The wearable revolution is here. Or not. Depends on your perspective.
Not long ago, research firm International Data Corp. said in the worldwide wearable tech device industry will have grown by 38 percent year over year in 2016, with 110 million units in the field by the end of the year. Lest you think that number is impressive, the search firm stated that the wearables uptake should increase to about 237 million by 2020.
Not a bad run, should it materialize. But a number of hurdles must be jumped to get to widespread wearables adoption. In an interview with PYMNTS’ Karen Webster, Shaunt Sarkissian, founder, president and CEO of Cortex MCP, the mobile wallet technology firm, the question arises as to whether, as Webster put it, wearables represent a “solution looking for a problem.”
Not necessarily so, said Sarkissian, “If you want to strip down the wearables to its base,” said Sarkissian, the concept extends from a watch to a piece of jewelry, to an IP enabled device (regardless of its appearance). The first use cases that everybody gravitated to was fitness…and the market is now became a platform,” as firms such as Microsoft staked their claim to wearables as health trackers.
Yet, said Sarkissian, the equipment itself seems to be effectively going the way of commodities, as far as the health market is concerned. (Microsoft, for its part, seems to be abandoning the Band fitness tracker, as trade reports indicated last month). The true opportunity, said Sarkissian, is “what can I do with this IP connected device? This could be used for everything, such as how do I make a payment…for access….and for biometrics, for example, to start my car.” Thus far, he continued, payment firms have done a good job of working with mobile devices, but wearable tech may have the additional benefit of helping those companies move beyond just providing payments.
One issue that poses a challenge to device makers, noted the executive in response to a query from Webster, stands as form factors remain a pain point. Simply put, the devices themselves are rather clunky, and, as Webster posited, the impetus to wear a smartwatch (even if it is Apple’s) to track health related issues can pale in the the event that one might wear a regular watch at the same time.
Thus, form factors must take smaller, well, forms. OEM providers, said Sarkissian, can work with jewelry providers, with a smaller chipset, to embed functionality in a piece of jewelry or perhaps even clothing — “as for ‘wearable underwear,’ I don’t think we’re quite there yet,” joked Sarkissian.
But with smaller form factors, the challenges remained tied to power consumption, and data requirements — which may make it difficult to embrace with the most minute form factors such as injectables and even tattoos. Static identification methods, said the CEO, such as those tied to biometrics (eyeball scans, anyone?) pose a real problem if they are compromised. As such, it remains important to to have at least some interactive features tied to wearables, for security’s sake.
IP devices, said Sarkissian, are likely to be more payments-enabled among wearables going forward. “I think we’re also going to see a number of non-network use cases,” he added. In addition, adoption in areas as far flung as Africa will embrace payments via wearables. Technologies such as tokenization, which have traditionally been applied to the payments space, can be applied to other areas.
For wearables adoption to truly take off, said Sarkissian, standards across technology remain important. Chip companies, such as NXP, working with OEMs, offered Sarkissian, “if they have enough muscle to invent devices that are going to be standardized…it may not matter what the form factor is.” The real value comes, then, with utility, where, in on example, Sarkissian noted that transit payments via wearables may bring real value to users. “Like any ecosystem, it takes time to evolve.”