By Joyce Deuley
Fitness trackers, intelligent glasses, wireless ear buds and more are flooding the market as more companies launch integrated wearable technologies—soon smart shirts, smart underwear, and smart jewelry will be in every closet and on every body. Several large players like Intel and AT&T are joining the fray, with Intel’s acquisition of Recon Instruments and AT&T’s plans to sell six more wearables in store, including Case-Mate’s Rebecca Minkoff Notification Bracelet, Healbe GoBe, Mio Fuse, the Misfit Flash, and Withing’s Activite and its Activite Pop at the end of the month. All of this falls in line with Fitbit’s plans to go public tomorrow, with valuations around $3.4 billion and plans to sell at $17-$19 a share. Additionally, Google recently announced it’s Project Soli at the Google I/O conference, which is supposed to offer hands-free manipulation of connected devices, relying on hand gestures to control smart watches, radios, and more.
But with all of the chatter around how explosive the wearables market will be by 2020, we need to remember the functionality and continued use of such wearables is not nearly as impressive. For example, Fitbit’s numbers look very positive, clocking in 2014 revenues at $754 million with at least $130 million in net revenue, but consumers tend to drop off between 60%-70% within the first year (Barron’s). And, let’s not forget the disastrous release of Google Glass, where “glassholes” roamed freely. While Recon’s Jet glasses ($700 a pair) can serve additional functions beyond notifications or photo/video capabilities, i.e., providing stats while exercising, what sort of stickiness will they possess—and at that price tag, who cares? Though, I’m not sure that Intel is too worried, since it has recently been in talks with other companies, such as TAG Heuer and Luxottica Group to produce luxury smart watches and eyewear respectively.
The wearables market, much like the IoT, is still figuring itself out between form, function, and pricing. But, as prices continue to drop as materials become cheaper, the hardware becomes smaller, and much of the competition drops off through maturation, we’re going to see more integrated wearable technologies become the norm, rather than luxury items. In fact, one market that has adopted would-be luxury wearables is in manufacturing. Google Glass has teamed up with GM and Plex Systems to supply factory workers with real-time training and keeps them in touch with workers in the back office, as well as to improve efficiencies on the manufacturing floor. Perhaps this is where the true value of wearables resides.