Wearable Computing: The Next Big Thing in Smart Technology?

Prepared for Edward Moss, Instructor ENGW 3304 Northeastern University

Prepared by Varun Kukreja Northeastern University

February 13, 2014

INTRODUCTION Ever since the development and introduction of wearable devices to consumers, much debate has evolved around its use compared to smartphones and other smart technology products. Dave Evans (2013) pointed out that while consumers begin to adapt to wearable technology, personal computing is getting even more personal, with electronic products and chipsets being attached to “clothing, jewelry, shoes, glasses, watches, and even on your skin” (Stedmon et al., 1999). Developments in wearable technology have indeed suggested that it is possible to fully integrate both physical and functional aspects of smart devices, thereby increasing their operational efficiency. These findings suggest that wearable technology has the potential to be far better than the smartphone industry, and that these devices will provide consumers with greater accessibility and product efficiency. Even though wearable devices are still in its infancy, the technology is to survive for the long haul. During the early stages of the Smartphone industry, consumers were reluctant to shift from Desktop PCs. However, Smartphones are now at the center of our lifestyle, with advantages offered such as lower cost, Internet availability, and texting and communications capability (Kennedy, 2014). With continuing advancements in technology, wearable devices have the potential to take on the trend of smartphones, and become the future of communications and information technology. As this industry has only recently begun entering the world of mainstream technology, there is only a limited amount of data available to produce tangible facts and figures. This report will analyze and discuss the current trends in the wearable technology industry. In addition, industry viewpoints regarding wearable devices will be analyzed thoroughly, with emphasis on privacy issues and the degree of usability to the consumer. After stating the industry viewpoints, future trends in wearable technology will be discussed, putting into perspective the possible future uses of wearable devices, as well as its potential to be the next big thing in smart technology. FINDINGS Defining Wearable Technology Several comparisons have been drawn between wearable technology and ubiquitous computing. Ubiquitous computing was developed to enhance the human-computer relationship, where humans would interact with computers on a lifetime basis, involving a complicated mix of culture and society with computer engineering (Weiser, n.d.). As a result, based on this confusion, there is no real definition of wearable technology. However, wearable devices have to pass two relevant tests: that the device is wearable and that it is smart (Walker, 2013). By stating that the device needs to be smart, Shane Walker (2013) iterates the fact that wearable devices need to have similar or greater functionality than current smart devices, particularly smartphones. A majority of wearable devices need wireless and Internet capability, as they’re required to interpret data once it’s collected from the users surroundings. In addition, wearable devices need a connectivity feature in order to display the data they’ve interpreted and produce results to the consumer. While such characteristics are relatively important to define a wearable device, it is important to note that availability of innovative functionality within a wearable device will go a long way in determining the success of the industry, as consumers are constantly looking for new and innovative products to improve their lifestyle. Major Technology Movers Google Glass The tech giant set the tone for other manufacturers to follow suit after it partially introduced the Glass to consumers for testing purposes. It was already dubbed by the Time Magazine as one of the greatest inventions of 2012, after which large Information Technology companies such as Apple and Microsoft filed for a patent for similar devices to further continue research in the augmented reality field (Hyman, 2013). Google’s project lead Steve Lee reiterates the primary purpose of the Glass, with a majority of its services surrounded around picture taking, mapping, and offering location services, all of which are secondary compared to the functionality of smartphones (Carr, 2013). These issues will only add to the reluctance of consumers to shift to wearable devices from smartphones, thereby continuing speculation on the usability and durability of such devices. The Google Glass adopts a distinct Head-Up Display (HUD) structure, which is basically a device placed on a users head to collect and interpret data from the users surroundings (Wilson, 2013). Many might argue that the HUD structure tends to look socially awkward, which may prompt consumers to accuse the product of taking off the prestige factor from advanced smart devices, thereby driving them away from the industry before it even flourished. Pebble Watch The Pebble watch originated as a Kickstarter project, which allows entrepreneurs and developers to publish their products online and attract consumers and investors. This watch was developed to be compatible with all major mobile platforms, namely Apple’s iOS and Google’s Android versions, as it synchronizes with a users smartphone and notifies any incoming messages, calls, and control their music (Casserly, 2013). The Pebble watch stole the show in the wearable computing industry, as none of the major technology developers were close to launching their version of a wearable device. The watch sold at a retail price of $150, cheaper than any major smartphone device, and, as a result, this project racked up close to 69,000 investors and raised over $10 million since its introduction (Casserly, 2013). The early launch of the watch enabled its manufacturers to generate early consumer demand, which helped a great way in popularizing the product. In addition, compatibility of the device with almost all available mobile platforms automatically generated a larger consumer market, which is contrary to what the major technology developers have offered so far. Samsung Smartwatch Inspired by the Pebble watch, Samsung was the first major technology developer to make wearable devices available to consumers (Moss, 2013). Unlike the Google Glass that set wearable technology research in motion for a host of manufacturers, evolution of watches involving smart technology was largely as a result of advancements in computer technology, making components and chipsets smaller and smaller thereby enabling them to be installed in devices such as watches, glasses, etc. (France-Presse, 2013). However, despite Samsung’s efforts in marketing their Smartwatch, the product hasn’t garnered much success ever since it was released in October 2013. Newman (2013) states that the company has shipped over 800,000 units of the Smartwatch to retailers and other distributors in 2013. Although this figure does not reflect direct sales to customers, such product estimates provide no competition when compared to sales and distribution of smartphones in the same time period. This poses heavy implications on Samsung’s ability to steer through such negative remarks against their product and provide a device that equals the cost in terms of its usability. In addition, the watch can only synchronize with two devices, both manufactured by Samsung, thereby increasing consumer costs and reducing its demand. Other Products

Initial emphasis on wearable computers is to provide consumers with more products and services, where data is manipulated to provide targeted information as discussed above. Projects such as the Google Glass, the Pebble watch, and the Samsung Smartwatch have already steamrolled a number of projects in the wearable technology industry. For example, Sony and Apple have been in the works to launch their own Smartwatches (Levitt, 2013). In addition, FitBit and Nike’s FuelBand gather and interpret health and fitness data from the users bodily movements and display them on the users smartphone. While Google Glass may seem to be the pioneer in engineering wearable devices for the face, developers such as Epson have entered the foray with their own version of wearable glasses, controlled by an external wireless device using Google’s Android platform (Kelly, 2014). Advancements in wearable technology through a wide variety of independent and major developers gives hope for tremendous competition in the market, much larger than the smartphone industry. While intense competition has the potential to drive away the smaller independent manufacturers, it will also be key to the success of the market, as consumers will be spoilt for choice when it comes to wearable devices. In addition, it remains to be seen whether all the major technology developers choose to forgo their product exclusivity and make their wearable devices easily accessible and compatible on all mobile platforms, which may help normalize market trends while intensifying competition between manufacturers, thereby driving them to create the best innovative products in the wearable technology industry. Relevant Industry Issues Lack of Innovation Although a lot has been talked about how independent and major technology developers are advancing in the field of wearable technology to produce their best innovative products, the industry is still in its infancy and a growing majority of consumers have complained against the lack of functionality offered on current wearable devices. A survey conducted by Dimensional Innovations states that there are a lot of discrepancies between consumer’s taste and preferences and current offerings in wearable technology (Stark, 2013). For example, pioneers of the Google Glass Thad Starner and Steve Mann noted that the primary purpose of the Glass wasn’t computing, hence deeming it as a novelty product (Miller, 2013). It was merely developed to collect and process data seen through the naked eye, using services such as Google to process such information (Hyman, 2013). Wearable devices are already falling short of expectations while being in its infant stages, contrary to how the smartphone industry boomed and surprised the world with their abundance of uses available to consumers. As a result, consumers are unsure about how can a wearable device positively influence their lifestyles, thereby adding to the manufacturers’ woes and generating minimal returns on their investment towards wearable technology. In addition to the lack of functionality, consumers are also concerned about the product aesthetics. While developers such as Samsung, Apple, and Sony are already entrenched in developing Smartwatches, it is important to note that consumers would rather prefer a wearable device on their hand than the wrist (Stark, 2013). The trend is understood considering that almost all smart devices in the early 21st century had some form of a strap-on arrangement to attach their device to the hand. For example, armbands were introduced to attach smartphones to a users arm while performing sports related activities. Devices on the wrist could be uncomfortable to a variety of consumers, particularly due to the large screen size installed to display information. Aesthetic issues concerning Smartwatches and wearable glasses as discussed earlier take away its stylish appeal, which largely explains why consumers are unsure of or reluctant to learn more about wearable technology (Stark, 2013). However, current lack of innovation can only influence manufacturers to conduct more research in this field, thereby adding to its potential to grow bigger in the smart technology sector. Interaction and the issue of Privacy Majority of the sentiments raised by Google’s project lead Steve Lee have resonated throughout the new generation of wearable devices. Almost all wearable computers have been designed to enhance social media interaction for consumers, thereby making devices even more personal (He, 2010). Even though these devices have explored the opportunity to seamlessly collect data and manipulate it based on the users’ taste and preferences, several barriers prevent wearable computers from being more socially available than smartphones. To enhance human-to-human interaction, wearable computers require face-to-face interaction between users constantly in order to make social media content readily available. However, face-to-face interaction is a distant possibility since users are expected to be around no more than two to three mutual friends in a given space at a given point in time, thereby limiting the functionality of wearable devices (He, 2010). Increasing the capability of face-to-face interaction by providing information on any individual in a given space would thereby escalate the issue of privacy, which has been resonated by a majority of consumers ever since the evolution of wearable technology. Privacy has been a concern for researchers and manufacturers ever since ubiquitous computing was introduced in the market in 1991. Early researchers, despite being aware about the issue of privacy, didn’t integrate these concerns while developing their product, thereby having no control mechanisms to stop this issue from escalating (Hong, 2013). In addition, issues surrounding the value offered by a wearable device have so far not been addressed by manufacturers, particularly Google, who’re currently concentrating on testing their product through non-developers and publishing videos and ad campaigns that add only to the fashion appeal of the Google Glass (Hong, 2013). Market Drivers Almost every Information Technology device finds its application in a variety of industries. For both personal and business uses, wearable devices have the potential to enhance efficiency through conveniently interpreting and providing data to users. Perhaps one of the most basic and early applications of 21st century wearable devices is in the Infotainment industry, particularly smartphones and gaming consoles (Walker, 2013). With the technology market growing increasingly interdependent, trends in industries such as infotainment are extremely important to the success of wearable devices. The smartphone industry is expected to amass 1.2 billion shipments in 2016, while the estimated number of registered gaming users is currently expected to be at 77 million (Walker, 2013). Wearable devices can complement the trends in these products in order to develop a niche for itself in the market. Some of the potential applications of wearable technology are mentioned below, that have the capability to complement these industries and enhance the overall workforce efficiency: Sports Industry An estimated 61% of early wearable devices were said to be concentrated in the sports industry, with products such as FitBit and Nike+ evaluate performance and track body movements in order to improve athlete efficiency (ABI Research, 2013). Coaches and sports officials can very easily interpret an athlete’s data and performance statistics through the use of wearable technology. A prime example is the use of sensors in sports apparel to collect quantitative data while conducting sports activities, which are directly interpreted to a computer in order to display such information. This information can be used to improve player performance, a process that is called physiolytics (Wilson, 2013). This tracking mechanism can be used not only to increase player performance, but also look after players’ health conditions and safety. Service Industry Google has already been testing a driverless car in its testing centers, which could well become a reality in the near future (American Psychological Association, 2013). This technology can enable users to increase productivity while driving hands-free, which enables them to complete tasks while being driven from one point to another. In addition, huge supply chain companies such as Amazon and Tesco have already employed the use of bracelets to track and monitor data being shipped in and out of their warehouses, which also increases company efficiency (Wilson, 2013). While performance monitoring has become the core use of wearables in the sports industry, service sectors can also make use of this information to monitor worker fatigue and provide wellness programs to enhance their capacity to work. Security Sector With the use of wearable devices, the safety and security sector is expected to increase its revenue by around 3% over the next five years. Devices such as the Nymi bracelet monitors user’s pulse and interprets the same to grant access to the user to its home, doors, and even bank accounts (Stern, Kane, Memarzadeh, & Zubkov, 2013). Another device to enhance this industry is the NFC ring, which uses Near Field Communication technology to scan identification cards, thereby reducing the threat of counterfeit IDs and novelty cards. In addition to these products, a lot of advancements have been made to integrate biometric scanning technology with wearable devices (Stern et al., 2013). Its application is already visible on the latest smartphones, which enable users to unlock their devices through in-built fingerprint sensors, while wearable security devices are also currently available to homeowners at a costly price. Future Trends Expectations regarding the development and feasibility of technology products give some hope to wearable computers. One cannot fully determine what to expect when devices such as Google Glass become available to consumers, as we have to take in the possibility of consumers adapting to changes in technology, which has been proved to occur periodically as and when new devices are introduced in the market. Despite the negative press currently surrounding the wearable technology, 2013 was considered the year this industry thrived, particularly with Smartwatches, when Samsung and Apple were rumored to conduct research on developing watches that connect to smartphones via Bluetooth (Mims, 2013). Future estimates predict that by 2016, wearable technology is expected to be a $6 billion dollar market (Shaoolian, 2013). Furthermore, by 2018 wearable devices will be shipped out at the rate of 485 million shipments per year, up from 14 million shipments since 2011 (ABI Research, 2013). Compared to smartphones, wearable technology has the scope to develop and become popular at a much faster rate. Devices such as Smartwatches are expected to grow bigger despite its early setback with Samsung’s Smartwatch. Increase in competition is likely to add to the functionality of these products, which will provide consumers with added variety and increase in value. However, it remains to be seen where exactly this industry is heading and how many varieties of wearable products will be offered to consumers, both of which will pave the way for the success of wearable technology. CONCLUSION Information Technology in general has grown to be an unexceptional asset to humans. Advancements in technology have transformed one from using a typewriter to using a word processor (Cranny-Francis, 2008). Wearable devices have the potential to find their use in important industries such as home security, sports, etc. through the opportunity to make data easily accessible to its users. However, manufacturers need to be careful regarding the timing of introducing wearable devices to consumers, and have to ask themselves the question that have we saturated the capability or smartphones and can wearable devices perform the same and even more functions compared to smartphone devices. While the wearable technology industry is still growing, it has already been met with considerable criticism from consumers and analysts. However, it would be unruly to disregard the potential benefits of wearable technology. Large manufacturers such as Samsung, Google, and Apple need to create a niche for this technology and add appeal to its products, which will be an important factor while determining the sustainability of this market. Regardless of the challenges and obstacles of wearable technology, it surely seems to be something that can drive and shape our future from driverless cars to precise athletic performance data and statistics. Undoubtedly, more industries will start pursuing the benefits of wearable technology and what it has to offer. While wearable devices are still considered a novelty item by a wide variety of critics and analysts, advancements in this technology promises to add greater productivity to consumer’s lifestyles, thereby potentially being the next big thing in smart technology products.

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