The Future of Wearables: Vertical or Horizontal?

To date, the adoption of wearable devices has been predominantly niche, industry—otherwise known as ‘vertical’—specific, centering largely on fitness and medical-related devices. Many claim this is a strategic approach; better not to be a jack-of-all-trades and a master of none in such a burgeoning and competitive market. Yet, this is incongruent with the ‘horizontal’ functionality we have come to expect (and which has inspired such rapid adoption) in our smartphones, tablets, and smart TVs—and indeed what Apple Watch is attempting to capture. But the question is, what will inspire mass adoption of wearables? More [compelling] vertical wearables? Or a ‘horizontal’ wearable to replace our reliance on smartphones?

‘Wearables’ as an Umbrella Term Clouds Predictions

Most consumer technology categories are pretty self-explanatory: personal computers are laptops or desktops; smartphones are smartphones; tablets are tablets, etc. It bears consideration however, that ‘Wearables,’ is really an umbrella term for any computing device worn on the body. This variety blurs the picture for wearable penetration forecasts and predictability. The semantics and nature of the term itself complicates the question of vertical vs. horizontal.

The following data chart from L2 Think Tank Research shows the number of shipments of various types of wearable devices today (size of bubble) vs. the projected CAGR for the same types of wearables over time (horizontal axis). (Apologies for the less than optimal image quality.)

Source: ABI Research & MobiHealth News

Source: ABI Research & MobiHealth News

So while perhaps fitness trackers lead today’s wearable device shipments sold, this data suggest wearables may really take off when wearable manufacturers adopt a more ‘horizontal’ application.

Friend or Foe: The Smartphone’s Curious Role in Wearable Adoption

The growth of wearable market today is also majorly dependent smartphones. And while the global smartphone market continues to increase rapidly, this will either accelerate or deter wearable adoption. Given vertical wearables’ reliance on smartphones to extract rich data and customize features and capabilities, wearables are still generally seen as add-on accessories to smartphones. Inversely, a horizontal wearable tethered to a smartphone may be even more redundant.

Until wearable manufacturers are able to divorce the value we get from wearables from reliance on the smartphone interface, or consumers find justifiable and distinct value in having both, shelling out more money for each new wearable ‘accessory’ may be hard to justify for the masses.

Enterprise Wearable Adoption May Set the Stage for Vertical Adoption

The role of the enterprise in consumer adoption of wearables is another important consideration. In the way Blackberry phones—initially an enterprise device—‘warmed up’ the masses to cell phones with enhanced functionality, wearable adoption in the workplace may serve a similar role for wearables in the consumer word. Where as in the consumer world, we are always looking for the next must-have, (typically horizontal) personal computing technology, vertical solutions dominate the enterprise (because they are what justify investment). Specific use cases targeted for advancing or making more efficient specific functional practices make better business sense than adding another general communications platform. As more consumers find themselves adopting wearables for work, they may come to realize (and demand) the richness and enhancement a vertical wearable experience can provide.

A Waiting Game for Innovation

Predicting technology adoption is, on some level, a fool’s errand, given the shifting (and even more unpredictable) nature of culture and macroeconomic forces. But for now, developers will continue innovating new wearable devices. Consumers will continue to wait to be compelled. Until the wearable industry can create a device—either horizontal or vertical—that serves a widely applicable, but unmet need, adoption will creep along… if not taper.

Note: Image credit for the featured image for this post belongs to Deloitte University Press

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