The recent launch of the Apple smart-watches, and the fact it was sold out within 15 minutes, may suggest, that there is a huge market for wearable tech. The question is when is it going to burst; and whether your company can wait that long?!
Eight years ago the IPhone had a great launch as well, Nevertheless, it took smart-phones four years to reach 6% market penetration! The slow adaptation of consumer technologies, challenges wearable tech startups to think different in the wearables era, mainly in order to survive.
Wearable tech is said to be the future. There seem to be no doubt about it. Giant companies line up to take over the Business to Consumer market (B2C), equipped with the needed patience, and lots of money… They know it will take time. It took smartphones nearly four years to reach 6% penetration from when the devices first started to register on a global level.
The wearables have a more complex starting point than smart-phones. While the latter consisted at first of one major vendor (Apple), in the Wearable tech sector there are already many active companies and young start-ups. The recent researches, which reveal the slow adaptation of wearable-tech (11% in the US), calls for the smartphone lessons to be learned by the various companies. Otherwise, some of them may not live long enough to see the wearables “big boom”.
Many Investors predict that in the long term, huge companies like Apple, Samsung and others, will “educate” the markets to use wearable-tech. After all, that was the case with smart-phones. The questions is “when” rather than “if” . However, no one could predict which of the current players, mainly mid size and small, could wait that long?
The good news is that the Business to Business market (B2B), might hold some surprising and immediate opportunities for those companies. In fact, it could give them a valid life line. Wearable-tech, in the corporate market, is taking giant steps and becoming a must have, mainly in some segments. I would say in two main business segments in particular. The businesses of entertainment & health.
The Entertainment segment, when it comes to wearables, could include “fun enablers” like amusement parks and all kind of events, mainly sports. The other side of the relevant entertainment segment is the fashion industry. When it comes to wearables, the health segment includes fitness on its different aspects.
Entertainment & Wearable tech
The early adopters, on a huge scale were Disney. Anyone who visited a Disney Park in the recent months could experience it. The named “Magic Band” each member of my family got , were all we needed from Disney to make our time magical. It served as our hotel door key, our entry “tickets” to the different parks, and even our wallet at Disney’s shops and Starbucks. Reports shows that there are tens of millions visitors to those parks each year. When wearable tech deals with millions of users, it is no longer a pilot, but an existing industry. Disney has created the standard where the wearable tech is a part of the experience. Solution which is a “must have” and not “nice to have”. Now the other Parks will have to follow.
Same goes for sports events. It is said, for example, that most of the audience who attend basketball matches owns subscription cards. Cards which are shown upon entry. Why not give those loyal customers a wearable device, which will not only have the data to guide them through, but will also serve as a VIP merchandise for those worthy loyalty members.
When it comes to fashion, wearables are getting its initial, but strong grasp. Some major brands (Under Armor, Nike and others) already started making their products “smarter” (bags, coats, sportswear), giving its owners, the ability to better share his/hers style digitally. Looking at lifestyle goods – it seems that within a year or two, there will be no more watches without a smart-band built in.
Health & Wearable tech
Nowadays wearable devices could be noticed at hospitals, elderly care etc. Wearable tech could supply the 24/7 data. The NY times indicated lately, that people started giving out private data for discount in Insurance ( April 15). It is quite common to see large insurance companies among the investors of wearable-tech companies. When it comes to Fitness and wearable devices, there is no need for no explanations. Fitness was, and still is, the strongest need so far, which makes wearable tech devices so common. Nowadays fitness clubs offer their loyal members a training based on their real time data gathered at their wearable device.
To conclude, in the business areas ,wearables has a need and growing presence.
It asks the wearable tech companies for some adjustments to its devices, to meet the corporate market demands. True, the biggest market will be the B2C markets, as consumers are the “longest tail” a seller could ask for; But until the B2C tail will start shaking, you can definatly do some business, B2B business, with the corporate market. It will gain you better understanding of the various needs of wearable tech, alongside with incomes and market grasp. It will mainly keep you rolling, getting ready for the “big boom”..
**The writer: Avihai Michaeli, does Startups innovation scouting for investors, and serves as an Advisory board at some Startups, among them wearable technology companies.