A survey by MarketsAndMarkets suggests that the global wearables market could grow to £41.5b by 2022, at a CAGR of 15.51% between 2016 and 2022.
This is despite unimpressive growth in Q4 of 2106, which Strategy Analytics assessed at just 1% year-on-year, with shipments hitting 8.2 million units in a market dominated by Apple and Samsung.
But MarketsAndMarkets says that wearables have not yet hit their key market, which will be payment technology. At the moment, the key application for wearables is in health and fitness, and this is thought to have limited potential.
The smart watch market is predicted to rise from 41% to 52.1% of the market share by 2020, with wristbands following closely behind, but it’s thought that the current dominance of manufacturers such as Fitbit, centred entirely on fitness tracking, will only take wearables so far; 33% of consumers stop using their fitness tracking device after just six months, increasing to 50% after twelve months, partly a reflection of the limited functionality of single application wristbands.
The killer app for wearables may be contactless payment, where a smart watch or wristband has a big advantage over a mobile phone - the user doesn’t have to take it out of a pocket or bag to employ it.
The wearables industry also anticipates expansion into parallel sectors, such as mobile transport ticketing, though there are security, physical and interoperability requirements here which create complexity.
Yorkshire technology company Kiroco Technology has secured a number of patents to integrate NFC chips into wearables, specifically jewellery that communicates with smartphones and chip readers.
Kiroco is now working to develop applications including contactless payments, activated by Near Field Communication (NFC) technology held within a bracelet, key fob or other piece of jewellery.
Nigel Townsend, who has been leading the project since 2012, said ‘It has been a long and challenging journey to get to this point but it has been worth every moment and we now have patented technology within jewellery that can be used by any business wanting to enter one of the fastest-growing tech sectors.’
Kiroco Technology uses the same security as online banking systems. It allows multi factor authentication that only works by pairing jewellery with its nominated smartphone or device, so data is safe, even if the phone or jewellery is lost.
The company is also working in the medical sector with applications that allow patients with medical conditions or life-threatening allergies to store important medical information in a simple wearable, and is also looking at the banking, retail, resort and entertainment markets.