Much of the past year has been full of headlines talking of the rise of the wearable and its impending impact on both the consumer and enterprise market, with this month seeing the announcement of the latest generation of smartwatches from Samsung and Motorola as well as updates being made to the Apple Watch. Despite the immense benefits to be had from the use of wearable devices in line-of-business applications, adoption rates have been low when compared to other mobile form factors like handheld devices and tablets. Much of this is due to the fact that the value proposition is less well-defined as most devices within this category function as a complementary rather than as a stand-alone device. As a result, ROI can be harder to define, making the arguments in favor of investment less forceful than with other form factors.
Nevertheless, the spectrum of wearable devices and use cases continues to expand beyond the traditionally niche deployments of the past; previous generations of wearables, which span back decades, have been extremely industry- and task specific given the technological limitations of the time and the relative lack of ergonomic design. Within the last 2-3 years, however, there has been a renaissance of interest in wearables that has been fostered by initiatives from tech giants like Apple, Google, Microsoft, and Samsung. The introduction of wearable-specific operating systems like Android Wear, Tizen, and watchOS have provided the enterprise with a new ecosystem to build upon the advances being made in display technology, voice-operation solutions and contextual information, while devices like Google Glass and Microsoft’s Hololens prototype show the potential of heads-up displays (HUDs) to bring augmented reality and holograms out of the realm of science fiction and into real-world applications. The resulting media hype surrounding these advances has helped to foster a notable uptick in interest from the enterprise. The greatest obstacle to higher adoption rates, however, is the ability to move beyond the promise of improved productivity towards concrete use cases that provide tangible value. Companies within the postal and courier sector as well as warehousing are experimenting with heads-up displays and augmented reality to improve worker productivity through a number of pilot programs that have included Google Glass and the Vuzix M100, which have been well-received. Despite the excitement surrounding such programs, however, technological limitations such as battery life and durability remain considerable obstacles to widespread deployment.
For consumer-grade devices, enterprise applications are growing but remain limited in their reach, particularly as a large portion of the market belongs to tracking devices that are meant for health and fitness applications. Nevertheless, smartwatches are slowing making their way into the mainstream, albeit at a slower rate than many of the manufacturers would like. Even trend-setting Apple appears unable to work its magic to stir demand quite in the way that it has for its previous devices – particularly the iPhone, the latest iteration of which has shattered records and skyrocketed Apple’s revenues to new heights in 2014. By contrast, the public’s reception of the Apple Watch has been notably cooler, with much of the media calling into question the need for such a device on the market. The seeming lack of a “killer app” has limited the enterprise value proposition beyond a more streamlined means of communication and notification, although there is a slowly growing ecosystem for applications for the enterprise. Companies like Salesforce and Good Technology have been at the forefront of development, with the former’s launch of Salesforce Wear in the summer of 2014 to enable developers to create enterprise applications specifically for HUDs and smartwatches. Meanwhile, Good Technology has sought to incorporate smartwatches into its enterprise mobility management solutions as a means of providing mobile identity and access management features including two-factor authentication and access control through its Good Work solution.
The restricting factors for growth in the wearable markets remain firmly centered on the issue of applicability. On the end-user side, this manifests as uncertainty of the specific value proposition that wearables provide. Lack of a clear ROI presents a considerable hurdle that OEMs who are manufacturing non-industrial wearables will need to overcome, especially if the form factor is to gain traction in an enterprise setting. In order to gain widespread acceptance, the new generation of wearable devices will need to transcend the current consumer fad to demonstrate material improvements to an organization’s workflow. The ability to work hands-free in labor intensive workflows and real-time communication capabilities for technically complex situations for equipment/site inspections and remote diagnostics already provide a clear and strong value proposition. However, in industry verticals that can benefit from wearable devices, that proposition is less obvious. As a result, the key to higher adoption rates across these verticals will require a strong application ecosystem that is tailored to the unique requirements of a wearable device – namely, limited display and UI, as well as faster interaction times to relay and input information.
Despite the obstacles, there is still reason to believe that the rise of consumer wearable devices and their peripheral and application ecosystem will help pave the way for a new generation of enterprise-oriented and industry-specific devices by helping to normalize the form factor and establish a broader base for applications. Although consumer wearables currently offer limited utility within an enterprise setting, they nevertheless help to demonstrate the value proposition of the form factor and serve as a proof of concept in the capabilities of wearable in a broader environment that transcends ring scanners and fitness sensors. If the current attention given to smartwatches and their ilk can evolve beyond a fad and the devices gain widespread appeal, the effect on markets in the fostering of a sustainable ecosystem of OS and application development could be similar to that of the rise of smartphones and tablets in a LOB setting, presenting both a wealth of opportunities and challenges to traditional OEMs.
Kathryn Nassberg is a Research Analyst for Enterprise Mobility and Connected Devices.