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Alternative Business Models are Key to Sustained Uptake
Excitement pervades the market about wearable device opportunities. Large device manufacturers and niche technology companies are constantly innovating to launch new devices for varied applications. However, market uptake is still limited to a niche customer group due to pricing, battery, data accuracy, data security, and weak business case challenges. Market evolution is expected with the development of sustainable business models such as subscription services and enterprise or vertical specialization. This study outlines key points of inquiry in the wearable devices market and highlights prospective growth opportunities.
Introduction and Scope
- Advances in mobile technology are changing the way humans and machines communicate.
- Over the past decade, growing smartphone proliferation has taken connectivity to the individual, facilitating efficient communication and empowering the provision and consumption of new services.
- Even though an extremely personal device, the smart phone is still an external accessory which can limit ubiquitous connectivity.
- Wearable devices can overcome these shortcomings when embedded with biological and physiological sensors that individuals wear everyday such as watches, glasses, contact lenses, clothing, shoes, or even tattoos.
- Still at an early stage of growth, the broad definition of wearable devices is evolving and expected to give rise to individual market segments.
Wearable Device Landscape
The growth of wearable technology is leading to convergence between technology and industry-specific OEMs.
The technology vendors offering wearable devices constitute 2 groups:
- Device manufacturers can leverage preexisting partnerships with network operators or chip and processor manufacturers to bring new devices to market.
- Currently, device manufacturers are largely focusing on smart watches or fitness bands.
There is also some buzz surrounding connected headsets, glasses, and clothing.
- Most niche startups approach the market from a particular type of device or vertical use case such as fitness, healthcare, payment, or fashion.
- New consumer-oriented companies fall somewhere between device manufacturers at one end, largely focused on technical innovations, and retail providers at the other,
launching aesthetically-pleasing devices.
- Design is an important factor influencing the marketability of a wearable device, especially in the consumer market. Vertical-specific OEMs such as watch manufacturers can
leverage years of experience designing to consumer tastes when developing fashionable wearable devices.
- Activity has increased among retail OEMs, especially in the smart watch market, which will extend to other types of devices such as clothing and jewelry.
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