Is wearable technology just for geeks?January 3, 2014: 4:50 PM ET
Wearable technology is supposed to be the next hot thing but has barely made a dent in the consumer market.
FORTUNE -- Wearable computers may be a market worth as much as $6 billion by 2016, but for now it's a category with more hype and little substance.
Early users of Google (GOOG) Glass device, often agree on one thing: It's got great potential but needs a lot of work. Voice recognition for commands is still buggy, and the industrial design resembles a Star Trek prop. Meanwhile, attempts at other wearable accessories like the Samsung Galaxy Gear smartwatch haven't been well-received. The devices are still pretty limited in terms of what users can do, and in Samsung's case, the device only works with a small number of phones -- all Samsung (SSNLF), of course. And, outside the fitness market, few devices are priced low enough to be competitive. (Google Glass could retail for between $250 and $600 when it arrives later this year, according to the New York Times.)
Anthony Wood, CEO of Roku, is less than enthusiastic about the hardware category. "Watches in particular strike me as being particularly geeky -- something I'd have wanted to play with as a kid," he says.
Forrester Research analyst JP Gownder says wearables are experiencing a "hype bubble," comparing the market to the Internet of 1999. "It took many failed experiments like Pets.com before we found real business models associated with the Internet," says Gownder. He says the same goes for wearable computing companies. "Most of them don't have good business models, and most consumers don't know why they'd be buying these things."
Where wearables aren't scarce is fitness. No less than 10 different vendors, including Nike (NKE), Fitbit, and Jawbone have wristbands that track different activities like running and sleep. "In fitness, 2013 was kind of a mess," admits Gownder, who argues their business-to-consumer (B2C) approach is a small, limited market. "It's people who are fitness fanatics, people who are overweight, and people who are quantified selfers," referring to the trend of people obsessively tracking their steps, sleep, and other movements.
But perhaps it's the B2C part that's the ill fit? Box CEO Aaron Levie, underwhelmed when he tried Glass late last year, argues the marketing around it is all wrong. He thinks it should be repositioned for the industrial or enterprise worlds. Says Levie: "Think about what very low-cost, hands-free computing can do for the health care industry, or what it could do for production, for somebody who's doing repairs of engines."
Maybe enough of those geeks could make the view of Google Glass a little more rose-colored.