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Wearables 'a slow burn' but worth the channel backing

The market for wearables is expanding and with it the potential revenue streams for the channel

The most recent figures from IDC for the wearables market show a shift from basic products to smarter (and higher priced) devices, as well as a big jump in wearables with cellular connectivity. While that’s encouraging, what does it mean for channel partners? What role, if any, can they play in the sale and support of wearables?

Ramon T. Llamas, Research Director, Mobile Devices and AR/VR, IDC, predicts that there will be more adoption by telcos as cellular connectivity increases. “Wearables will provide incremental revenue streams to them, and with more brands and platforms getting into the mix, the total available market opportunity will increase steadily – albeit slowly – over time,” he says.

He believes that retailers will start to dedicate more space to wearables. The rise in connected health in the next few years will also lead to wearables becoming “more available through insurance companies, clinics, and hospitals, especially as wearables become part of a patient’s therapy”.

He thinks the effect of cellular connectivity on adoption of wearables is “going to be a slow burn”, mainly because designing applications to exploit that connectivity could take time. “Voice calls and data updates are the low hanging fruit. Streaming music is gaining traction right now. I’d like to see more things like location and navigation, streaming connected health, and other apps that could take advantage of cellular connectivity,” Llamas adds.

Exertis Mobile Business Manager, Paul Murdoch, is in doubt that wearables “have some untapped potential”. He notes the progression from fitness focused products or devices that could provide alerts to users of text messages and e-mails to allowing users to call or text without being connected to their smartphone. But while wearables have become smarter, “so have the consumers, demanding more for their money but also being prepared to pay more for the desired outcome”.

The concentration on health and lifestyle has certainly “helped the market. Sports and health are consistently linked so the ability to combine devices with other apps such as Garmin and Strava which tracks and records various activities like cycling, running and swimming via GPS, creates interesting opportunities”.

As more people wear fitness trackers, style is becoming an important consideration which has led to the involvement of fashion brands in offering wearable accessories that integrate with activity trackers.

Murdoch says there is also a “B2B play for wearables”. Echoing Llamas , he argues that “extending fitness and sensory trackers to more clinical-grade wearables is clearly one such opportunity for the market and this is increasingly evident in the healthcare sector”. There are already examples of sensors that allow diabetics to continuously track their glucose levels and devices to track blood pressure, for example. The next generation of lifestyle wearables could help provide users with insight into their everyday lives to help them stay healthy and predict problems before they arise.

He adds that more and more wearable technology products “are being designed with business applications that can improve productivity and efficiency in a variety of vertical markets. As these develop, vendors and distributors will need to support resellers through training and education to take these to market, recognising the business benefits for the user”.

David Fearne, Global Practice Leader for Business Intelligence at Arrow, notes that while the wearables and connected devices market started around consumer devices such as fitness trackers, navigation systems, headsets and healthcare aids, “there are more opportunities developing around technologies like augmented reality as well”.

He argues that the major opportunity is “not in the device or service, which represents a one-time sale; instead, it’s about looking at the whole offering that can be put together and supported for years as part of a service revenue stream”. This involves considering everything from support and software through to lifecycle management. “By addressing the whole opportunity as a service, resellers and service providers can build more value for customers and retain customers for the longer term,” Fearne claims.

Partners need to recognise “the digital supply chain of IoT” to understand what they  can offer the wearables market. For example, sensors in devices can constantly gather location, time, performance and, in some cases, health data which can be sent back to a gateway, collected and turned into a value added service. This sensor data can also be linked up to display technologies for advanced technologies like AR. Wearable technologies can also be used to provide predictive maintenance and support in the field.

Fearne believes that the development of wearable technology “opens up many opportunities for the channel, including providing solutions that perform real-time data management and end-to-end security”, such as the encryption of data sent from the device, scanning and remediating security breaches, as well as safeguarding sensitive data. “That approach needs providers who understand the customer’s business model and how to support everything from the sensors and software through its lifecycle,” he adds.

David Brassington, Business Unit Director, Tech Data Mobility Solutions, says the commercial segment is developing as businesses “begin to wake up to the clear employee productivity and engagement benefits through specific wellness programmes”. The US is leading with high adoption rates but things are developing at a much slower pace in the UK “so we believe this represents a key growth area in the next 12-18 months”, he adds.

Brassington suggests that resellers “will need to partner to succeed. Wearables will need to be customised and integrated with other systems and devices, so this remains a fairly specialist area for now”. There is “a bit of crossover with IOT and data collection and analytics projects but this still requires partnerships and specialist knowledge – wearables will only be part of the whole solution”.

He expects there to be “some good opportunities in the public sector – and these may emerge quite soon”. A number of “blue light organisations are looking at ‘officer wearables’ and IDC has predicted 61 percent growth for this category of the market between 2017 and 2022”, Brassington adds.

There are also likely to be more developments around smart glasses, although he admits this has been stymied to date by the absence of  a product that has been able to “capture the imagination of consumers and businesses and set the market alight”. Instead, any movement “is likely to come from the direction of AR/VR where there is a lot of development activity now, mostly focused on gaming, but with some potential in the commercial and public sectors as well”.

While there’s no doubting that wearables have enjoyed no small measure of success in the consumer space, the business market is lagging some way behind. But the consensus appears to be that there is some opportunity for channel partners. The good news is that there’s still plenty of time.

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