In the future of wearable technology, the device is the least important element of the market equation.
Imagine a big whiteboard:
On the left, there are hundreds (perhaps soon thousands) of wearable devices. Some of them are for fitness buffs, some for medical purposes, and others are glorified fashion accessories - but few of them are well differentiated from similar devices. Almost none of them speak the same language or can communicate with one another and many could be easily replicated and replaced by making a few minor revisions to a cheap, off-the shelf sensor device and adding a bit of branded packaging.
On the far right of the whiteboard are consumers, enterprises, healthcare providers, insurance companies, clinical researchers and a bunch of other groups, all looking for ways to get collected data off of the device and into a useful application, or service offering. The market can already imagine a million ways to use this information for our professional and personal lives — it just needs the pool of data to get rolling.
In the middle is where the hard work happens.
First, there needs to be a way to routinely get the data off all these different devices (currently, the average memory of a wearable device is a fraction of that of a low-end smart phone). Then it needs to be standardized so that all the data plays nicely together (think: algorithms). Finally, in order for the data to be useful, it must be analyzed against other relevant data from a variety of sources.
Ultimately, this analysis can result in business intelligence, intellectual property, opportunities and recommendations. Then these assets must somehow find a way to all those different users groups.
The reason that big players like Apple (News - Alert) and Samsung are investing in platforms (and others, like Nike, are looking at getting out of the device market altogether), is because they have the vision to see the wearables market for its intrinsic value: the possibilities available for the data produced by devices, and not the devices themselves.
As the wearables market continues to expand, the winners in the device space will be those that extend their value proposition off the user’s wrist, head, hip, etc., and into practical use cases and applications at home, work, play and in-care.
This may happen through acquisitions, technical partnerships, or perhaps a revised business focus on infrastructure or data analytics solutions, but there’s no question that the devices themselves are the least important factor in the future of the wearables market equation.
Edited by Stefania Viscusi
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