects to purchase the Apple watch
when it comes out. The medical sector is the likeliest area for growth going forward.
 “I’ve been wearing a Pebble smartwatch for about two years, and I love it. I can access email and text notifications,
use it as a GPS. Also, I have it hooked up to my Sonos sound system in my house.”
 “I don’t think [widescale adoption of wearables is] going happen in three years. Maybe 10. I think more development
needs to take place, especially for smartwatches. If consumers consider them now, they are probably thinking about
the fact that the technology is going to be changing so fast, they are better
off waiting to see how things shake out.”
 “I can see a huge market for wearable technology for the medical industry
The winners with the watches
going forward. But I think the fitness market is still more of a trendy gray
will be the ones who can create
area. People aren’t likely to use the devices for fitness long term right now
more third-party relationships
because they are just extra gadgets. That’s probably why so many are
bought but not used for very long.”
to offer more applications.
Making them more useful is
 “I’m very excited about Apple’s forthcoming watch. I would think they’ll do
going to be key. Right now, the
very well, just like they do in other areas. Although, it could be a while before
watches
are
primarily
they come out with something that consumers think they just have to have.
notification transmitters.
The winners with the watches will be the ones who can create more thirdparty relationships to offer more applications. Making them more useful is
Pebble Watch Owner, Los Angeles, CA
going to be key. Right now, the watches are primarily notification
transmitters.”
43
Wearable Technology
“I also think that Pebble stands to gain something because they have been around for a while, and people know
them. Samsung might be popular too, but they need to figure out a way to make their products more universal.”
Miscellaneous
 “I can see the medical industry and the health and fitness sector serving more of a benefit overall. I don’t think
everyone gets the idea of wearing a smartwatch or a fitness monitor for everyday use, but surgeons and those in
high-tech industries probably do. They won’t be too likely to invest in the technology and then not use it, but the
watch wearer or the guy with the smart shirt might.”

5. 32-year-old Los Angeles resident who owns a Fitbit
This source is becoming bored with her Fitbit because of its limited features, and has gone from using it for running a few
times a week to using it for walking once or twice a month. She likely would not wear an Apple Watch or any other
smartwatch. Anything from Apple will do well, but in order for a real smartwatch to function effectively, it must incorporate
cell phone access.
 “I have a Fitbit and I like it, but it is pretty limited. I bought it initially for running and that worked really well for me for
about eight months. But I’m doing CrossFit now, and the gym where I go has its own app, which I downloaded to my
phone. It pretty much allows me to do everything I can do on a Fitbit, but also it allows me to set up customizable
workouts and target goals. It’s more than a heart monitor.”
 “My Fitbit is just sitting on a shelf at home now. I haven’t used it in several
months.”
Anything from Apple will do well
just by virtue of who they are,
 “Anything from Apple will do well just by virtue of who they are, but I don’t
but I don’t think the technology
think the technology is anything I would go out and buy. I just don’t see
is anything I would go out and
myself using a watch like a phone. It seems like too many layers of
technology to me. Nike’s FuelBand is pretty popular, and I can see Nike
buy. I just don’t see myself
coming out with better and better fitness monitors on the watch and apps
using a watch like a phone. It
for your other devices. But I am not sure how big of a demand there really is
seems like too many layers of
for all this technology right now on a watch. It’s just one more device people
technology to me.
would have to program, pay for, keep up with and I’m not really sure that it
has the power to reach critical mass like the cell phone has now.”
Fitbit Owner, Los Angeles, CA
Miscellaneous
 “No one really knows where the Google Glass and technology like it is going
to be sold or available, right? I would imagine that the big industries like healthcare are going to be able to afford it
and find meaningful, real-world applications for what they do. I can’t see consumers rushing out to buy the glasses
and walk around with them.”
6. Atlanta Fitbit user in her mid-50s
This source has worn a Fitbit for almost two years. Samsung has helped to increase the number of people wearing tech
devices, but she believes Apple will take over the market once it releases the Apple Watch. She also envisions people
wearing their cell phones in the future. Large-scale adoption of wearable tech will happen within the next 12 months or
as soon as the Apple Watch is launched. The fashion and health fields will lead adoption. She does not think people
throw away their devices but did say these devices are underutilized.
 “I currently wear a Fitbit and have been for almost two years.”
 “Over the next three, six and 12 months, the release of the Samsung model has expanded the number of people
wearing technology, but I believe once Apple releases its Apple Watch [the market] will really boom.”
 “I believe wearable technology will take over the cell phone industry. People will wear their phones.”
 “It will be all consumable but fitness/health will take the lead.”
44
Wearable Technology
 “I do not use my device as fully as I can.”
 “Pebble, loser; Samsung, Apple, winners.”
 “Samsung and Apple [will be leaders] as soon as they release a model that does health tracking and incorporates
phone features.”
Miscellaneous
 “Keep room for improvements; people like change.”
7. Fitbit user in her mid-30s, Cartersville, GA
This source has been using her Fitbit for six months and likes the ease of use. She expects widespread adoption of
wearable tech devices in three to five years, led by use for fitness. Fitbit and Apple will be the market winners while Nike
will be the loser because of its lack of Android integration.
 “I have had mine for six months and still use and enjoy the product.”
 “I use the Fitbit Flex, which I wear on my wrist. It counts my steps, mileage, etc.”
 “The Fitbit is an easy and great product. I definitely think there is a lot of potential for other companies to follow in
the lead.”
 “Three to five years is how long I estimate it will take for large-scale adoption.”
 “The fitness market will definitely lead the way for adoption.”
 “Fitbit and Apple will be the wearable winners.”
Miscellaneous
 “I think it is a growing market with a lot of competition.”
8. Fitbit user in her late-50s, Atlanta
This source uses her Fitbit to monitor her health and believes large-scale adoption of wearable tech is happening now.
However, manufacturers must address technology issues to maintain their growth. Although she uses her device, she
agrees with reports that users abandon their devices after six months. She does not like the hassle involved in using the
Fitbit. Market winners will be those with a strong brand following and those that can mass-produce the technology.
Startups and small enterprise will come out on bottom.
 “I use my Fitbit for health/fitness.”
 “The product availability and purchase will continue to grow exponentially as
manufacturers rush to claim market share.”
Large-scale
adoption
is
 “Large-scale adoption is happening now as consumer awareness grows.
happening now as consumer
However, it will only be sustained if the manufacturers address bugs and
awareness grows. However, it
issues with current technology.”
will only be sustained if the
 “Gaming and early adopters of technology followed by health/fitness
industry [will lead in the adoption].”
manufacturers address bugs
 “I agree with the reports that the devices are usually tossed aside. It’s not
and issues with current
convenient to remember to sync my device to my computer and having to
technology.
log in to enter information is time-consuming. It requires a great deal of daily
commitment. A few times my device ran out of power, and I didn’t get my
Fitbit User, Atlanta
results recorded.”
 “The wearable tech winners will be the ones with strong brand following, e.g., Nike, Apple.”
 “The losers will be startups and small enterprise unless they truly have state-of-the-art, cutting-edge technology that
no one else has but everyone wants.”
45
Wearable Technology

“The large corporations and companies who can inexpensively manufacture their products in large volume to meet
demand will be the winners.”
9. 19-year-old Pebble user, Kansas
This source appreciated the Pebble’s convenience and multiple uses, and now wants to buy a fitness-monitoring band.
He expects no letup in the popularity of wearable tech, and said Apple and Samsung will be the major players.
 “I have the Pebble smartwatch, which I bought in May. I use it for so many things—email, texting, looking at incoming
calls; it’s an alarm, a GPS. It gives me so much information, right on my wrist. It saves me from having to dig out my
phone all the time, which is especially handy and safe if I am driving. You can even unlock a car and control your TV
with it. Now I am shopping for a Fitbit or similar device to monitor my heart rate. … I also want something that tells
me how many calories I am burning.”
 “The potential for wearable technology in smartphones and for health and
other applications is very strong. The fitness craze will drive a lot of that. The
Samsung and Apple will be the
smartwatches are becoming a cool thing to have, especially since they can
long-term winners. They will
do so much but look like a watch. I got the one with the steel elastic band
instead of the rubber one.”
offer the
top-of-the
line
 “Fitness and the smartwatches will be the strongest markets in the years to
products and better materials.
come, but making these products look fashionable will be important in sales
Samsung’s problem now, as I
growth.”
understand,
is
their
smartwatches
are
only
 “Samsung and Apple will be the long-term winners. They will offer the top-ofthe line products and better materials. Samsung’s problem now, as I
compatible with the Samsung
understand, is their smartwatches are only compatible with the Samsung
phones.
phones.”
Pebble User, Kansas
 “One loser could be Misfit, the wearable health sensors. They have a lot of
competition. Same with the Pebble watch. I don’t know if it will be here very
long. You have to buy something else to do the heart rate and other fitness testing.”
10. 35-year-old Fitbit user from Kansas
This source likes the Fitbit because it makes him accountable, but will stop using it once the Apple Watch comes out. He
estimates a 15% to 25% growth rate in the wearable tech industry in the next year and 30% to 50% over the next two
years, followed by the start of a decline.
 “I have the Fitbit wristband. I use it to count my steps on the treadmill,
monitor sleep and calories burned through the day. I have had it for about
four months, but I am waiting for the Apple Watch to come out. It will do all
the things the Fitbit does but will also enable me to check texts and emails
and to download more information. Once I get that, I won’t use the Fitbit. I
bought this on Amazon. I don’t shop stores anymore.”
 “What I like about the Fitbit is that it provides accountability. I travel a lot,
and when I get back to the hotel I can see what calories I have burned and
what more I have to do that day to meet my goals.”
 “Sales of wearable technology will grow by 30% to 50% over the next two
years and about half that rate for next year.”
 “We are in the middle of the large-scale adoption of this technology. I say
that because I am a person who doesn’t buy at the start of a trend or at the
end but right in the middle. That means Fitbit must be about halfway into its
We are in the middle of the
large-scale adoption of this
technology. I say that because I
am a person who doesn’t buy
at the start of a trend or at the
end but right in the middle.
That means Fitbit must be
about halfway into its growth
phase.
Fitbit User, Kansas
46
Wearable Technology
growth phase.”
“The future is probably best for the fitness market. I personally don’t think fashion is important.”
“I don’t know if people will tire of these after six months. I wouldn’t. The only reason I will not use the Fitbit is
because I will be moving up to the Apple Watch.”
 “I suppose Apple will lead the way in these products, but we will have to wait to see what all they do in this field.
Jawbone seems like it is growing in popularity too. A lot of my friends have those. Whoever develops an Android
device to tie to those phones will also do well.”


11. Former wearable device user in New York City
The source is a former Fitbit user who experienced a rash while using the device once summer humidity set in.
Healthcare will lead in the wearable tech adoption because of its many practical uses. A partnership between a larger
company like Google or Apple and a new, revolutionary company would boost the wearable tech market. Manufacturers
should offer the means to measure biometric data such as heart rate, interpret relevant data in a way that encourages
regular learning, and make the devices essential to daily routines.
 “Fitbit for sure is a winner. It was pretty close to first mover in the field. The technology’s solid. For fitness wearables,
it’s either going to be at the top or definitely very near it.”
 “My experience with wearable tech has been relegated to the fitness world. The only device I’ve ever tried out was
the Fitbit Flex, which is the middle of the line out of its products. It’s just more of a sensor with some vibration
capabilities. I got it in last November and pretty much wore it consistently 24 hours a day through late June or early
July. I had my charger at work because it would drain during the work day. I would charge it every four or five days.
There were some slight inaccuracies because the battery would go out sometimes.”
 “My motivation for using it is that I’m an avid walker and was feeling like I
kind of plateaued and didn’t really know how much I was moving anymore.”
 “Fitbit attracts people who already have that fitness mindset or awareness.
Apple is a strong contender
Whether or not people are doing exactly what they want to be doing, they’re
based on their current hold in
at least somewhat conscious about wanting to improve.”
the market. There’s a lot of
 “I can see wearable technology gaining a lot of adoption in certain
anticipation around the Apple
industries, like engineers who work on oil rigs or people in the healthcare
world who are constantly having to take all these biometric information for
Watch. But, I could see
patients. … In terms of overall consumer behaviors and acquisition, it’ll
something entering the space
remain more in the exploratory world where devices will continue to
and creating a ripple.
improve. There will be some uptake, but it won’t revolutionize anything in
the next 12 months. Most wearables seem like smartphones that can
Former Wearable Device User
New York City
measure really simple things but can’t do much more than that.”
 “In terms of the $3 billion to $50 billion range, the cycles of innovation and
disruption are picking up. That’s been the research trend over the last 50 years. … Hearing that range speaks to the
fact that there’s just so much anticipation and people are waiting for that [next big] thing.”
 “We’re still operating in the landscape where there are monopolies that own a certain aesthetic or narrative. It would
be hard for a smaller player to gain massive widespread adoption because companies like Apple and Google already
have that brand awareness. People are more likely to wait for the Apple Watch than for the latest Samsung
wearable.”
 “It’ll be at least five years until we see really strong adoption. … Even with smartphones, from the moment it was
released, it wasn’t until 2010 or 2011 where you started to see a lot of people from various income levels and age
demographic groups really adopt the technology. Now everyone has an iPhone.”
 “Healthcare will lead in wearable tech adoption given that there is so much room for innovation in the healthcare
world.”
 “Reports of wearable users tossing their devices aside after six months just speaks to the overall simplicity and lack
of complete value that these devices are delivering. When I got my Fitbit, I consciously decided I didn’t want to just
buy and discard it; it is an expensive item. When I was trying to decide what to purchase, I researched and compared
47
Wearable Technology
the Nike FuelBand, Jawbone and Fitbit. Based off recommendations and ease of use, I picked the Fitbit. I was
looking to track my steps. When I was going through the setup process, Fitbit had a work flow process for you. As I
was going through I thought, ‘Oh cool, this can track my sleep.’ I realized that a lot of this comes down to the user
entering the data himself. I quickly tired of those minor functions that you can track. It became apparent to me just
what a simple device it was. As my routine stabilized, I got to a point where I knew how much I was walking and that I
was being more active. Then I hit the plateau where I was still wearing it but I hardly ever looked at it. I kept it on out
of curiosity.”
 “Over the summer, I started getting a rash. There was a lot of humidity and sweat. Once I had that issue, I took it off.
My skin healed so I put the Fitbit back on, but my skin was still really sensitive. After that I just took it off, and now
it’s in my drawer.”
 “Apple is a strong contender based on their current hold in the market.
I see Google and Apple
There’s a lot of anticipation around the Apple Watch. But, I could see
definitely
being
on
the
something entering the space and creating a ripple.”
 “The losers will be any company that doesn’t play with these devices. …
forefront, and I see that
People don’t really want to build for Microsoft.”
happening through partnership
 “I haven’t seen that many reports about Apple’s new watch. I don’t know the
and integration.
price point or if it’ll be something like Google Glass that very few people will
have interest in buying.”
Former Wearable Device User
New York City
 “The sensor space could really explode, especially sensors that are catching
valuable biometric data or able to read the interfaces that are constructionrelated. There are so many things that are slightly automated, like on an oil rig, or some of the applications or
medical software that hospitals buy into.”
Miscellaneous
 “The focus on fashion seems like part of the hype. With new devices and sensors that are created, there will be an
element of design that will be very key. What I’m most interested in is in the weight of wearing an item and the subtle
way it’s placed on my clothing or body. People in the fashion space are very much on the forefront of culture and
technology, but with this it just seems more of a gimmick.”
 “It would be nice to have more data from wearables, but as it stands, there’s just so much data available to interpret.
I would maybe want to know my heart rate if I were training for a marathon. There needs to be a strong rationale for
why I’m wearing the wearable. There’s so much data we already don’t pay attention to. Part of me wonders about
whether there’s going to be a device that will be essential to my daily routine.”
 “A company coming in with more of a revolutionary mindset and perspective and building upon what’s currently there
could eventually partner with larger technology players like Apple or Google in order to latch on to behaviors and
devices that people are accustomed to. I see Google and Apple definitely being on the forefront, and I see that
happening through partnership and integration.”
12. Blueshift Research’s and SurveyMonkey’s August Groundbreaking Trend Report of 1,029 U.S. consumers
Consumer adoption of wearable technology was the top new trend identified by our online survey. The rate of adoption in
this fragmented market is low, but one-third of respondents said they were likely to adopt wearables in the next three
months. We started tracking this space ahead of the possible launch of Apple’s wearable device to see if the release
would push the technology further into consumers’ lives.







Wearable technology adoption among respondents was minimal, but interest was high.
4.5% of respondents already had wearable tech devices.
37.4% of consumers were likely to adopt wearable technology in the next three months.
18% of those were slightly likely to adopt wearable technology.
51.6% of consumers ages 18 to 29 were likely to adopt wearable technology in the next three months.
42.4% of consumers 30 to 44 years old were likely to adopt wearable technology in the next three months.
Some respondents believed Apple’s pending entry into the market would boost wearable device adoption.
48
Wearable Technology
Secondary Sources
The following seven secondary sources discussed a growing wearable tech market and the types of companies that stand to
benefit from the trend. Also highlighted were Apple’s Apple Watch; Intel and Fossil Group Inc. (FOSL) teaming up; and clothing
and jewelry being the next evolution in the wearable tech industry.
Wearable Tech Market
These two articles centered on expectations for the wearable tech to grow to $8.36 billion by 2018; business practices,
mobile payments, and marketers benefiting from wearable tech adoption; and fashion-forward wearables having an edge on
the competition.
Sept. 7 Forbes article
The wearable tech market is set to become a $8.36 billion industry by 2018. The technology is being adopted most often
for business practices, which has improved the ease of mobile payments at retailers and will increase the amount of data
that marketers can use. Companies that focus on these sectors will see the most success in this growing sector.









“To many users, these new devices are often categorized as fun novelties and interesting gadgets, but others see
them for what they really are: a game-changing influence with the potential to utterly disrupt the modern business
world. As such, we’ve recently launched Salesforce Wear, a development platform that can be used for creating
business apps for Android Wear, ARM, Fitbit, Pebble, Philips, and Samsung, as well as other devices.”
“[R]ecent trends indicate that giants in the wearable tech industry are now designing their products with business
applications in mind. The recent wearable tech influx in the business world was launched with the promise of
improving workplace productivity and the overall efficiency of organizations.”
“Companies in the field service industry have already seen the impact of wearable technology, with technicians
donning wearable cameras while out in the field. Wearable ‘smartglasses’ allow many of today’s leading field
companies to solve issues faster, thus saving millions. Some of the most popular wearable devices, such as those
used to look inside patients’ veins, are being implemented in other industries. Construction workers are using this
wearable technology to easily see inside piping and walls.”
“The retail world could also benefit from wearable smart tech, specifically where productivity is concerned. Wireless
headsets, wearable wrist displays, and tech lanyards all allow employees to access information on-the-go. This
means store workers can now look up the information they need without abandoning the customer or visiting a
stationary terminal. The impact on the day-to-day may seem small, but in the long run it can increase retail
productivity tremendously. One study suggests that wearable tech in the workplace can increase productivity by as
much as 8.5%, and that it increases employee satisfaction by 3.5% as well. This impact will likely continue to grow as
more wearable tech pieces are introduced to the market.”
“Smartwatches are also increasing retailers’ productivity with payment processing. PayPal is launching a new app for
the Samsung Gear 2 Smartwatch that will make it possible for consumers easily pay for products and services right
from their wristwatch. Retail employees will be able to accept PayPal payments with the press of a button.”
“And the impact of wearable smart technology isn’t limited to these few examples; in fact, in a 2013 study,
approximately a third of U.S. and U.K. adults surveyed stated that wearable technology has helped their career
development.”
“The influx of wearable devices like Google Glass and smartwatches will open up new opportunities for marketing,
including enhanced customer data collection and insights into user interaction. Smart pieces of wearable technology
allow digital marketers to more easily collect information on the buying habits and locations of consumers.”
“Marketers aren’t the only ones who will benefit from the wearable technology trend. New wearable gadgets mean
enterprises will need to develop apps for new systems, and manual workers will be needed to create entirely new
products. Smart clothing and accessories are already expanding business opportunities, and as this trend continues
to flourish into a multi-billion dollar industry, new possibilities will arise.”
“By the year 2018, the wearable technology market will be worth $8.36 billion.”
49
Wearable Technology
Sept. 6 NPR article
Fashion is becoming an increasingly important role in consumers’ adoption of wearable technology as new accessories
hit the catwalk at this year’s fashion week. Companies like Intel and Fitbit are teaming up with designers and will have a
better chance of becoming a leader in the wearable tech market.








“Wearable devices are strutting down fashion week runways. NPR’s Scott Simon talks with a fashion forecaster,
Rachel Arthur, about whether the new trend will last.”
“Technology might be the next big thing to hit the runways at Fashion Week in New York—bracelets and rings that
can notify you you’ve got a phone call or track the calories you’ve burned. Industry analysts predict that nearly 20
million new so-called wearable devices will adorn customers in 2014. That’s three times as many as last year.”
“[FASHION FORECAST RACHEL] ARTHUR: That you wear, exactly. So I mean, historically we’ve kind [have] seen, over
the past couple of years, lots happening in the sports-based. And those largely have been wristbands. But it’s
become a lot more feminine in the last month or so. There’s been a huge flurry of releases from the fashion industry.
Things like necklaces, some rings, different pieces of jewelry, largely that all have these notification devices inserted
in them.”
“[HOST SCOTT] SIMON: And do they look geeky or chic?”
“ARTHUR: Depends on your opinion. (Laughter). There is a mixture. I mean, there’s definitely some new ones out
there that are working their way—it’s much further towards that chic look. I can give you an example. Opening
Ceremony has just announced one that they’re calling MICA, which is My Intelligent Communication Accessory.
That’s done with Intel. So they’ve got semiprecious gems in them and a kind of snakeskin pattern to them as well.”
“But, there’s still, you know, certainly a big geek element to them. You know, there’s technology embedded, that’s
the whole point. And I’m not 100% sure we’re entirely there, in terms of things that I think everybody would want to
wear. But they’re moving in the right direction.”
“SIMON: Have you seen a device there that you would actually pay money to buy and wear?”
“ARTHUR: So I think the price tag of things makes it a very interesting discussion. I mean, Tory Burch did a
collaboration with Fitbit. She has a bracelet that encases the device within it and there is also a necklace that does
the same thing. Now, it’s $195 for the bracelets and that’s before you’ve got the Fitbit device, which is another 99
something dollars. So you know, we’re talking about not small money here to be able to have this device. And
technology does always start out a lot higher and prices do come down, inevitably. But I do think that that’s going to
be, for the time being, a bit of a barrier.”
New/Pending Releases
These two articles showed Apple unveiling its Apple Watch, and a partnership between Intel and Fossil for a fashion-forward
watch.
Sept. 9 Vox article
Apple unveiled its highly anticipated Apple Watch, which will be out in early 2015. It contains multiple functions, including
payments to merchants, directions through vibrations, and voice control. The Apple Watch needs to be linked to an
iPhone 5 or 6 and uses an inductive charging system.




“Apple unveiled its first smartwatch on Tuesday. The move was hotly anticipated, as Apple enters a competitive and
rapidly expanding market. The new watches will be available starting in early 2015, starting at $349. Here’s
everything else you need to know about the new Apple Watch.”
“There’s a reason Apple invited fashion bloggers to the event today. The Apple Watch is clearly more than just a wrist
computer that does nifty high-tech things; it’s meant to be pretty. CEO Tim Cook told the audience Tuesday that
Apple thought hard about the watch’s look, not just its capabilities.”
“Apple created an interface that allows you to use the watch without having to try to manipulate a touchscreen with
your (comparatively huge) fingers. As Tim Cook said at the event, ‘pinch-to-zoom’ wouldn’t make much sense on a
screen that’s so small. The crown on the side looks like it was meant to wind a watch’s gears, but it instead is used
to navigate: to zoom, for example, and scroll up and down. However, it is still a touchscreen, allowing you to swipe or
scroll with your fingers.”
“The Apple Watch comes in three editions: the regular Watch, Watch Edition (made from 18k gold), and Watch Sport
(made to be “light and durable”). It also has two face sizes—1.5 and 1.65 inches, according to the Verge. In addition,
50
Wearable Technology









the range of strap choices allow the watch to vary in its look, from sporty to dressy. And a variety of watch faces will
also make the watch infinitely customizable.”
“As is standard with smartwatches, the Apple Watch doesn’t do much without a smartphone. And this being Apple,
the Apple Watch will only work with the iPhone. At the very least, you might not need a new iPhone to use it; it will
work with iPhone 6 but also iPhone 5 models.”
“Have you ever wanted to send your heartbeat to someone? No? Well, you can now—you can share your heartbeat as
tracked on the Apple Watch to another watch-wearer. But that’s not all. The new ‘digital touch’ system allows you to
draw small pictures to send to friends; during the presentation, Apple’s Kevin Lynch sent a drawing of a fish to a
friend to ask him if he wanted to get sushi for lunch. It also has walkie-talkie capabilities, allowing a person to
communicate with another watch-wearer. The watch also includes its own system of animated emojis.”
“Apple is billing its watch as a ‘comprehensive health and fitness device.’ Not only will it count your steps and track
your heartbeat; it counts your calories burned, how much activity you’ve done all day, even whether you’ve stood up
recently. The watch is also designed to “learn” about the wearer, suggesting fitness goals. All of this works in concert
with the fitness app on the iPhone to allow you to keep track of your longer-term fitness progress.”
“All of the Apple Pay functionality that Apple unveiled on Tuesday will be available on the Apple Watch. So instead of
tapping your phone to pay for your groceries, you could also just tap your wrist.”
“In addition to giving you text notifications and updating your fitness achievements on your iPhone, the Watch will
also perform other functions, thanks to Apple collaborations with other companies. It will show Facebook updates
and baseball scores, as well as where you left your car (assuming that car is a BMW). Starwood Hotels has also
worked with Apple to create an app that will allow the watch to unlock a hotel room door.”
“One of the features Apple touted on Tuesday is the watch’s inductive charging system. Users will be able to charge
an Apple Watch by connecting a cord magnetically to the back of the watch body. But notably absent was any
mention of how often you’ll have to juice up your watch. Battery life has been a big issue among the smartwatches
on the market.”
“Consider it the Apple Watch’s own system of Morse Code. The watch will do turn-by-turn directions, but instead of
making you listen to Siri’s voice or stare at your watch screen to know where to go, it will simply tell you by feel. One
type of vibration will let you know it’s time to turn left. Another will tell you it’s time to turn right.”
“The watch will work with Siri, the voice-controlled program already available on some iPhones. Pushing the crown
will activate Siri, allowing a user to ask about the weather or find nearby businesses.”
“In addition to all of the other high-tech functions, the watch’s timekeeping is advanced in its own right. Cook
bragged to his audience on Tuesday that the timepiece will be accurate within 50 milliseconds.”
Sept. 8 Canoe.ca article
Intel and Fossil are collaborating on a fashion-forward wearable tech watch, with integrated technology from Intel’s recent
acquisition of Basis.







“Intel, Fossil to collaborate on fashionable wearable tech.”
“The partnership will see the companies pool their resources to spot the emerging trends in wearable technology and
develop products that will appeal to the ‘fashion-oriented’ consumer.”
“As well as bags and accessories, Fossil’s range has a heavy focus on both jewelry and of course his and hers
watches, and the company is no stranger to collaborating with tech firms, or making smartwatches for that matter.”
“With all the buzz currently surrounding Android Wear devices and Apple’s first wearable technology device—
expected to make its official debut at a huge launch event on Tuesday in San Francisco—it’s easy to forget that
Microsoft launched a smartwatch and smart appliance software platform back in 2003.”
“Called SPOT (Smart Personal Objects Technology), the software was supported by a host of leading tech companies,
including Fossil, who launched a range of smartwatches that used an FM radio signal to offer on-the-wrist
notifications regarding the weather, news headlines and emails.”
“Intel is betting big on the future of wearable technology and its ability to make processors for the products. In March
it acquired Basis, which makes the Basis Band activity tracker—a device capable of monitoring heart rate, blood flow
and heat dissipation—and at the start of September announced a partnership with US fashion brand Opening
Ceremony that has already led to the creation of the MICA.”
“Part of Opening Ceremony’s Spring/Summer 2015 line and a gadget that made its catwalk debut at New York
Fashion Week, MICA is a smart bracelet for women that is equal parts jewelry and technology and which will be going
on sale, ‘for less than $1000’ at Barneys and Opening Ceremony stores before the end of 2014.”
51
Wearable Technology
The Future of Wearable Tech
These three articles highlighted circuit boards that are woven into clothing, Ralph Lauren’s smartshirts being used in the U.S.
Open, and MOTA launching smartjewelry.
Sept. 7 Esquire article
New circuit boards now can be woven into clothing for knitted circuits. These can create smart armor to help doctors
measure a bullet or other impact force on the body, and in athletic training or health monitoring gloves and clothing.







“Knitted circuits could be embedded in your clothes, creating smart armor that measures a bullet’s impact or sensorladen gloves for athletic training.”
“Computers can now knit together circuits (seriously!), potentially leading to electronic fabrics that are stretchable,
permeable, durable, and washable. The researchers behind the study suggest their work could lead to wearable
electronics for applications such as smart armor.”
“Circuit boards normally consist of electrically conductive foil laminated onto electrically insulating boards. For this
project, the scientists developed what they call fabric circuit boards, which they fabricated using computerized
knitting machines. Elastic yarns knit together with electrically conductive copper fibers coated in electrically
insulating polyurethane. The resulting fabric is just 800 microns thick, just eight times the average diameter of a
human hair.”
“To demonstrate their material’s usefulness, the researchers used it to fabricate a flexible and stretchable network
of sensors used in a bulletproof vest. This new smart armor could measure the impacts of bullets fired at it, with the
sensors performing well without any mechanical or electrical failures.”
“‘The measured data would help doctors assess the extent of injury,’ says study senior author Xiaoming Tao, a textile
engineer at Hong Kong Polytechnic University.”
“Future devices could include electronic skins or sensor-laden gloves for use in applications such as health
monitoring and sports training. The researchers are already developing fabric sensors and fabric circuit boards for
commercial use.”
“‘The company we work with is called AdvanPro Limited in Hong Kong,’ Tao says. ‘It is anticipated that products will
be made in large quantities before the end of this year.’”
Aug. 25 Gizmodo article
The U.S. Open utilized Ralph Lauren’s and OM Signal’s silver-coated thread and sensor nylon T-shirts to monitor ball boys’
biometric data. Ralph Lauren plans to unveil a full range of clothes in 2015 and views clothing as more convenient form
of wearable technology than watches and glasses.




“Later today, the first balls will be served at the U.S. Open. But this year, the ball boys retrieving all those missed
shots will be under closer scrutiny than usual: they’ll be dressed in nylon Ralph Lauren T-shirts lined with conductive
silver-coated thread and sensors, recording all of their biometric data.”
“In a venture with OM, Ralph Lauren is providing the ball boys with shirts that will monitor heart rate, breathing and
stress levels, allowing officials to keep an eye on the youngsters.”
“Indeed, the decision to equip ball boys with these shirts is a first step. Speaking to the New York Times, Lauren
explained that 2015 will see the company launch a range of clothing—including classic dress shirts as well athletic
wear—containing the smart technology of OM. While the garments don’t have price tags yet, it’s clear decision to
make wearable technology more convenient than watches and glasses.”
“Indeed, the idea of making everything you drape from your body smart is really beginning to gain traction. And we
can see why: the convenience offered by having to do nothing more than slip on a shirt before your activity is tracked
is really quite compelling. We’re just not sure if we’re ready to wear Ralph Lauren just yet.”
Sept. 2 Mashable article
MOTA recently unveiled a smartring that will sync up to smartphones to give people wearing devices updates and alerts
straight to their fingers. Smartrings could be another form of smart technology entering the market in the next year.

“While smartwatches and bracelets are finding a foothold in the wearable-tech space, another device is also starting
to heat up: smart rings.”
52
Wearable Technology





“Following up on its sleek smart bracelet released in 2013, MOTA has unveiled a smart ring that takes up less space
on your body, but still promises the same kind of smartphone-notification interactivity.”
“Officially announced at Berlin’s IFA consumer-electronics show, the MOTA SmartRing is designed as a notifications
hub for your finger, delivering updates when you have new text messages, email, calendar events and incoming
calls.”
“Optimized for use with both Android and iOS devices, the smart ring can also deliver Twitter and Facebook
notifications, as shown on MOTA’s website.”
“We’ve seen ring-like devices before on crowdfunding sites, but this entry from an established manufacturer
suggests a trend toward producing smart rings in the near future.”
“However, early consumer reviews of MOTA’s first smartwatch were mixed, so it may be too early to get excited about
the smart ring’s capabilities.”
Companies Discussed
Device Manufacturers
 Apple Inc. (AAPL) smartwatch
 Samsung Electronics Co. Ltd. (KRX:005930)
smartwatches and fitness trackers
 Nike Inc. (NKE) fitness trackers
 Garmin Ltd. (GRMN) activity, fitness, GPS, golf devices
 Fossil Group Inc. (FOSL) smartwatches
 LG Electronics Inc. (KRX:066570) smartwatch
 Microsoft Corp. (MSFT) smartwatch and fitness tracker
 Motorola Solutions Inc. (MSI) smartwatches
 Symbol Technologies (subsidy of Motorola Solutions)
portable bar code scanners
 JBL (Harman International Industries/HAR)
 Amazon.com Inc. (AMZN)
 HTC Corp. (TPE:2498)
 The Swatch Group Ltd. (VTX:UHR) smartwatches
 Reebok (Adidas Group/ADDYY) sports and activity
impact device
 Razer Inc. activity and life band
 Basis (owned by Intel) fitness and sleep tracker
 Narrative wearable cameras
 Pebble smartwatch
 Martian Watches smartwatches
 ConnecteDevice smartwatch and activity tracking
 Polar Electro activity, fitness and heart rate monitors
 Fitbit activity and sleep trackers
 Misfit Wearables activity and sleep monitors
 Jawbone fitness tracker and phone headset devices
 Withings activity, health and sleep devices
 Xiaomi Inc. fitness and sleep tracker
 Proteus Digital Health wearable and ingestible sensors
 Hexoskin biometric smart shirt
 Omsignal fitness tracking shirt and device
Chip, Sensor, Antenna and Connector Manufacturers
 ARM Holdings PLC (ARMH)
 Advanced Micro Devices Inc. (AMD)
 Intel Corp. (INTC)
Smartglasses and Virtual Reality Device Makers
 Google Inc. (GOOG/GOOGL) Google Glass and
Android Wear
 Seiko Epson Corp. (TYO:6724)
 Vuzix Corp. (VUZI)
 Sony Corp. (TYO:6758)
 Facebook Inc. (FB)
 Blippar
 Canon Inc. (CAJ)
 Imagination Technologies Group PLC (LON:IMG)
 Kopin Corp. (KOPN)
 Movidius Ltd.
 Fortemedia Inc.
 Daqri
 Lumus
 Optinvent
 Meta
 Recon Instruments
 Atheer Labs
 Laster Technologies
 Glassup
 APX Labs LLC
 Metaio GmbH
Smart Textiles
 Michael Kors Holdings Ltd. (KORS)
 Adidas AG (ADDYY)
 Under Armour Inc. (UA)
 Lululemon Athletica Inc. (LULU)
 Burberry Group PLC (LON:BRBY)
 Ralph Lauren Corp. (RL)
 Clothing+ Group
 Diane von Furstenberg
 PureLime A/S
 Shock Absorber
 Kalenji
 Berlei
53
Wearable Technology

























Texas Instruments Inc. (TXN)
Broadcom Corp. (BRCM)
Freescale Semiconductor Ltd. (FSL)
NXP Semiconductors NV (NXPI)
Qualcomm Inc. (QCOM)
Nvidia Corp. (NVDA)
InvenSense Inc. (INVN)
Bosch Ltd. (BOSCHLTD) sensor maker
Atmel Corp. (ATML)
Plantronics Inc. (PLC)
TE Connectivity Ltd. (TEL)
Amphenol Corp. (APH)
Laird PLC (LON:LRD)
Nordic Semiconductor ASA (NDCVF)
Maxim Integrated Products Inc. (MXIM)
Linear Technology Corp. (LLTC)
STMicroelectronics N.V. (STM)
Kionix Inc.
Molex (a Koch Industries company)
Sensoplex
Softkinetic
Leap Motion Inc.
Muv Interactive
Nod (by Variable Inc.)
Silicon Laboratories Inc. (SLAB)
Additional research by Carolyn Marshall, Eva Cahen, Eugenia Lee, Cindy Elsberry and Jacqueline Fox
The Author(s) of this research report certify that all of the views expressed in the report accurately reflect their personal views about any and all of the subject securities
and that no part of the Author(s) compensation was, is or will be, directly or indirectly, related to the specific recommendations or views in this report. The Author does not
own securities in any of the aforementioned companies.
OTA Financial Group LP has a membership interest in Blueshift Research LLC. OTA LLC, an SEC registered broker dealer subsidiary of OTA Financial Group LP, has both
market making and proprietary trading operations on several exchanges and alternative trading systems. The affiliated companies of the OTA Financial Group LP, including
OTA LLC, its principals, employees or clients may have an interest in the securities discussed herein, in securities of other issuers in other industries, may provide bids and
offers of the subject companies and may act as principal in connection with such transactions. Craig Gordon, the founder of Blueshift, has an investment in OTA Financial
Group LP.
© 2014 Blueshift Research LLC. All rights reserved. This transmission was produced for the exclusive use of Blueshift Research LLC, and may not be reproduced or relied
upon, in whole or in part, without Blueshift’s written consent. The information herein is not intended to be a complete analysis of every material fact in respect to any
company or industry discussed. Blueshift Research is a trademark owned by Blueshift Research LLC.
54

12, 2014 Wearable Technology report

Transcription

Similar documents

Slides - Teaching

Ultherapy. As Seen In Us Weekly Magazine…

Submission

Celebrate Wearable Art II!

wrapup - Living In Digital Times

DOWNLOAD AGENDA V1 - Redken Symposium 2016

GPS Trackers for Kids - BlueFire Writing Inc

Energy harvesting