Some recent conversations have set me thinking that the emergence of wearable devices may be the missing part of a value services adoption jigsaw. A number of sectors that have been highlighted by analysts to “rising star” status, only to experience far from stellar results as they failed to achieve the traction required to drive both mass volume adoption and value.
The first conversation concerned the growing maturity of the M2M business model. This reflected a major carrier who last year set 2 goal metrics for their M2M business – number of connections and margin. The connections metric was missed by a factor of 10, but the margin goal was achieved.
The second conversation was with an M2M supplier who has invested €20 million in positioning themselves for the emergence of mHealth. They have decided that the channel to the market is not through the normal M2M carrier / integrator channels, but by Doctors selling to Doctors. The funding is being used to design and build and certify both the mHealth devices and also a supporting service structure to process and action the data collected.
Both conversations reflect the emergence of sustainable business models after initial explosive growth forecasts.
So how can Wearables impact these models?
The answer could be in the Form, Fit & Function equation that devices have to get right to drive widespread adoption. Once the Form & Fit needs have been addressed by brand and design partnerships, Function is going to need ongoing background services which in turn will create the opportunity for ongoing value add revenues. These will increase both the attractiveness and stickiness of the wearable products.
Health & Fitness is forecast as a leading sector to drive the significant growth in Wearables, but the devices featured and generally retail outlet devices gathering data for personal use and highly discretionary to the consumer. The consumer wearable fitness devices will have to have Form & Fit to succeed in the market – consumers must want to wear them, even as obvious fashion statements, but will have to rise to the challenge of combining this with Function that can meet the regulatory requirements for mHealth services to access sustainable value.
The mHealth supporting structure provides a valuable ongoing revenue stream based on a solid Functional business model, but will need attractive devices to scale into a large market opportunity.
The future challenge for value services will be to exploit possible linkages and partnerships to scale up the sustainable business models developing for the forecast IoT connection volumes. The possibility of accessing a large discretionary spend market could enhance the M2M / IOT connections vs margin balance equation through the attached value proposition.
The final conversation showed how Wearables could provide some lateral thinking to current adoption efforts. Mobile payment adoption in developed countries has been looking for ways to actively engage consumers. Paywitheaze showed me handsfree payment using Google Glass with 2 nods to approve a payment. A voice command is required to start a payment process and avoid spurious payments being made. This sparked a discussion over how secure a voice print would be in minimising fraud in the payment operation.
I am struggling to remember when I was last in a situation where I couldn’t put items down to complete a payment using normal methods, but an interesting example of how Wearables might provide the necessary lateral enabler to drive promised adoption. The challenge will be picking and refining the right ones.
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