Do wearables require a new kind of ecosystem?

Forrester analyst JP Gownder says tech companies must create a new type of ecosystem for wearables and the Internet of Things (IoT). However, this ecosystem shouldn’t necessarily focus on developers, hardware makers or service companies.

Image Credit: Adafruit (Atmel-powered Gemma)

Rather, Gownder believes it should prioritize brands, healthcare providers, retailers, financial services companies and governments.

“Let’s be honest: A lot of 1.0 wearables devices are ugly, and tech companies aren’t always the best purveyors of fashion,” Gownder writes in a recent blog post. 

”The wristwatch has been around since 1571 – so watches have a deep cultural history into which smartwatches must integrate themselves. Partnerships between wearable vendors and fashion brands [sic] will be critical.”

Similarly, says Gownder, health and fitness wearables must become embedded in the normative healthcare system.

“Having doctors, hospitals, insurance companies, and corporate wellness programs distribute fitness wearables embeds the information collected into the entire healthcare system,” he continues. 

”Doctors can use the data to treat patients, leading to better health outcomes. And consumers can sometimes receive a discount on their health insurance rates by participating.”

Last, but certainly not least, Gownder envisions a retail future where a wearable device owner walks into a store, is greeted by name and offered customized clothing options in his or her own size.

“Yet, this entire wearable scenario depends on adoption of the technology by retailers,” he emphasizes.

However, Gownder remains understandably optimistic about wearables, noting earlier this week in an InformationWeek article that the rapidly evolving technology represents the next logical step in the mobile revolution.

“If done right – with vigorous ecosystems of brands, retailers, healthcare providers, and even governments tapping into their value – wearables will create more efficient and seamless experiences for wearers,” he concludes.

“As consumers discover the value of wearables, technology managers can expect to see employees bringing smartwatches, smartglasses and other wearables into the workplace. For some of these wearables, existing practices for smartphones and tablets (like the use of mobile device management services) can be adjusted to accommodate new wearable devices.”

Wearables are the new mobile revolution

Writing for InformationWeek, Forrester analyst J.P. Gownder confirms that wearable devices represent the next logical step in the mobile revolution.

“If done right – with vigorous ecosystems of brands, retailers, healthcare providers, and even governments tapping into their value – wearables will create more efficient and seamless experiences for wearers,” he explains.

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“Many of these wearable scenarios will come about through a surprising channel – the enterprise. While most of the world focuses on consumer wearables, enterprises might offer an even bigger opportunity. Over the next few years, companies will experiment with wearables in both customer-facing and back-end work scenarios.”

More specifically, Gownder outlines 7 ways wearables will enter the enterprise:

• Via healthcare
• 
Through innovative in-store experiences
• 
Helping field service workers become more productive
• Revolutionizing warehousing and logistics
• 
Keeping tabs on employee collaboration
• Customer-oriented brand rewards
• BYOD

“While company-purchased devices will play an important role in many of the scenarios mentioned above, the power of bring your own device (BYOD) hasn’t waned,” Gownder adds.

“As consumers discover the value of wearables, technology managers can expect to see employees bringing smartwatches, smartglasses and other wearables into the workplace. For some of these wearables, existing practices for smartphones and tablets (like the use of mobile device management services) can be adjusted to accommodate new wearable devices.”

Forrester explains Wearables 2.0

Forrester analyst JP Gownder says wearable devices will ultimately change the way workers do their jobs and how consumers manage their lives.

“Every day (and surely this week), I talk to inventors, entrepreneurs and established vendors entering the wearables space. The dynamism I encounter in this space reminds me of the early days of the Web in the late 90s,” Gownder writes in a recent blog post.

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“Of course many wearable computing concepts and executions will fail, as is true with any new technology movement. [However], Wearables 2.0 will weed out some of these false starts and focus on three success factors.”

First, says the analyst, companies must develop more comprehensive business paradigms. Indeed, if Wearables 1.0 was about creating technologies, Wearables 2.0 is all about crafting rich business models.

Next up is finding a way to continue working within existing institutions.

“Selling fitness wearables to consumers one on one through retail channels might have its merits for dedicated exercise enthusiasts, quantified selfers and those who want to lose weight,” Gownder explains.

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“But having doctors, hospitals, insurance companies and corporate wellness programs distribute fitness wearables embeds the information collected into the entire healthcare system… [Clearly], Wearables 2.0 will intersect with the existing institutions of your life in useful ways.”

Last, but certainly not least is creating enterprise value.

“Because of consumerization – the fact that the technology we have at home is often better, faster-moving, more agile, more mobile, etc. than the tech we are issued at work – we tend to assume now that *all* innovation will originate on the consumer side,” he adds.

“Wearables 2.0 will upend that a bit, because the most useful enterprise devices are often highly specialized. Wearables 2.0 will help enterprises provide value to their customers – a key technology benefit in the age of the customer.”

Forrester sees a bright future for wearables

Forrester analyst JP Gownder says wearables are just taking off and have a bright future ahead of them.

“Sure, wearables are facing a hype bubble. So did the Internet; that didn’t make it any less significant in the long run,” Gownder opined in a recent blog post. 

“I’m impressed with the wide array of companies, entrepreneurs and agencies innovating in this space, which is really more of a long tail of different computing market segments.”

Image Credit: Adafruit (Atmel-powered Gemma)

According to the analyst, 2014 will see commercial availability of new wearable devices, a richer set of business models, the entry of bigger players (like Apple), and the maturation of business models. 

Specifically, Gownder emphasized that enterprise wearables have a particularly rich future ahead of them, often in customer-facing situations.

As we’ve previously discussed on Bits & Pieces, wearables are expected to make a huge splash at CES 2014 this January in Las Vegas. Indeed, Angela McIntyre, research director at Gartner, confirmed that digital health and fitness will be one of the hottest segments at CES 2014 – with 40 percent of exhibitor floor space expanded for the lucrative segment.

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To be sure, despite some of the inevitable hype surrounding wearables, the segments for fitness and personal health devices have been among the first to gain traction.

“Wearable electronics has its strongest consumer base among fitness enthusiasts and wider consumer interest in these devices is leading to broader adoption. The worldwide revenue from wearable electronic devices, apps and services for fitness and personal health is anticipated to be $1.6 billion this year, increasing to $5 billion by 2016,” McIntyre explained.

Image Credit: Adafruit

“[In addition], wearables support the ‘quantified self’ trend of people tracking their vital signs, activities, and capturing images of what they experience during the day. The fun of wearing and using gadgets to track fitness and health is appealing, and so is using their apps and services. Online communities provide camaraderie with those having similar goals, [with] wearable electronics providing new motivation to consumers for improving fitness and health.”

It should also be noted that analysts at ABI Research see wearable wireless device revenues exceeding approximately $6 billion in 2018. Of the four segments tracked, sports, fitness and wellness are the largest, never dropping below 50% share of all device shipments over the forecast period.

Interested in learning more about wearable tech? You can check out Atmel’s white paper on the subject here.