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The Case Against Wearables

Feb 12 2014, 6:42am CST | by , in News | Technology News

The Case Against Wearables
 
 

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The Case Against Wearables

This is supposed to be the year wearable computers go mainstream. Hundreds of wireless, battery-operated devices were unveiled at the Consumer Electronics Show in January: smartglasses, watches, jewelry, fitness bands, even a pair of Web-connected underpants. If you buy the hype, we’ll soon all be connected 24/7 from the inside and out, emitting streams of data on our heart rate, sleep patterns, steps taken, sex, toothbrushing and UV exposure.

The problem: The hype is years ahead of the market. Big and unresolved questions remain about pricing (too high), battery life (too short), utility (too limited), looks (too ugly) and privacy (too scary). “We’re a ways away from the Borgification of the consumer,” says Bill Briggs, chief technology officer of Deloitte Consulting, which is predicting that 10 million wearable devices will be sold this year in a market valued at about $3 billion. (Compare that with 1 billion smartphones sold in 2013.) “We’re going to need to see new categories emerge and existing categories evolve.”

Wearers of Google Glass augmented-reality spectacles, which can record video discreetly, have already been banned from some restaurants, casinos, movie theaters, strip clubs and hospitals. Last year’s much ballyhooed Samsung Galaxy Gear smartwatch has been panned for its lack of apps, uninspiring design and $300 initial price tag for a device that relies on smartphones that sell for about the same or less.

“Many of these devices are going to be like New Year’s resolutions — they’ll get a lot of attention and joy for the first few weeks before ending up in a drawer,” says Scott McGregor, CEO of Broadcom, which manufactures low-cost integrated chips that help make wearable tech possible.

On The Market Today

Samsung, the world’s largest smartphone maker, moved into wearables early to prove it could be faster to market than archrival Apple, which is expected to release its rumored iWatch this year. The Galaxy Gear synchs to a handful of Android smartphones via Bluetooth and notifies the wearer of texts, calls and e-mails. But critics don’t like the one-day battery life and wartlike camera lens on the strap.

It could look better, admits Young-hee Lee, head of marketing for Samsung’s global mobile business. Lee, whose wrist dangles with a blingtastic, cream-colored Gear encrusted with ten sparkling diamonds, is charged with getting consumers to fall in love with Samsung’s wearable gadgets. That may include smartglasses this year.

Samsung’s biggest challenge, which everyone in the category faces, is balancing engineering and design, an issue of greater importance for a bracelet or glasses than a smartphone that stays in your pocket. Samsung is talking to fashion houses and jewelry companies such as Swarovski to help make its smartwatch look as good as Lee’s. At CES a startup called Pebble launched a Rolex-style Steel smartwatch for $249, while health-tracking-bracelet maker Fitbit recently teamed up with designer Tory Burch on a “superchic” fitness accessory due out this spring. Having sold a bit more than 1 million units since launching the Gear in September, Samsung will have a new version out this spring when its next flagship Galaxy phone is released. Though battery life will remain a paltry 24 hours, the next Gear will be slimmer, lighter and put its camera on the watch face so customers can change the band.

Crucially, it’s also expected to have its own SIM card for making and receiving calls, a function lacking in most wearables and one that may hold back the bigger market until it’s in place.

Until now the only mainstream smartwatch to make calls is the Filip, a colorful plastic band embedded with a tiny SIM card and aimed at children. It can call up to five preset numbers. Essentially a GPS tracking device, it was created by Norwegian entrepreneur Sten Kirkbak in 2009 after his young son was lost for 30 heart-stopping minutes in a shopping mall. Kirkbak engineered the watch to not only track kids but also make and receive calls using a preset list of five numbers. AT&T started carrying the device in November for $199 with a $10 monthly plan.

It took two years of engineering to build a product small enough to contain separate voice and data connections and stylish enough to be worn, says Filip Technologies CEO Jonathan Peachey. Among the chal?lenges: building an antenna that can curve around the wrist and finding a power module that doesn’t overheat. Even so, the Filip is large and bulky.

For all the seeming variety of wearables available today, sales are almost entirely derived from one category, fitness monitors, which account for nine out of ten devices sold, according to Accenture. The dominant bracelet brands–Fitbit, Nike and Jawbone–have access to plenty of capital (Fitbit raised $43 million in venture funding in August) and have crammed all kinds of sensors into their wristbands, but there’s very little protecting them from competition from an unknown startup with $10,000 raised from Kickstarter. The bill of materials for a wearable can be $10 or less, thanks to chips that now integrate a processor, connectivity and memory, versus a bill of materials of about $100 or more for a smartphone, says Broadcom’s McGregor. “Anybody with an idea can basically build a prototype with less than a year’s worth of work from one engineer. … It’s a petri dish of innovation.”

A Wearable You Actually Want to Wear?

Of course, just because they build it doesn’t mean consumers will want to wear it. “After three months only 40% of people still wear these things,” estimates Chander Chawla, a tech consultant who has advised scores of venture capitalists and manufacturers on bringing wearables to market. “If the problem you’re solving is that I don’t have to get my phone out of my pocket, I’m not sure that’s a huge enough incentive to spur the market,” says IDC analyst Jonathan Gaw.

For health-tracking bracelets especially, people will see real value in wearing one only if they put it on every day. Manufacturers have to provide a fun and addictive social experience for wearers. Fitbit lets you follow and compete with friends through its mobile app, and Fitbit has found that the more friends its customers add, the more they’ll use the device. The other value hook is saving money. Since early 2010 Fitbit has sold software to thousands of companies that want to monitor employees as part of preventive health and corporate wellness programs. On average 20% of workers join corporate wellness programs; more sign up when Fitbit is involved, says Amy McDonough, who helps run the programs.

Oil giant BP gave free Fitbits to employees who agreed to walk 1 million steps in 2013. More than 23,000 employees enrolled, and nearly three-quarters achieved that goal, winning them 500 “wellness points.” Getting 1,000 points in a year made them eligible for BP’s premium HealthPlus Plan, which was half the price of the standard health plan. BP claims its wellness program helped cut health care costs by 3.5%. McDonough expects to eventually see insurers work directly with consumers who use the Fitbit to adjust individual premiums.

The downside: Companies may start using bracelet data to punish rather than reward. Grocery chain Safeway has a voluntary program for nonunion employees that charges a heftier premium if they fail certain aspects of a biometric screening test, with their drop in health costs being hailed in Congress. “I’m really hoping to get some standards set for these guys,” says Pam Dixon, a privacy advocate who has testified before Congress about data brokers. “Consumers need to have a really clear choice about information that’s shared outside the company, even if it’s an employer program.”

The biggest challenge for wearables is what defines them in the first place: how they look. The Fitbit and Nike+ FuelBand have gone for the spartan plastic-band look, with only the Jawbone Up holding some degree of style. In Silicon Valley’s engineering circles success is still largely measured by number of units sold or how accurate a tracker’s step count is, says consultant Chawla. Few have focused on taste and the behavioral insights that are fundamental to the business of selling stuff you wear.

That’s why all eyes are on Apple. While it wasn’t first to market with a smartphone or tablet, Apple’s design sense and ability to integrate gadgets, apps and online services set the standard others follow.

Here are some of the wearables we took a look at rated on a scale of 1 to 10.

Health & Fitness Monitors 

Fitbit Force: 8
Nice enough tech, but the real story is that it’s making fitness social by letting friends share stats and spur one another on. ($130)

Nike+ Fuelband: 7
Battery drains if synched and checked all the time. Slick design means you (probably a man) can wear it as a bracelet if you tire of all the tracking. ($149)

IHealth: 7
Glucose monitors and pulse oximeters with a dash of decent design show how special medical needs can be tracked. (from $60)

Glasses

Google Glass: 5
Optical display in front of your eye keeps you plugged into the Matrix; has a built-in camera that can get you kicked out of the movies. Expect stares. ($1,500 or less)

Metapro Glasses: 6
Hitting store shelves this summer, augmented-reality specs let you swipe through projected images that hover in the air. Early tech for home use. ($3,650)

Smart Watches

Filip: 8
Tracking device for kids that also makes calls. It’s a bit on the chunky side but will put parents’ minds at ease. ($200)

Pebble: 6
Kickstarter success now offers the Steel, with a Rolex-style strap, but lack of new tech could see it fall behind what’s coming from Apple and Samsung. ($249 as shown)

Samsung Gear: 6
Bulky smartwatch synchs with a Samsung phone to show notifications at a glance. Battery lasts only a day, but a new Gear is due out this spring. (from $250)

Miscellaneous

June By Netatmo: 6
Bracelet bling that tracks sun exposure has fashion appeal–but may lose favor if UV sensors became standard in other kinds of wearables. ($99)

CSR Smart Necklace: 4
A collaboration between Bluetooth engineers and a U.K. jeweler yielded a light that changes color to match an outfit. Looks nice. Best for the truly bored. (NA)

Proteus: 8
FDA-approved ingestible sensor is part of a digital feedback system that keeps tabs on medication and activity. ($TBD)

Dog Monitors

Voyce: 5
The bulky collar can track your dog’s activity for a week, but it’s not cheap. ($300)

whistle: 7
Measures Rover’s exercise and sleep stats so that the master can rest easy. Rivals such as FitBark are nipping at its heels. ($130)

Source: Forbes

 

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<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
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