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POWER BOTTLENECK

One of the most pressing issues for makers of wearable technology devices is the availability of power storage solutions that strike a balance between functionality and wearability. Technology experts count on ongoing advances in the area of energy harvesting and storage solutions (e.g., lithium coin cells, wireless/inductive charging technologies, kinetic energy harvesting) to propel battery capacity, reliability and longevity onto reasonable levels. Electronics and materials innovations (e.g., MEMS, flexible electronics) could help eliminate safety concerns and pave the way for aesthetically pleasing and functional designs. Ultimately, developments in the area of advanced display, communications and sensor technologies (e.g., low-power LEDs and flexible display technology, ultra-low power connectivity platforms, low-power GPS and other sensors) will play a decisive role as consumers expect hardware that combines supreme battery performance, seamless functionality, and aesthetic appeal.

ENABLING TECHNOLOGIES

Strategists in the wearable space will look for progress in the area of micro-electronics (e.g., MEMS, integrated circuits, printable electronics, interactive tattoo implants) to prepare for a paradigm shift towards the need for robust, light, thin, flexible and stretchable electronic components of wearable devices with new form factors. Moreover, the industry hopes for breakthrough battery innovations (e.g., wireless

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charging, energy harvesting, biobattery implants) and ultra-low power wireless technology standards (e.g., Bluetooth Smart) that would set the stage for a world of ubiquitous connectivity. Especially hardware makers anticipate to upgrade their value proposition as advances in materials science (e.g., smart textiles, advanced materials) and interface technologies (e.g., low-power LEDs and flexible display technology, natural language processing, gesture control) should improve many aspects of wearability (e.g., shape, aesthetics, safety) and usability (e.g., learnability, interactivity).

SECURITY CHALLENGE

The advent of wearable technologies has unleashed the next wave of consumer privacy concerns over the collection of personal data required for individualized, intelligent and contextual experiences. As with the majority of technology innovations, the level of consumer trust in novel technologies will greatly determine the acceptance of technology intrusiveness. This relationship will further be shaped by the instigation of precautionary measures and regulatory provisions with regard to data security and privacy in public and workplace settings (e.g., Google Glass bans, BYOWD policies, airplane usage). What is more, to overcome the security challenge all stakeholders in the wearable space are called upon to contribute to the resolution of personal safety issues associated with the ubiquitous use of wearable technologies as well as the interfacing of technology with the human body (e.g., driving with glass, compatibility and toxicity of implants, contact dermatitis).

TECH DIVIDE

The fast progression of digital emancipation has intensified the fray between digital natives and digital immigrants. This tech divide is mirrored in the formation of stereotypes related to early adopters of wearable technologies (e.g., “Glassholes”, glass arrogance, the “chosen few”) and in the emergence of counter movements that fear exclusion, surveillance and invasion of privacy (e.g., “Stop the Cyborgs”). All that goes along with a growing potential for consumer activism engendered by newly emerging technology-related diseases (e.g., technology anxiety and fatigue). The extent to which these societal discrepancies will solidify directly impacts the speed and breadth of consumer adoption.

DIGITAL HEALTHCARE REVOLUTION

The potential and momentousness of wearable healthcare applications constitutes a critical driving force in the wearable technology industry. The use of wearables (especially smart glasses) in hospitals and software applications (e.g., voice control checklist, video-based communication platform) could liberate physicians and facilitate faster and more informed decision-making. However, the acceptance of wearable technologies in healthcare environments depends on market actors’ ability to negotiate the status sensitivity of medical professionals and to overcome privacy and image issues. On the consumer side, the acceleration of personal health monitoring (e.g., fitness tracking, Quantified-Self) and telehealth (remote monitoring devices and assistance) unlocks a huge market potential.

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SUSTAINABILITY UPHEAVAL

Producers of wearables need to be aware of the enabling role of wearable technologies for breakthrough Internet of Things (IoT) applications that advance sustainable energy consumption and resource saving (e.g., smart homes, smart cities). In this context, a big opportunity lies in the re-education potential of the Quantified-Self movement that impels the transformation of consumers into more self-aware and health-conscious citizens (e.g., health and fitness tracking, productivity tracking, posture monitoring).

ROAD TO STANDARDIZATION

Industry players are challenged to revisit their business models in consideration of the speed and scope of standardization efforts between hardware (e.g., wireless charging) and software platforms (e.g., operating systems, enterprise software). Standardization could accelerate industry collaboration and growth and make for greater performance consistency of wearable devices. In this context, the advancement of wireless communications and low-power data exchange standards (e.g., Wi-Fi, Bluetooth, NFC, LTE-A,) is seen as a key factor for the seamless integration and interconnection of open systems. But as the industry evolves from a state of primordial fragmentation to maturity and consolidation, decision-makers must prepare for a variety of different standardization paths (open vs. closed vs. de-facto).

REGULATORY BATTLES

Business opportunities for wearable tech ventures are influenced by the degree and nature of regulatory measures (e.g., ban, statutory laws, vendor guidelines) to safeguard personal privacy and public safety. This includes issues such as the use of wearable devices in public places (e.g., driving with glass, airplane usage; glass bans) as well as in workplace settings (e.g., BYOWD policies, HIPAA compliance, and FDA approval). Here, data protection reforms that address the gradual disconnect between wearable technology and regulation (e.g., EU “data minimization principle”, “right to be forgotten” and the right not to be 'profiled' without consent) will play a major role in defining the industry’s legal playground. Likewise, regulatory approaches to contain health and safety concerns related to the progressive interfacing of technology with the human body (e.g., implants, contact lenses, contact dermatitis, battery fires and overheating) will leave an imprint on the public safety debate.

CONSUMER ADOPTION BEHAVIOR

There is still some uncertainty as to how consumer characteristics (e.g., personality traits, demographic, socio-economic factors, technical experience) will affect the level of consumer awareness and excitement. Therefore, the occurrence of “Tech Resistance” and “Calculated Pessimism” is to be observed closely. From a consumer perspective, frictionless adoption and long-term engagement are directly linked to the extent to which new wearable products are designed to address consumer needs and preferences in terms of baseline adoption criteria (e.g., quality / robustness, intuitive user experience, aesthetics) and human factors (e.g., fundamental needs, cognitive activity, physical aspect). Furthermore, managers have to be mindful of the way social

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factors (e.g., opinion leaders, need for personal privacy) can influence the public debate and current of opinion surrounding wearable technology (e.g., aesthetics and privacy debates).

TECHNOLOGY USAGE PATTERNS

The role of technology in people’s lives (e.g., everyday companion) and degree of interconnectedness of devices and data (e.g., “everything connected”) will ultimately determine the degree of pervasiveness and contextualization of wearable technology (e.g., Quantified-Self, BYOWD, IoT). The degree of technology interweavement (e.g., technology embodiment, invisible technology) and technology individuality (e.g., technology as identity expression, blurring lines between fashion and technology) both present a critical facet of the relationship between humans and technology. The evolution of human-machine interaction and the adoption of novel user interfaces (e.g., glanceable user interface, holistic interface design) will have ramifications for the form factor debate , i.e. consumer attitudes regarding different mobile device categories (e.g., replacing the smartphone), the identity of wearables (e.g., multi-purpose vs. single purpose; stand-alone vs. companion) as well as the modularization of functions and forms.

EVOLUTION OF INDUSTRY STRUCTURE

The balance between collaboration and competition, including inter-industry relations (e.g., competition within the value chain, strategic partnerships) and cross-industry affairs (e.g., healthcare fusions, fashion attack) will affect the extent of industry fragmentation and its road to consolidation (e.g., niche, volume). In addition, each players’ business model is dependent on the value chain capacity in the wearable technology industry, This capacity, in turn, is impacted by infrastructure readiness (e.g., ubiquitous broadband connectivity, cloud access); hardware component performance and cost (i.e., Moore’s Law), and software innovation (e.g., form factor compatibility, user interaction alignment).

ECOSYSTEM COMPETITION

In terms of ecosystem competition, the defining question is how the “Clash of Titans” (Apple vs. Android Powerhouses) will pan out. The outcome of this battle will shape the nature of emerging product ecosystems (e.g., Apple, Amazon and Google universes), software ecosystems (e.g., iOS, Android Wear) and customer experience ecosystems (e.g., Apple Health Kit, Nike Plus).

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