According to market analyst firm Frost & Sullivan, the Aussie wearables market is still in its inception stage, but with the Apple Watch “igniting” interest in wearables, and accelerating sales of wearable devices, this will spur greater innovation from other players in the industry and drive new partnerships amongst vendors and distributors.
Frost & Sullivan forecasts a CAGR of approximately 78% for the period 2014 to 2018, with revenues expected to reach $1 billion by 2018.
Audrey William, Head of ICT Research, Frost & Sullivan Australia & New Zealand, says this growth will be contributed to by a combination of factors, including innovation from local startups, high levels of activity in mergers and acquisitions and competition amongst global players such as Google and Apple “as each attempt to dominate the market for the Internet of Things (IoT) in Australia”.
He said that in 2014, the consumer wearables segment accounted for 99% of total wearables revenues and predicts that demand for these products is likely to increase even more over the next five years, with the consumer segment expected to account for a substantial part of overall revenues over the forecast period.
Williams says there has been minimal use of wearable technology for business applications.
“In the enterprise (business) segment, most wearable technologies are currently at the prototype stage. However, Frost & Sullivan expects significant enterprise adoption of wearable technology from around 2017 as several companies, especially in the Mining and Oil & Gas industries are already looking to trial wearable products.“
Frost & Sullivan says that he advances and innovations in software will allow businesses to harness and leverage wearable technologies beyond the current capability of
“For instance, new wearable technology sensors embedded within smart shirt/vests can enhance worker safety and safer working environments for field technicians in mines by recording and analysing data on temperature, air quality and gaseous leaks,” Williams says.
“Ultimately, wearable technologies has the potential to impact every industry in Australia, including Mining, Oil & Gas, Engineering, Healthcare, Education, Manufacturing, Logistics and Leisure & Entertainment.”
Wonjae Shim, Research Analyst, ICT Practice, Frost & Sullivan Australia & New Zealand says Big Data will play a key role in transforming the future of wearable technologies as wearable devices collect large amounts of data.
“Subsequently, service providers and data analytics companies can derive detailed analysis, providing trends and insights to service providers and businesses to make informed decisions to improve business processes and sales, reduce costs and enhance R&D capabilities,” Shim says.
According to Shim, several local Australian technology start-ups have already joined the “wearables innovation foray”, venturing to launch products like smart shirts, smart wrist bands and smart bands for health monitoring and fitness tracking.
“Some of these companies include Catapult Sports, Ollo Wearables, Smash Wearables, Wearable Experiments and MJ Bale, and they offer fresh innovation and expansion options via acquisitions for the bigger, established players in the market. Frost & Sullivan expects mergers and acquisitions and cross industry collaboration to be a key feature to drive the next level of innovation in the wearable technologies market.”
And, according to Shim, eventually, competition will intensify as market players vie for dominance within the Internet of Things arena.
“Key players are likely to be Apple, Google and Samsung. These vendors don’t just contend within the wearables market, but are building a larger ecosystem of products and services across home automation, home entertainment, home security, glass, wristbands and heads unit displays, as well as an ecosystem of products across mobile devices and home appliances.”
Shim says, however, that wearable technology is not devoid of issues and obstacles, with key challenges to mass adoption include technical impediments such as battery life, miniaturisation of embedded sensors, wearable data management and interoperability and compatibility among competing vendors and platforms.
According to Shim, a major restraint in the growth of the Internet of Things and the use of wearable technologies will be security and, as a consequence, Frost & Sullivan expects significant investments will be made toward security enhancements which will result in an increase of product take-up and growth in the overall wearables market.