The first time we came across wearable technology was back in 2000, during a trip to MIT's (News - Alert) Advanced Technology Labs, where we spent a fun-filled day scoping out the many wonders of unfettered MIT imaginations. Among the many things we saw that day was the first fully functioning 3D printer we'd ever come across. It has taken some time for that technology to take off, but it has finally arrived.
On the wearables front, the one thing closest to reality at the time were sneakers that had been set up to generate electricity and to provide batter charging power. In our demo the product being charged happened to be a cell phone battery - yes, even then mobile devices were front and center. As for the rest, the professor providing the various demos had to wear a vest, which sported all of the essentials of a personal computer. And yes, there were wired in glasses that housed a miniature mechanism to provide access to the computer's screen.
Everything was hardwired of course, including the sneakers that provided the power for the computer and the cell phone. It did not make for an attractive outfit, and we did not come away from the experience wanting any of it, though we did lust after the 3D printer. At the time MIT was also deep into Lego Storm technology, which we also wanted.
Fast forward to today and 3D printers are now entirely real. Augmented reality glasses are also now very real, courtesy of Google (News - Alert). There are also all sorts of wireless healthcare products that are entirely comfortably wearable, some of which are in a position to actually save lives. Some wearable tech is purely for entertainment value, and a good amount of it has serious military and industrial application.
The ease with which this wearable technology can be worn means that users can go for long periods without removing it, allowing for extensive data gathering capabilities. In a very real sense, data gathering and transmitting of that data in real-time and from essentially any location is key to the overall value of the technologies. Mobility and wireless connectivity are at the center of the entire wearable tech value chain.
We've come a long way in 12 years and now the market is preparing to enter its first boom phase. In 2011 roughly 14 million wearable technology devices are estimated to have been shipped according to a new report from IMS Research, a firm that was recently acquired by IHS (News - Alert). The report notes that the wearable technology market is clearly on a fast track growth path, estimatin that shipments are likely to rise by more than 500 percent from 2011 to 2016.
That percentage of growth suggests that shipments will increase to at least 92.5 million units, based on the most likely forecast scenario from IMS Research. The chart below highlights this growth trajectory, which also shows a more aggressive scenario on the right side of the chart that suggests as many as 170 million devices may make it into the marketplace.
The low-end forecast, as shown in the chart, predicts shipments to rise to only 39.2 million in 2016, and presumes wearable technology market growth will be limited by factors such as a lack of product availability, poor user adoption and deficient overall experience. We doubt that any of this will actually prove to be the case, and our own estimate is that sales will likely fall somewhere between the mid and high ranges shown.
In 2011 healthcare, medical, fitness and wellness devices were the key drivers for sales. According to IMS Research, continuous-glucose monitors were the highest-grossing devices overall for revenue. IMS also notes that the need for continuous data on blood glucose levels, particularly Type I diabetes patients, has become critical in the treatment of the disease, providing impetus for monitor devices. Medtronic, Abbott and C8 MediSensor are the companies playing heavily in this field.
At the Consumer Electronics Show back in January 2012, the tech wearables market certainly manifested itself most –in fact almost entirely – within the healthcare exhibitor space. This is not likely to change anytime soon, even in the face of Google's new glasses. IMS believes - as we do - that even in 2016 the medical, health and fitness markets will continue to be the key drivers for the industry. There is no real argument against this and one of the interesting things about these devices is that they tend to be quite affordable, so that price is not a deterrent to overall market growth.
In the high-end forecast IMS takes into account and factors in a much larger entertainment market segment - Kinect and other such technology will be key here, but we can also expect glasses of which Google is now the leading edge, to grow rapidly. Finally, IMS also suggests, and we concur, that smart watches are likely to emerge that will pack significant mobile technology within them that can be used for all sorts of things ranging from health monitoring to game playing.
One might think that perhaps Japan, which has long been the top tech gadget-loving country, would continue to lead in the tech wearables market as well. However, as IMS points out, the United States is in fact the biggest region producing wearable devices at this point in time and this is not expected to change anytime soon. IMS suggests that Europe will become the second largest tech wearables region by 2016, primarily driven by healthcare and medical applications. Finally, look for Japan to bring up the third largest geographical region.
What we haven't really seen yet - even though there are examples out there - is truly wearable technology that is actually incorporated into the clothes we wear. At least in the sense that they are built into so that it becomes hard to detect that there is technology embedded in them. It is still a "gadget world" - albeit a mobile one - we live in, though we can look for the "gadgetness" to continue to become ever less visible. We're not there yet, but we will be before the decade is out.