Wearable Technology Industry Analysis Report I: The Perfect Timing

Wearables are undoubtedly one of the hottest topics in the tech industry today. From product functionality and market demand to industrial ecosystems, they have truly captivated geeks, entrepreneurs, and investors alike. VCBeat has previously published reports on wearables.Jeans Sellers in the Wearable Device Gold Rush、Biosensor-based Wearable Devices Attract Strong Investor Interest、Top 5 Hot Solutions in the Wearable Medical Field in 2015Hold on, let’s try to glean some insights from it. This article will provide a comprehensive overview of the pulse of the wearable technology industry, drawing on Raconteur’s Wearable Technology Report. It is broadly divided into four major sections:

I. Development Trajectory of Wearable Technology
II.The Health-Oriented Evolution of Wearable Technology
III.Commercial Applications of Wearable Technology
IV.Three Major Emerging Industries in Wearable Technology

I. The Development Trajectory of Wearable Technology

Wearable technology is arguably the most prolific trend in today’s tech industry, transforming both our work environments and our lifestyles. From fitness-tracking wristbands to Google Glass and the Oculus Rift, this once-niche sector has attracted numerous well-known industry brands. So, how has wearable technology evolved to its current state?

Paul Lamkin—“The earliest concepts of wearable technology can be traced back to the 19th century.”

However, the origin of this technology is generally dated to 1975, the year Hamilton Watch launched the Pulsar calculator watch. This product briefly became synonymous with men’s fashion, so much so that then-U.S. President Gerald Ford also wanted one.

The continuous advancement of wearable technology has prompted greater reflection within academia and research institutions. Progressive thinkers in the academic community predict that wearable devices will transform the way people communicate with one another; however, mass media began exploring these gadgets decades ago.

Whether one is a visionary or an early adopter, we must ultimately return to one point: these predictions may sound perfect, but they are not practical for consumers. It was not until the launch of the Apple Watch that the industry landscape was truly transformed. Since then, at least hundreds of millions of consumers worldwide have begun to understand smart wearables—a level of explosive revolution never before seen in the many years of wearable technology development.

Market research firm IDC predicts that, spurred by the Apple Watch’s impact on the wearable device market, global wearable device shipments will grow from 19.6 million units last year to 45.7 million units this year. This year, shipments of wrist-worn devices are expected to reach 40.7 million units, accounting for approximately 90% of total wearable device shipments. Shipments of modular products (devices worn via clips or straps) will amount to only 2.6 million units, representing less than 6% of the market. IDC further forecasts that by 2019, global wearable device shipments will reach 126.1 million units, with wrist-worn devices maintaining a dominant 80% market share, while modular products and smart clothing will hold market shares of 5.3% and 4.5%, respectively.

Although these figures suggest that the wearable technology industry is approaching a critical tipping point, it was only after Google and Apple recognized the potential of wearables in recent years that a true paradigm shift in self-connectivity began to emerge.

1. Ubiquitous Computing

In 1988, Mark Weiser, chief scientist at the Xerox Palo Alto Research Center (Xerox PARC), proposed the concept of ubiquitous computing. He predicted that computing paradigms would evolve toward ubiquitous computing, marking the advent of the third wave of computing: computers becoming increasingly smaller and omnipresent, encapsulated by the notion that “everything is connected, and computation is everywhere.” Data are being collected and processed ubiquitously, thereby transforming the environments in which we live.

In 2006, American writer Adam Greenfield described Weiser’s concept, arguing that scalable, ubiquitous systems must incorporate provisions for immediate and transparent use by owners, such as clothing that does not require high-tech sensors, processing, or communication capabilities. In 1999, renowned cognitive scientist Don Norman also proposed that the surrounding environment would become increasingly personalized and wearable, with new devices enabling us to interact with embedded environmental technologies unconsciously.

It is only when one wears a Misfit Shine or Fitbit Flex for several consecutive days—recording vast amounts of personal data without ever noticing its presence—that we seem to have truly entered the era.

Overall, the vision of wearable technology in this era is being widely portrayed by the media, and surprisingly, it is as accurate as some media outlets had predicted.

2. A Glimpse into the Future

When watching Knight Rider (a popular sci-fi TV series aired on NBC from 1982 to 1986), you see the protagonist Michael Knight conversing with his voice-controlled wristband, which bears some resemblance to Sony’s SmartBand Talk E-ink calling bracelet. Or take Back to the Future II (1989): you’ll notice Marty McFly wearing a JVC virtual reality headset similar to Samsung’s Gear VR, a virtual reality device the company launched last year.

This could very well be a portrait of wearable technology. In this light, the public’s latent demand for wearables was stimulated by media, television, and films from the 1980s and 1990s, thereby shaping the image of wearable devices in the real world. After all, many engineers currently working in R&D labs in Silicon Valley are deeply influenced by these impressions.

In fact, the emergence of wearable devices in reality and media dates back even further than the 1980s. In 1927, the Plus Four Wristlet Route Indicator helped users navigate using a movable scrolling map cartridge; roughly 90 years ago, Google began encouraging people to wear Android smartwatches; in 1960, Morton Heilig invented the Telesphere Mask, a simulator integrating vision, sound, motion, and scent, in an attempt to bring his concept of virtual reality headsets to the general public.

By that time, the concept of smartwatches capable of making and receiving calls had already become outdated. The film Dick Tracy also featured extensive depictions of smartwatches; an episode from its 1967 pilot showcased a communicative watch equipped with a built-in camera, two dials, and a screen, a device that had actually appeared as early as 1946. Similarly, the American television series The Jetsons frequently featured smartwatches as early as 1962.

3. Right Place, Right Time

The driving force behind the boom in wearable technology, in terms of affordability and practicality, is naturally the advancement of hardware. In early 2014, Simon Segars, CEO of ARM Holdings, told the tech website CNET that even small companies could develop their products at present, because the sensors and processors needed to support low-power wearable devices were readily available. “This opens a door for new companies.”

Current types of wearable technology include fitness trackers, smart belts, smartwatches, virtual reality headsets, and augmented reality glasses. These are not particularly novel concepts; in fact, many categories and their best-selling products have undergone multiple generations of updates.

However, the difference from before lies in the appetite of the mass market. Hardware is making media and academia predict a more realistic proposition. As Weiser said, ubiquitous computing will only succeed when devices are dynamic enough to integrate into our lives.

4. Keeping Pace with the Times

Of course, the definition of wearable technology has always been evolving. The term is changing at an incredible pace, like a seemingly endless conveyor belt. Hearing aids have been distributed globally since 1898, and Walkman headphones became popular in the 1980s. Are these two living, successful examples considered wearable technology?

The answer is, of course they are. And it’s gratifying to see how these early wearable technologies are influencing the emerging landscape of connected devices. For instance, Soundhawk, a neighbor of Apple in Cupertino, has unveiled a smart hearing aid that helps users hear the sounds they want while filtering out those they don’t.

The Avegant Glyph is a pair of over-ear headphones, but it is more than just an audio device; it also incorporates highly innovative display technology known as the "Virtual Retinal Display." However, this is not a conventional screen. Instead, it utilizes 2 million micro-mirrors and proprietary optical technology to directly project realistic, high-fidelity images onto your retina.

As can be seen from the above, wearable technology is not a novel concept. Ultimately, however, we must reach a tipping point where profitability is achieved, hardware becomes sufficiently mature and cost-effective to enable mass production, and mainstream consumer awareness surges.

Therefore, as you hear much about wearable technology, the key point to remember is that what we are seeing now is merely the initial outcome of cultural and social shifts, while what you perceive as wearables is just a passing fad.