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WEARABLES AND

INTERNET OF THINGS 2015

Sunil Maulik, Ph.D.


A. A History of Wearables

Wearable technology first originated from the field of ubiquitous computing and the history and development of wearable computers. With ubiquitous computing, wearable technologies shares the vision of interweaving technology into everyday life by making technology pervasive and lessening the friction of interaction between human and machine. Throughout the nascent development of wearable computing, this vision has been contrasted and affirmed. The history of wearable technology is influenced by both of these responses to the vision of ubiquitous computing (1). One of the earliest “wearable” computers was the pocket calculator[2] first introduced in the 1970s, followed by the calculator watch, introduced in the 1980s. Also in the 1980s, cheap, fast and highly reliable computer systems became embedded into automobiles and airplanes, and the rise of so-‐called “embedded systems” (tightly integrated hardware and software that did not need maintenance and was highly reliable) for industrial use predated their application into consumer wearable products. Examples of wearables today range from Bluetooth headsets designed into a pair of earrings with a hidden microphone, a Spy Tie, which includes a color video camera, and USB Heating Gloves keep hands warm when plugged in.[3] More recently, wearable technology such as the Jawbone Up or Fitbit have applications in monitoring and real-‐time feedback for athletes.[4] The decreasing cost of processing power and other components is encouraging widespread adoption and availability, evidenced by Fitbit recently filing for an Initial Public Offering (IPO).[4]

In general, a wearable computing device can be thought of as having three components, each of which has significant implications for market development and study. These are

The User Interface (or UI) is highly specific to the type and usage of the wearable, and requires significant design considerations. The Compute Engine may be part of the wearable, part of a local device (e.g. a smartphone) or may be entirely in the cloud. Lastly, the Analytics & Feedback are a layer on top of the Compute Engine that provide the user with actionable feedback in (near) real-‐time that leads to a desired behavior.

Wearables – A Definition

Juniper research[5] defines a ‘smart wearable device’ as an app-‐enabled computing device (that is a device which accepts input and processes that input) which is worn on, or otherwise attached to, the body while being used. In some cases a wearable device may also be a fashion accessory.

Compute Engine ( local or remote)

Analytics & Feedback

Input Output


Most wearable devices are always-‐on and accessible at any time, with constant interaction between the user and the device. This definition covers a wide range of devices from watches to clothing to displays, any of which can either work independently or in conjunction with an external platform, such as a smartphone or tablet.

The Wearables Market in 2015

While Wearables technology is in its infancy stage, it is expected to become a $1.6 trillion business in the near future, according to research by Morgan-‐Stanley[6]. Analysts project sales of wearable devices will grow at a 154% annual compound rate through 2017, where 248 million devices will be sold. The figure will grow even further after that and sales of wearable technologies are expected to reach one billion by 2020. Customer surveys by Forrester Research[7] of types and locations of wearable devices on the human body reveal the following preferences:

Wrist 42% Clipped on clothing 35% Headphones/Earbuds 21% Shoes 20% Clothing 19%

Glasses 18% Jewelry 16% Other 45%

B. Market Overview Broadly, six sectors where wearable technologies could prove to be disruptive have been identified[5,6]:

• Consumer/Jewelry (Watches): wearable technology will change how consumers view traditional watches, as their expectations for so-‐called “smart” watches are influenced by products such as the Apple Watch and Pebble Time. These types of wearables fall under the “lifestyle” category, epitomized by wearables that are worn to perform a specific function that enhances an aspect of the user’s lifestyle, generally without having more detailed or customizable functionality. Such devices include notification jewelry and smart clothing that uses location-‐based or other contextual information to change its appearance.

Apparel: Wearables will accelerate an already strong retail trend by imbuing apparel with


sensors so that clothing will be able to provide real-‐time feedback on comfort, fit, style etc. In addition, virtual and augmented reality devices that are based on the availability of content to be consumed while the device is worn are now emerging for a wide variety of use-‐cases ranging from video eye wear (smart goggles and wearable cameras) that enable users to “consume” a retail product in their own homes before they actually purchase it, to augmented or virtual reality headsets (such as the Oculus Rift and the Microsoft HoloLens) that enable them to engage with stores in a completely new way.

Payments: Apple’s ApplePay payment system, as adopted in the Apple Watch, makes mobile electronic payments even easier to use, generating intense competition for others to follow suit. Other “wearable” payment systems include Google Wallet, Samsung Pay, and the CurrentC standard supported by Walmart, CVS, Rite-‐Aid and others. These devices perform a variety of different computational functions generally (but not necessarily) relayed through a tethered smartphone. Due to the variety of different wearable form-‐factors that have evolved to service specific purposes, multi-‐functional devices are generally limited to smart phones or smart watches, into which payments functionality can be easily integrated using NFC, Bluetooth, or other low-‐energy radios.

Retail: Enormous “e-‐tailers” such as Alibaba Group Holding Ltd, Amazon Corp, Baidu Inc and eBay are working with suppliers of mobile “beacon” technology (including iBeacon from Apple) to equip stores and malls with technology that improve the customer experience by interacting with wearable and mobile devices and provide rich real-‐time data analytics that personalize offers to consumers. Other applications in retail include augmented reality (using either a smartphone or headset to “layer” virtual elements onto the existing physical landscape), or full virtual reality (using next-‐generation headsets by vendors such as Facebook/Oculus, Sony, Microsoft and others) to enable a completely immersive digital retail experience. One of the “holy grails” in retail marketing is the “Omnichannel Experience”, the capability whereby, regardless of channel or device, consumers can engage with a company in a physical store, on an online website or mobile app, through a catalog, or through social media with a seamless experience. Wearable devices that can communicate a user’s person information to a store go a long way to having the store “respond” to the customer in a highly personalized, targeted manner.

Healthcare: Wearable devices will have a profound impact on healthcare by monitoring

patient passively, actively suggesting wellness strategies, and providing patient diaries and other continuously monitored information that can improve clinical studies and other activities. In addition, system inefficiencies in the delivery of medical care will be addressed by tracking patient and provider workflow, follow-‐up, and reminders. (We review the healthcare opportunity in more detail in the Case Study, (E) below.) Wearables may be used by consumers to monitor medical conditions, to aid in the administration of medical aid (by either the consumer themselves e.g. self-‐administered insulin for diabetics), or by a healthcare professional (such as a wearable ECG monitor).


They may also include smart clothing (e.g. an undershirt that could monitor for atrial fibrillation) to smart sheets (in hospitals) that could monitor vital signs at night-‐time in a non-‐invasive manner. One category of intense interest is non-‐invasive (no blood-‐stick) continuous glucose monitoring for diabetics and others. Examples of health and wellness wearables include those that are worn to enable quantification of user’s routine or fitness activities, such as pedometers, mobility and heart-‐rate trackers. These include clip-‐on or wristband activity trackers, as well as clothing that monitors biometric data, such as the Samsung Gear Fit, Razer Nabu, Jawbone Up, FitBit and Acer Liquid Leap that also offer notification services, but are still primarily considered fitness devices.

Industrials/Military: Wearables will be a catalyst offering consumers a gateway into the Internet of Things (IoT) – for instance allowing unique products to emerge for the smart home, smart community, and smart workplace. Wearable devices will also enable seamless interaction between consumers and their “built” environment, optimizing for factors such as transportation, weather, work or leisure activities, and the like. Lastly, wearables can be extremely effective on the factory floor or the stock-‐room, ensuring workers follow appropriate Standard Operating Procedures (SOPs), manufacturing processes, on-‐the-‐spot training, as well as certification and licensing for Occupational Safety and Health Administration (OSHA).

The military are at the cutting edge of wearable technology, with many developments in the way of object and facial recognition hardware. In addition, the military is pioneering in the use of technologies such as exoskeletons (augmented wearables), robotics and the intersection between individual and group (team) wearable technology. Other augmenting wearable tools (for instance, infrared “night-‐vision” goggles are already standard operating practice in many militaries) will find use and be made robust under battlefield conditions before being transferred to broader consumer use.

• Enterprise Wearables: Enterprise wearables are app-‐enabled smart devices that perform

tasks in a business context. Exactly what that task is will vary depending on the industry in question, but many have shown a preference for smart glasses, from industries as diverse as logistics and warehousing to healthcare and surgery. Other examples of enterprise wearables include high-‐capacity strap-‐on tablets (e.g. for airline pilots or others who need to access manuals and other documents), or for those in the energy or construction industries. Another application is performing real-‐time quality audits in manufacturing processes, based on feedback from wearable devices and sensors.

Wearables may be organized into a technology hierarchy, with consumer wearables being the largest sub-‐category:


Figure 2 – Hierarchy of Smart Wearable Device Categories

IDTechX has conducted a survey into wearable data[8] and identified transportation and health data as the top-‐two data-‐streams that consumers identify as having value emanating from wearables. Interestingly, security (secure identification) and payments are the next two categories:

Figure 3 – Interest in Wearable Functionality (IDTechX, 2015)

C. Wearables and the Internet of Things

The Internet of Things broadly refers to the networking of physical objects through the use of embedded sensors, actuators, and other devices that can collect or transmit information about the objects. The data amassed from these devices can then be analyzed to optimize products, services, and operations. Perhaps one of the earliest and best-‐known applications of such technology has been in the area of energy efficiency: sensors deployed across the electricity grid can help utilities remotely monitor energy usage and adjust generation and distribution flows to account for peak times and downtimes. But applications are also being introduced in a number of other industries. Some insurance companies, for example, now offer plans that require drivers to install a sensor in their cars, allowing insurers to base premiums on actual driving behavior rather than projections. Physicians can use the information collected from wireless sensors in their patients’ homes to improve their management of chronic diseases. Wearables offer consumer an entrée into the Internet of Things, by providing a viewpoint and interface for individuals to interact and modify with the “designed” (or “built”) environment.

In IDTechX report on sensors, wearable and data-‐streams, they have identified five different sensor types as being of strong interest to manufacturers in the IoT space. These include stretch and pressure sensors, as well as chemical, optical and biopotential sensors. This give us some idea of manufacturer’s expectations of these sensor types into “smart” clothing, jewelry, watches and other wearable-‐types, as well as embedding these sensors into the environment so they can respond to passers-‐by on the ambient conditions via their own wearable devices:

Figure 4 -‐ Cumulative Annual Growth Rate (CAGR) of various sensor types – IDTechX, 2015


Tiny sensors and actuators, proliferating at astounding rates, are expected to explode in number over the next decade, potentially linking over 50 billion physical entities as costs plummet and networks become more pervasive. Companies are starting to use such technologies to run complex operations, so that systems make autonomous decisions based on data the sensors report. Smart networks now use sensors to monitor vehicle flows and reprogram traffic signals accordingly or to confirm whether repairs have been made effectively in electric-‐power grids. These technologies are also leading to what’s known as the “quantified self” movement, allowing people to become highly involved with their health and wellness by using devices that monitor blood pressure and activity, and sleep patterns. Leading-‐edge ingestible sensors take this approach further, relaying information via smartphones to physicians from within the body (e.g. on the rate of uptake of drugs in the digestive system), thereby providing new opportunities to manage health and disease.

D. Wearables in Healthcare

Technology is opening new opportunities to contain rising health-‐care costs and improve access. Mobile notification systems can now alert clinics to dispatch a nurse or other allied healthcare professional. Wearables have an opportunity to revolutionize health and wellness care by providing seamless daily tracking of vital signs enabling earlier intervention, better prevention, and the ability to recognize and understand long-‐term patterns. Already in China, a public–private partnership created a cardiovascular-‐monitoring system that allows patients to self-‐administer electrocardiograms and transmit data to specialists in Beijing, who can suggest treatments by phone. At New York’s Mount Sinai Hospital, a venture with General Electric uses smart tags to track the flow of hundreds of patients, treatments, and medical assets in real time. The hospital estimates it could potentially treat 10,000 more patients each year as a result and generate $120 million in savings and revenues over several years.

As with many other industries, consumers in the healthcare sector are becoming more informed, empowered, and demanding. The vast majority of connected patients are using an array of digital tools to take control of the healthcare services that they access and purchase: already more than 70 percent of patients who are online in the United States use the Internet to find healthcare information, and more than 40 percent of have diagnosed their condition through online research before having it confirmed by a physician.

Figure 5 – Examples of Wearables in Healthcare.

The more that healthcare data becomes digitally accessible and monitorable via wearable devices, the more patients will use it to weigh the value of cost-‐effective prevention versus expensive healthcare treatments. This is particularly true in the United States, where patients pay a greater percentage of the cost of their drug therapies (25 percent is not unusual) than they do for other healthcare expenses such as inpatient services. Not surprisingly, these consumers


are demanding more information so they can apply the same cost-‐benefit analysis and research techniques they use to purchase cars or phones when they purchase healthcare; they are also making more informed, rational choices about where they put their money.

If healthcare follows the path of other consumer-‐oriented sectors that compete on data analytics, such as high-‐tech and retailing, winners and losers will be determined in part by who makes the best use of the data available and the strongest case for change. Government agencies across the globe are leading the way, and entrepreneurs are taking advantage of government’s interest in facilitating data exchange. However, pharmaceutical and medical-‐device companies have largely stayed on the sidelines, leaving others to dictate how information related to their products is used. Pharmaceutical companies have used data generated from long-‐running randomized controlled trials as the gold standard to demonstrate the efficacy and safety of products and gain regulatory approval or formulary listings. Yet many of their customers—insurers, increasingly providers, and even patients—are looking for real-‐world evidence. Both access to and quality of real-‐world data will increase exponentially thanks to wearable healthcare monitors. As data integration and analyses take precedence over data ownership or sponsorship, competitive advantage will rest with those organizations that innovatively use wearable data sources to uncover clinical insights. Meeting long-‐standing requirements regarding clinical-‐trial data continues to be necessary for government approval of new drugs, but it is no longer enough for other stakeholders when more and more targeted and timely data are available.

A recent study by Juniper Research (2014) has revealed that, in addition to health/fitness trackers worn around the wrist (e.g. Fitbit, Garmin, Jawbone, Apple Watch), consumers are also increasingly interested in wearable technology that is embedded into other articles of clothing:

Figure 6 – Desired healthcare wearable types (Juniper Research, 2014) The results of this survey indicate an expectation and willingness by consumers to try various forms of wearable technology if it will result in better health outcomes. The continuing rising cost of treatments means more and more consumers are seeking the route of prevention, assisted by the appropriate wearable technology that can “nudge” them into the desired behavior.

(i) Healthcare in a wearable-‐centric world

Healthcare is moving from a focus on addressing point-‐in-‐time issues toward coordinated, continuous health management, monitored by a combination of wearable devices, in-‐home sensors, and mobile technologies that can serve as 'hubs' for personalized information. The need


to provide ongoing management of chronic diseases and to predict and prevent severe episodes and events offers new opportunities and places new communication demands on every element of the mobile/wearable infrastructure. In addition, targeted sensor technology allows continuous collection of physiological data (for example, electroencephalograph, electrocardiogram, movement, heart rate, and glucose levels), which will vastly improve disease management by providing real-‐time status reports that can alert providers to impending patient problems. When scaled broadly, these innovations also may reduce the need for many courses of treatment. Some innovators already are combining technology-‐enabled monitoring and insight to deliver new solutions to patients. For example, inserting GPS technology into inhalers to identify environmental triggers (that cause asthma sufferers to use the device) allows providers to alert consumers who can then head off severe attacks.

There are now thousands of healthcare-‐related apps available from the US Apple App Store, but only a fraction are patient-‐facing with genuine health content, according to a new study from the IMS Institute for Healthcare Informatics. The recent announcement of the Apple Watch and the company’s release of its HealthKit and ResearchKit developer tool are likely to increase the variety of functions and number of health-‐related apps that are available. Google Glass is the most high-‐profile wearable that has been tested for healthcare applications— surgeons are using it to facilitate and record operations, office physicians are reducing interruptions in patient engagement by retrieving and sending information to electronic medical records through the device, and emergency-‐medicine physicians are getting specialist consults by transmitting video or images taken by Glass. In the future these and other wearables will play an ever-‐increasing role in moderating health and wellness outside of the clinic.

(ii) Wearables and home-‐health

The full potential of the technology-‐enabled home health care market remains to be tapped. In the United States, home-‐health care accounts for about 3 percent ($68 billion a year) of national health spending. The market is increasing by about 9 percent annually,

solid but hardly booming growth, especially since labor (mainly nurses and aides) accounts for about two-‐thirds of the expenditure, while home-‐monitoring technology represents a small fraction of it. Wearable technology holds a central role in expanding the market for home health care. Historically, most infrastructure and equipment consisted of durable medical products: walkers, wheelchairs, wall rungs, safety rugs, and the like. That infrastructure enabled basic home care but could not substitute for the more sophisticated capabilities of specialized care settings, such as on-‐call nursing in long-‐term-‐care facilities. In recent years, however, new home care technologies—Internet-‐enabled home monitors, apps for mobile health, and telemedicine—are bringing aspects of advanced care into patients’ homes. These technologies are finding a place in all parts of the globe.


The most important value offered by wearable and sensor-‐enabled home care is preventing or delaying the shift of patients to acute-‐ or long-‐term-‐care settings. The medical conditions that can be addressed successfully by technology-‐enabled home care meet three criteria:

They are chronic: persisting for years rather than days or months

They can be prevented or addressed by protocols: repeatable and standardized step-‐ by-‐step instructions executed by non-‐physicians.

They are non-‐intensive: there is no requirement for round-‐the-‐clock attention or human monitoring.

Diabetes, hypertension, congestive heart failure, chronic obstructive pulmonary disease (COPD), and fracture prevention are examples of high-‐prevalence medical conditions that satisfy these criteria. They are important disease targets for current and future technological advances in home care.

E. Summary The advent of wearable technology, dependent on cheap wireless sensors, ubiquitous compute engines, and novel user interfaces, ushers in a huge new market opportunity. The design and innovation of business models for this market is a major challenge for entrants into the wearables market. However there is no doubt that “blue-‐oceans” exist for novel wearable products, and that, suitably marketed, they can be hugely successful. Critical to the success of wearables will be ensuring that their wearable products are designed for long-‐term behavior change, as only these will succeed and scale across groups, communities and entire populations. In the long-‐run, the success of wearables will be less the impact they have on individuals, than the role they play in co-‐ordinating communities. Nowhere is this more apparent than in health-‐care. Encouraging old and young alike to be more active, to eat and sleep better, and to be more pro-‐active in monitoring and intervening in their health will drive improved health outcomes and help bend the healthcare cost-‐curve. “Nudging” communities, cities and even states into smarter behavior, coupled with augmented reality and robotics, will finally give rise to the 21st Century ecosystem: an environment with virtually limitless upside for human accomplishment. F. References


1. M. Weiser: The Computer for the 21st Century. Scientific American, vol. 265 (1991), no. 9, pp. 66–75

2. Ball, Guy; Flamm, Bruce. "The History of Pocket Electronic Calculators". 3. Alexandra Le Tellier Tech Togs July 22, 2009 Technology Brand X/ LA Times. 4. And you thought the Jawbone Headset was stylish, LA Times blog. 5. “Smart market wearables to generate $53BN hardware revenues by 2019” Juniper

Research, Sept. 2014. 6. “Wearable Technology A Potential $1.6 Trillion Business” Morgan Stanley Research, Nov

2014 7. “Are Wearables a Disruptive Technology?” Forrester Research James McQuivey, April

2015 8. “Wearable Technology 2015-‐2025: Technologies, Markets”, IDtechX Report, February

2015, Peter Harrop, James Hayward, Raghu Das and Glyn Holland.

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