The Future of Wearable Technology by Gail Kelly

THE FUTURE OF WEARABLE TECHNOLOGY

What is the future of wearable technology as it relates to the health and fitness industries? Gail Kelly, Julia Banasikowski, Kristin Brennan, Adam Soisson, Karie Wolf

Table of Contents Abstract

Executive Summary

Introduction

Current Assessment

Key Terminology

History of Wearable Technology

Controversies and Uncertainties

Stakeholders

Drivers of Change

Constraints of Change

Evidence-Based Baseline Forecast

Scenario Analysis and Business Implications

Expected Future Scenario

Alternative Scenario: Growth

Alternative Scenario: Constraint

Alternative Scenario: Collapse

Alternative Scenario: Transformation

Alternative Scenario: Wildcard

Conclusion

Works Cited

ABSTRACT This report explores the future of wearable technology and its growth in the health and fitness sectors. It examines current products popular among consumers and the trends that may lead to their expansion and increased adoption. Based on current data, growing industry partnerships, and low barriers to entry, wearable technology in health and fitness will continue to become more and more popular, especially among upper socioeconomic classes in developed countries, and will expand beyond the now fashionable fitness wristbands. This growing popularity will have the potential to cause shifts in the job market, change insurance plan structures, and lead to eventual adoption by lower socioeconomic classes. This report also intends to determine the potential implications on business and society that wearable technology may have in the future; therefore, the future of wearable technology in health and fitness must be thoroughly researched. In order to conduct a thorough examination into the future of wearable technology in health and fitness, the drivers and constraints of change as well as the uncertainties that surround the future of wearable technology must be considered. Because the future of wearable technology cannot be definitively determined, several potential scenarios are developed to ensure that all angles of the issue can be analyzed. By looking into and preparing for each possible future scenario, leaders in business

can gain insight on and prepare for the changes that the future of wearable technology may bring to their respective organizations.

A video by experts at Intel on the future of wearables

EXECUTIVE SUMMARY How will the rise of wearable technology influence the future of health and fitness? Consideration of the new technology from a systems perspective highlights several areas in which wearable technology’s impact is increasing and will continue to increase exponentially. Wearable technology will initially be a luxury product category reserved for the “innovators,” or those who have high social status, financial liquidity, and the willingness to take risks. Demographically, wearable technology will have a dramatic effect on the already increasing greying population. With new advancements in wearable tech that include the selfmonitoring of illnesses and vital signs, mortality rates have the potential to further decrease. Breakthroughs in wearable technology will also have the potential to mold a healthier and more active younger generation, given many of the new wearable technologies used for fitness encourage wearers to reach activity goals on a daily basis. The economic impact of wearable technology in the health and fitness industries is far-reaching. Wearable technology in its prime will be categorized as a discontinuous innovation, and this means that creative disruption will likely follow. Economic loss will likely be experienced in segments that are not as relevant as they once were as common occurrences such as medical check-ups may become obsolete. Wearable technology will generate economic growth by encouraging the creation of industry partnerships that had never been considered. The

sports industry has shown interest in partnerships with wearable tech producers and is already spending money on researching the ways in which uniforms can be altered to better serve both players and fans. Partnerships with sports are just the beginning; health insurance companies, hospitals, and fashion firms are just three more areas in which a partnership with wearable technology could grow. New partnerships will help to determine the potential impact of the wearable technology market as a whole, predicted to reach a net worth of $30 to $50 billion dollars within the next 3-5 years (Pitzer). Several drivers and constraints of change will influence the growth of wearable technology in the health and fitness sector. The growing aging world population is one driver of change that has the potential to be particularly impactful. Consumer preferences for increased connectivity and constant mobile communication will also serve as important drivers of change. Constraints, such as government regulation, scarcity of resources, and consumer skepticism or fear could also be extremely influential and stunt the growth of the wearable industry. Overall, six scenarios can be envisioned that show possible futures for wearable technology in fitness. These scenarios involve the expected future, growth, constraints, collapse, transformation, and a wildcard. While our expected future of slow adoption over the next 10 years is most likely, a

growth scenario in which wearable technology adoption quickly escalates could also be possible. Conversely, in a collapse scenario, the industry may not provide truly useful products and eventually fail. Constraint scenarios in which scarcity of resources limit production, or a transformation scenario in which adoption occurs in an unexpected way are also possible. Finally, in the least expected wildcard scenario, an accident or dangerous malfunction may occur that leads to negative publicity and the failure of the industry as a whole. Consideration of the six envisioned scenarios of the future of wearable technology brings several business and societal implications to light. Wearable technology in fitness and health is expected to become more than a fad; current trend projections show that the use of wearable technology in the health and fitness sectors will only increase as time passes. This increase has the potential to create more efficient health practices and impact the rates of health insurance for employees of major corporations. Businesses in healthcare will fall behind if they ignore the increasing development and popularity of wearable technology. That said, all scenarios, including a complete collapse of the industry or a â&#x20AC;&#x153;wildcardâ&#x20AC;? that leads to lawsuits, should be thoroughly considered in order to prepare businesses for all possible futures. A complete and detailed plan should be established for handling each potential future for wearable technology in the health and fitness sectors to enable strong growth in the industry.

Common offerings on the market

INTRODUCTION At present, trends show that wearable technology will have a widespread impact across a diverse set of industries in the next several years. Wearable technology is expected to continuing growing into a multibillion dollar industry with experts forecasting an industry worth of $18 billion to $50 billion by 2018 (McCracken). In the health and fitness sectors alone, shipments of wearable products are expected to reach a combined 65.23 million by the end of 2014 (Statista). The scope of this project examines the growth of various types of wearable devices, including activity trackers and monitoring devices, as they relate to the systems of the fitness and healthcare industries. Wearable technology will become increasingly important in these industries as issues of healthcare provisions and the aging populations continue to be serious drivers of change facing the societies of several more affluent countries including the United States and several areas of Europe and Asia. This project will examine current trends in wearable technology and forecasts of how they will grow. With data connected to healthcare, population, and the increased interest in ubiquitous computing and constant connectivity, it will provide support for our expected scenario. The project then scans

Some information on capital raised and investments in new wearables in 2013

various uncertainties to provide potential alternative futures in the industry and what they may mean for businesses. Wearable technology may initially be a product for â&#x20AC;&#x153;innovators,â&#x20AC;? or more affluent, educated segments of the population, but its impact will become far-reaching as it will create new opportunities for manufacturers, lead to new collaborations between industries, and change the paradigm of human health. Wearable devices will affect demographics, societies, and technologies as it continues to grow.

Current Assessment KEY TERMINOLOGY Before continuing with the discussion of wearable technology it is important to examine the terminology associated with the industry. Research agencies such as IHS and other experts in the field classify wearable technology as products that are worn by a consumer for extended periods of time and significantly enhance the user’s experience as a result of the product’s usage (IHS). Many “Smart” products are a part of this overall category of wearable technology. Wearable devices and “Smart” products must have “advanced circuitry, wireless connectivity, and independent processing capabilities” (IHS). Within the fitness industry, wearable devices generally monitor activities to provide feedback to the consumer during exercise or movement. Currently, the majority of fitness-related wearables record elements such as heart rate, energy levels, calories burned, steps taken, body temperature, and speed and include devices such as activity trackers and clothing items that are made from e-textiles or include a microchip. Fitness wearables would include items such as the FitBit, the Jawbone Up, or the Ralph Lauren Polo Tech Shirt. Intelligent or “smart” clothing is an important part of the wearable technology in the fitness sector. Smart clothing “is intelligent when it adds something” unclothing-like to a garment without “compromising

any traditional characteristics such as washability or wearabilityâ&#x20AC;? (McCann & Bryson, 6). With regards to the healthcare and medical industries, wearable technology focuses on devices that are used to monitor vital signs, augment senses, or as aids in medical procedures. Medical wearables, as defined in this assessment, generally include items used in conjunction with a doctor or medical care providerâ&#x20AC;&#x2122;s guidance. Monitoring devices such as connected heart monitors or pacemakers are a part of this category but devices worn by doctors to assist with medical procedures may be included in this category as well.

The Polo tech shirt, available in 2015, featuring a chip by Canadian firm OMsignal

HISTORY OF WEARABLE TECHNOLOGY The rise of wearable technology has largely correlated with the proliferation of ubiquitous computing as it has become more widespread since the 1980s. Ubiquitous computing is the concept in which computing is made to appear everywhere seamlessly to the point where it recedes into the background of our lives (Weiser). This growing rate of electronics’ penetration into everyday life led to the increased development of new areas of crossover electronics research in physiology, medicine, communications, and other sectors. Among consumers, the calculator watch introduced by Pulsar and Hewlett-Packard in 1975 is generally considered to be one of the first widespread wearable gadgets, though several other more “intelligent” products helped jumpstart wearable technology’s development. Experts such as J. Bryson and David McCan, would cite Thorp and Shannon’s 1961 “cigarette pack-sized” roulette wheel predictor as the first wearable computer (McCann & Bryson, 6). In the early 1980s photographer Steve Mann then took wearable technologies in a different direction as he built a wearable system of photography equipment (McCann & Bryson, 6). Mann then went to MIT where he helped grow the MIT Wearables Laboratory that advanced much of the initial theoretical and practical research into wearable technology in the 1990s (McCann & Bryson, 7).

Shannon & Thorpe's wearable Roulette Wheel Predictor

The evolution of some of Steve Mann's first wearable innovations

Once wearable technology had gained enough interest, companies began to start seeing commercial opportunities within the sector. Computer Products & Services Incorporated (CPSI) changed its name to Xybernaut and set out with the intention to make and sell products for wearable computing (McCann & Bryson, 8). In 1996 Xybernaut launched the “Mobile Assistant” which could use custom programs and interfaces for mechanics and technicians in the military, commercial sectors, and healthcare (McCann & Bryson 9). Although the Mobile Assistant had several versions and its variety of battery issues early on, Xybernaut had proved the commercial possibilities that company’s today are starting to utilize on a larger scale. Now, as major and popular developers, retailers, and designers have been collaborating to create new wearables, the devices are becoming more widespread and highly desirable. Large companies with high global brand familiarity are becoming involved in the wearable industry and are increasing consumer awareness of the products. The Apple Watch, with “conservative” expert forecasts from Piper Jaffray predicting sales of 10 million units in 2015, is currently one of the most widely recognized examples of a big business creating buzz in the wearables world (Hughes). Intel has also increased its participation in wearable technology with Microsoft soon to follow. As more and more mainstream and globally recognized brands create their own wearable innovations, consumer interest will increase, and the industry will continue to grow.

The Xybernaut Mobile Assistant IV released in 1999

The Apple Watch, to be released in 2015

Vendor Landscape for wearable technology in health and fitness

Vendor Landscape for wearable technology in healthcare

Some of the common wearable offerings being used today

CONTROVERSIES AND UNCERTAINTIES Although wearable technology has had a long history and gained strong momentum as of late, there are still some controversies and uncertainties that have the potential to affect widespread consumer adoption of wearable devices. One of the most significant controversies surrounding wearable technology involves concerns with constant surveillance and decreased privacy. Richard Tehrani, founder and Chairman of leading technology trade show ITEXPO, believes that companies will have to learn to “get past the potential privacy challenges” to be successful (Stanley). This, however, may be more difficult than it sounds for wearable tech companies. As of January 2014, data from global data privacy management company Truste showed that consumer online trust has hit a three year low (Bachman). Consumers that use the Internet or wifi-activated devices are responded that they are 74% more concerned about their privacy than they were last year, with 58% of consumers worried that companies will sell their personal data (Bachman). Privacy expert and Truste VP of Marketing Dave Deasy believes that brands “will suffer significant consequences down the road” if they can’t assure consumers early on that their private information is safe (Bachman). Producers of products such as VeriChip, a microchip used to maintain medical records and track the location of patients with conditions such as Alzheimer’s, will need to be wary of consumers

Consumer Primary concerns when using adds according to a TRUSTe survey

who fear having their locations tracked (Keller). Another issue confronting wearable technology producers in the health and fitness sectors involves devices that allow patients to self-monitor their vitals, current conditions, or lifetime illness. Devices such as the â&#x20AC;&#x153;wearable continuous infuserâ&#x20AC;? for patients with diabetes provide consumers with a strong authority over their own health problems, which could become problematic or even a liability issue for producers (Wentholt). Experts worry that not all patients possess 1) the abilities to correctly self-monitor health conditions and vital signs and 2) the dedication to self-monitoring consistently and accurately for these devices to be safe (Wentholt). Emergency health situations could emerge due to user error when patients who are not qualified to operate a self-monitoring device make a mistake. The threat of litigation targeting medical professionals may lead to an increase in fear of malpractice making wearable seem too risky to healthcare providers, diminishing adoption.

In a similar vein, wearable technology may face growth issues if patients simply do not want to rely on technological products for their healthcare. Many consumers, especially those of older generations, may prefer human resources when dealing with medical problems as they might be aware that they do not have the necessary knowledge to monitor their own illnesses. Routine doctor visits and nurses may then remain relevant, lowering the speed of adoption of wearables.

STAKEHOLDERS Within the health and fitness sectors, the growth of wearable technology will affect a variety of stakeholders including the FDA and other regulating entities, healthcare providers, sports leagues and athletes, patients, and retailers in general. While, the extent of these stakeholdersâ&#x20AC;&#x2122; influences and interest in the advancement of wearable devices for health and fitness varies, all will play some role in the industryâ&#x20AC;&#x2122;s growth as the products continue to develop. The Food and Drug Administration (FDA) and other governmental regulating bodies can have high influence in wearable technology but have not yet exhibited a great deal of high interest. As wearable technology becomes more widespread, however, the FDA may have to get more involved to ensure that wearable products are functioning safely for consumers. The FDA is already restructuring its approach to reviewing medical wearable

technology, “with more oversight directed to technology that represents high risk to patients” (Chandra and Steel). Wearable device producers will also need to be aware of certain government acts such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA) which has strict regulations in regards to data collections and electronic health care transactions associated with new technologies (Scott). Other government bodies that may seem peripheral to wearable technology in the health and fitness sectors may also hold high stakes in the industry. The Defense Advance Research Projects Agency (DARPA), an agency of the U.S Department of Defense, has become very involved in the wearable technology and possesses the influence to help the industry grow. Over the past 15 years DARPA has encouraged collaboration among industries such as technology and textiles to build new wearable systems. The agency has stated its willingness to devote “tens of millions of dollars” into its wearables programs (Merritt). In this respect, some governmental stakeholders such as DARPA could help the industry grow. Beyond regulating agencies, the relationship between the wearable technology stakeholders is a constructive one, meaning that the stakeholders are trying to work together to improve the efficiency of health and fitness. There are currently identified competitors for wearable technology outside of the industry itself and, as such, stakeholders have successfully entered collaborations that have positively impacted innovation.

This collaborative nature has created somewhat of a convergence of industries as different stakeholder groups are working together. Designers have been able to team up with tech companies and athletic brands, while athletes have been able to test out producersâ&#x20AC;&#x2122; new wearable devices. As companies begin working together more and more, stakeholders will have the benefit of utilizing the resources of several different billion dollar industries as they work to create new innovations, increasing the spread of wearable technology at a more rapid pace. Other specific important stakeholders who will be involved with the future of wearable technology include the doctors and healthcare providers that will recommend products and interpret the data collected by the devices. As medical professionals have specialized knowledge in regards to different health problems, they have the potential to have a high amount of influence in the development and adoption of wearable products (Davies). In the healthcare-doctorpatient realm of stakeholders, however, it has yet to be established who will bear the costs of new wearable devices. As these products become more common for analyzing patient health, health care providers and insurance companies will have to update cost plans based on wearable devices. If insurance companies decide not to pay for medical wearable devices, they have enough influence to push cost onto patients and could possibly stunt the overall growth of the industry. As wearables

continue to grow, healthcare providers will therefore be stakeholders with some of the highest influence and highest interest in the industry. Stakeholders in the sports industry such as sports retailers, athletes, and professional athletic leagues are also major stakeholders in the growth of wearable technology. Companies such as Jawbone, FitBit, and Under Armour have wearable devices either on the market or in production that may change the way we participate in sports. Athletes may decide to start using wearable fitness devices which may cause new sponsorships and lead to a growth in the industry. Sports leagues such as the NFL and NBA will have to decide what rules they wish to develop in association with these products which may affect the speed of widespread wearable adoption. Along with those in the sports industry, athletes, exercisers, and patients in general will also be some of the most influential stakeholders as users will serve as the ultimate verification for the value of health and fitness devices. If the products are not accessible or easy to use for these stakeholders then the industry may face some serious constraints and eventually fail.

DRIVERS OF CHANGE Wearable technology’s adoption will be affected by several drivers of change in relation to current trends in both consumer preferences and in demographics. One of the most apparent drivers may then be consumers’ desire for smaller and more physically convenient devices. The evolution of mobile devices and smart phones is the biggest indicator of this driver as they have become sleeker and more capable with each new model that is released. With this move towards “smaller is better” in mind, industry pundits have been predicting the death of the personal computer for years, but experts at Cisco disagree (Evans). The desire to always have a smartphone in our pockets shows that “the personal computer is not dying, but is becoming even more personal” (Evans). Intel executive Steve Holmes has shared similar positions believing “wearables will bring a unique value proposition…it’s about intimacy, immediacy, and persistence” (Edelson). This evolution of mobile phones into something that is better, smaller, and more accessible, therefore makes wearable technology a logical step for consumers as it will take constant connectivity one step further. This enhanced connectivity provided by personal computers and mobile devices also represents another trend that is driving change in the industry of wearable technology and can be seen in the growth of time spent on the internet. Although internet

usage does not directly show a preference for wearable technology in health and fitness, it does illustrate the increased consumer desire for digitalization of many parts of their lives such as work, communications, and entertainment. The data in Figure 1 shows the increase in internet usage since 2000, which not only highlights consumer preferences but also exemplifies the increased availability of internet access, which will be crucial for most connected wearable devices.

Figure 1

Similar to the desire for increased connectivity, consumer desire for faster communication and streaming of media represents another technological trend that acts as a driver of change for wearable technology. Faster and larger data plans from cell providers have allowed for quicker technological interactions and are reflective of convenience of mobile, wifi capable devices, which may transfer into for greater efficiency for wearable products. Data from Cisco in Figure 2 illustrates the growth in mobile data usage from 2008 to 2015. This upward trend is only expected to increase more, especially as consumers switch from 3G to 4G, and then 4G to 4K. Experts at 3G Americas believe these increases in data speeds have â&#x20AC;&#x153;shown us the power and potential of always-on, everyplace network connectivity and has ignited a massive wave of industry innovation that spans devices, applications, Internet integration, and new business models. Already used by hundreds of millions of people, mobile broadband connectivity is on the verge of becoming ubiquitous.â&#x20AC;? With larger data plans and wifi enabled/mobile devices becoming quick, easy, and more user friendly, consumers may feel more open to adopting new, connected, wearable innovations making mobile data growth a driver of change.

Figure 2

Demographically, the aging populations in affluent countries may serve as one of the most influential drivers of change in the adoption of wearable technology. As the number of seniors grow, there is a higher demand for medical care that is accessible and convenient, especially for those who may live far away from their families and other relations but still wish to remain independent. The available pool of caregivers is shrinking, making this aid from wearable technology more necessary than ever. According to a recent study by experts at AARP there are 7 people that could serve as potential caretakers for each person who is 80 or older in America.

By 2030 the ratio will shrink to 4 and by 2050 there will be fewer than 3 people available as possible caretakers for each citizen over 80 (Redfoot). This issue will be experienced on an international level. German Federal Statistical Office DeStatis recent published a report stating that there will be a deficit of 260,000 caregivers until 2025 (Mischke). Wearable technology will then become a major tool for older generations of the population as seniors can begin using wearable devices that monitor their vitals, communicate with their doctors, and alert emergency services when there is a major health issue. Wearable technology will become extremely attractive for this part of the population and adoption of these products will continue to grow. The following data from the United Nations shows forecasts of the ages of the developed world population in 2013 and 2050.

Figure 3

As is evident in the population pyramids, the base of these figures (the younger age groups) is shrinking, while the population continues to age. With these demographic trends, the dependency ratio will increase and elders more support from younger generations.

CONSTRAINTS OF CHANGE Some constraints of change also may inhibit the development of wearable technology in the health and fitness sectors, such as the availability of the necessary materials like rare earth metals. Rare earth metals are used in almost all consumer electronic devices and, in an increasingly technological society, demand for these metals will increase proportionally as the tech market expands (Poole). With China producing more than 90% of the worldâ&#x20AC;&#x2122;s supply under scant environmental laws or taxes, they hold a monopoly over a valuable resource necessary for wearable technology to become widespread. If the supply is withheld due to poor international relations, or damaged due to much of the ecological wreckage from current mining then wearable technologyâ&#x20AC;&#x2122;s growth may be stunted almost immediately. The demand for rare earth metals is expected to grow from 136,100 metric tons in 2010 to as much as 210,000 metric tons by 2015 (Humphries) and,

as seen in Figure 4, the prices of many of these metals has risen in the past several years. This, then, must be considered by manufacturers and retailers as they plan the future of wearable technology sales.

Figure 4

In addition to the rare earth metals, the non-renewable resources required to create wearables may eventually become a constraint for the growth of wearable technologies. Environmental expert and CEO of the Digital Power Group Mark Mills has calculated that an average iPhone uses about 361 kilowatts of energy a year, or more than a medium-sized refrigerator (Walsh). This energy usage, which includes the wireless connections, data usage, and battery charging, reflects the impact that widespread

wearable technology may cause on the environment. If energy becomes more restricted, it may serve as a constraint for wearable technology. Wearable technology will also have to overcome the constraint of consumer perceptions and fear in order to become a successful product in today’s market. As wearable technology is still a relatively new product, it needs to be adopted by the critical mass to survive. If the masses however, associate wearable technology with privacy concerns and excessive data collection, then wearables may never take off. A recent study from PwC cited “price, privacy, security” as consumers’ main qualms with wearable tech, with more than 80% of respondents reporting that their major concerns are associated with privacy implications and possible security breaches (Hopton). If these devices include personal health information, this statistic may increase due to its sensitivity. Privacy fears, which have increased due to very publicized attacks on major retail firms such as Target and Neiman Marcus, may also be combined with consumer fears of increased exposure to radiation found in technological devices to ensure the failure of wearable tech. Major players in wearable technology must ensure that future devices have the correct positioning and public image in order to be successful. Finally, one of the biggest potential constraints involve the FDA and governmental regulations. There is current little regulation in place to dictate the rules of the industry and it is uncertain which which regulatory agency will oversee wearable

technology. Wearable innovators should be aware of regulations such as the aformentioned Federal Health Insurance Portability and Accountability Act or HIPAA. Although it is not directed at wearable technology, HIPPA focuses on privacy of health data and will be extremely relevant to wearable devices that are collecting and storing consumer health and fitness data or that are marketed towards healthcare providers . Violators of HIPPA are subject to fines from $100 to $50,000 per violation which may make wearable innovators feel as though they are taking on a large amount of financial risk (Scott), constraining innovation in the industry. For wearable tech producers and manufacturers to be successful in the healthcare and fitness sectors, they then need to remain cognizant of federal regulations and work with agencies such as the FDA to ensure that their products are legal and accessible.

EVIDENCE-BASED BASELINE FORECAST Over the next 10 years the central question of how wearable technology will affect health and fitness is likely to change in many ways due to a number of factors, some of which are impossible to predict. Though it might be difficult to forecast every factor, articulating the most relevant ones sets projections in the right direction. One important indicator discussed was shipments of wearables in the health and fitness sectors. Using data starting in 2013 and projected data for 2014 and 2015, a trendline heading all the way to the end of the 2024 timeframe was produced. The trend showed a huge increase; whereas shipments in 2013 were just under 50 million, in 2024 they are projected to be near 300 million. The growth and development of wearable technology has shown similarities with another recent popular invention - tablets. Currently, two years into wearable techâ&#x20AC;&#x2122;s rise, roughly 1 in 5 Americans own at least one type of wearable technology. This percentage is almost identical to tablets at the same stage. Four years after this, 44% of Americans owned a tablet, and the expectation is that wearables will have the same numbers in four years (Bothun). Another important indicator was the rise in market value for wearable devices. Even though the data listed is for the entire wearables market, health and fitness wearables make up

a large portion of wearables. Data from 2010 shows that the market value was just in its infancy and the market value was $6.3 million. Hardly any products were available, and those that were did not meet consumersâ&#x20AC;&#x2122; needs. However, within a year the value skyrocketed to $630 million, and has continued to climb ever since. Today the value is around $5 billion, and as shown in the graph, it is projected to reach $30 billion by 2024 if current trends continue. Some even predict market value as high as $70 billion (Harrop).

Figure 5

Perhaps one of the biggest areas of contention among experts is whether future wearables will work with or against current devices. According to a recent PwC report, more than

75% of consumers believe that wearables will work in tandem with current devices like smart phones and will only enhance their capabilities, not replace them. Recently, popular items like the Pebble and the unreleased-but-heavily-hyped Apple Watch have supported this argument. At the same time, there is certainly a potential for these devices to replace current products. A wrist-worn device that can perform the same duties as a smartphone, while also proving to be less bulky and restrictive, would certainly stand a good chance of overtaking a smartphone. Even manufacturers like Ralph Lauren are getting into the industry by tracking the movements of tennis players through sensors placed in shirts (Edelson). At the end of the ten year timeframe the benefits of wearables in health & fitness have become more evident. Even though it has high market value, it is still a niche market for higher classes. The wearables industry has left its infancy, and many people have adopted wearables into their everyday routines. However, many others might still desire the product, but they simply donâ&#x20AC;&#x2122;t have the necessary funds to buy wearable devices. Our central question will thus become: How can wearables become more accessible to those in underdeveloped regions?

The Apple Watch. Starting price of $349

The Google Glass retails for $1500 to $2000

The Jawbone Up 3 which starts at $179

Scenario Analysis and Business Implications EXPECTED SCENARIO: UPTOWN Adoption has increased yet wearables are not affordable by those in lower socioeconomic classes. As Clark wakes up to his watch gently ringing on his wrist, he doesn’t feel tired like he did for so many years. By monitoring his vitals while he slept, the watch was able to wake him precisely when he would feel most rested, even though it was 23 minutes before his standard alarm. He wonders aloud what he should wear for casual Friday at work. With a simple cue his watch reminds him he hasn’t worn his new polo yet so he puts it on. He brushes his wrist against the car door and steps inside, eager to start another day as head of wearable engineering at Vandelay Industries, a high-tech manufacturer in Silicon Valley. “Clark, can you confirm your regular order from Starbucks today?” asks the voice coming from the car stereo, his digital assistant Cortana. He presses a button on the steering wheel to confirm that he does and heads there; his order is ready to go as soon as he pulls up. He swipes his wrist near the pay pad and continues on. Even though he can afford the convenience of a smartwatch, many people he knows simoly can't.

Prices have gone down in the past couple years but most still hover over $200. Clark is intent on changing that. His team has been focused on finding cheaper but useful materials to put into the wearables his company makes. For the past two years, they have tried but failed to create something to replace the expensive parts from China. They’ve come close a few times but haven’t found anything really innovative yet. His watch starts buzzing and a picture of his mom pops up on the screen. Hey mom, how are you?” he asks “I’m doing well honey, it’s just me and Pounce at home. Of course I have to go to the hospital later, and you know how those usually go.” “Yeah I know. I see you didn’t call me from the watch I gave you. Why don’t you just wear it? Everyone at the nursing home I volunteer at always talks about how jealous they are that I have such a cool thing on me at all times, and you won’t even put yours on. It can give you the same kind of care you get at the hospital but you get to stay at home.” “Oh, I wish you never would’ve given me that hunk of junk. And good Lord, I can only imagine how much it cost! That silly thing doesn’t even do anything. You know your father worked for 50 years as a surgeon and never once did he use a computer to tell him how to do his job.” “That has nothing to do with this mom! I promise,

it’ll help you if you use it. Alzheimer’s is really serious, and not having someone else around to help you isn’t good.” “Wait, who is this again? Where am I? What’s going on?” “Very funny mom, but this isn’t something to joke about. Look, I’m going into work but I’ll talk to you later, ok? Love you, bye.” After answering a few emails by dictating his response through his phone, Clark is finally at work. He goes into his office and starts to brainstorm what the day has in store for him. Suddenly he gets the urge to play some pickup basketball. Some colleagues join him on the court, but before he laces up his shoes, Clark slaps on a knee brace. It hasn’t been the same since he hurt it playing lacrosse in college, and the small dose of medicine it delivers is enough to ease his pain and keep him active. The game was fun but afterwards he feels much more tired than usual. “Clark, you are dangerously dehydrated. Drink at least 30 ounces of water and increase vitamin C intake,” Cortana says. Lunch ends and soon Joe is at his door. He asks him to come down to the lab and look at something. Maybe this is the break they’ve been looking for. Somewhere in the mess of wires and

random computer parts was a prototype Clark was eager to test. “I really think we’ve got it this time, Clark. It’s been a long time, and we’ve both spent months and months on this, but I really think this one has a chance,” Joe says excitedly. “Well, I sure hope so. How are the components looking? Give me a price estimate.” “They’re good, really good. This one costs about 75% less than normal to make. Just think about the possibilities- no more lost kids, sudden medical emergencies; I bet even people like those kids you mentor at the community center could afford these!” “I know, but first we gotta make sure everything is working right. Have you tested it underwater yet?” “No, we were waiting for you. I figured since you started this project you should be the one to test it out.”

Clark smiled as he picked up the device. He knew he shouldn’t be getting ahead of himself either, but he couldn’t stop himself from thinking about all the ways it could change the world. Hospitals could run more efficiently, athletes could train smarter, and it wouldn’t cost them much to do it. With that Clark dumped the device in a tank of water. Everything seemed to be

working - the screen lit up, the speaker worked, it started to buzz. Was this really the culmination of years of frustration? Before he could call it a success, the screen flashed and went out. He tried over and over to turn it back on but couldn’t. Just like the hundreds of others he’s made, this too failed. “Well, I guess that’s it,” Clark noted, shaking his head. “Guess we’ll just have to try again next time.”

Business Implications of the Uptown Scenario For the expected scenario, wearable devices have become much more prominent in society. Those in the upper-middle and upper class have adopted wearable devices as part of their everyday routine, but those in the lower class have yet to join in. Innovations have increased the capability of wearable devices, which can now sense patterns in behavior and respond in real time. With these innovations, however, comes a hefty price tag. Current tech giants Samsung, Apple, Intel, and Google will fight to maintain their share over emerging companies specializing in wearables. Even with many companies in the market, wearable devices will still be expensive due to the sophistication of the various products. Companies will compete with each other to create the most helpful and therefore bestselling gadgets, while in the process creating better products. Nearly every party related to healthcare has a vested interest in using the best available technology. Patients would see their bills

go down as doctorâ&#x20AC;&#x2122;s are able to diagnose and treat them remotely. Hospitals may hire less staff because of decreased need, which would again drive costs down for both patients and providers. Preventive medicine and early detection will also become a much larger part of healthcare, keeping costs low by avoiding catastrophic events such as heart attacks and strokes. Yet the future may not be as far away as it seems; experts at GE agree and made this clip to demonstrate how they are already improving healthcare connectivity

As previously mentioned, the market value for all wearable technology is projected to be over $30 billion by 2024 (Bothun), with some estimates reaching as high as $70 billion (Harrop). While this figure might be for the entire wearables market, health and fitness sectors make up around 40% of this

market. For comparison, the $30 billion projection is on par with the current U.S. coffee industry (CNBC). Though not everyone with a cup of joe now will have a smartwatch by 2024, wearables are still poised to become a major player in the tech industry. The emergence of wearables could prove detrimental to existing technology, perhaps most importantly smartphones. If wearables grow to replace instead of supplement smartphones, it would almost certainly cut into the $266 billion dollar industry (Lenovo). However, many of the companies that currently produce smartphones also produce wearable technology. As long as they adapt to this change and gain a strong presence in the wearable market, they should avoid any losses that will come from decreased smartphone usage.

ALTERNATIVE SCENARIO: LIVELY, LOW-COST, AND LIMITLESS GROWTH Involves limited government regulations and low cost production of wearable technology in the healthcare and fitness industries (faster growth than expected). Karen woke up suddenly in the middle of the night, her heart racing. Something had caused her to open her eyes, but she wasnâ&#x20AC;&#x2122;t sure what it had been. She felt extremely fatigued but assumed it was simply a result of waking up suddenly. John was away on business--he had left in the family miniplane[1] after dinner--so she knew he hadnâ&#x20AC;&#x2122;t caused her to stir. Karen listened but heard nothing. The possibility of an intruder briefly crossed her mind and she laughed out loud. It was 2022 after all: the glass material the windows of her house were now made of was as strong as steel and the lock on her door was impossible to pick. Karen, still half asleep, closed her eyes again. Just as she was drifting into a dream, she felt a pulsing on her wrist. Her night band! She pulled her arm out from under the covers of her bed, pressed a small button on the side of the band, and read her vitals. She then checked her blood sugar levels and found they were incredibly low. As she began to think about whether or not she should go to the hospital, the

telephone by her bed began to ring. She answered. “Is this Karen Eberts?” “Yes it is. May I ask who is calling?” “Karen, this is Doctor Ellis. I do not want you to panic, but you are currently hypoglycemic. Your diabetes medication must be working ineffectively. I have an ambuflight[2] on the way that will bring you to my home office.” “Is this necessary?” Karen asked. “Unfortunately, hypoglycemia can be fatal in diabetes patients. Even when it isn’t fatal, it can cause serious heart complications in the future. Would you like to stay on the phone until the ambuflight arrives?” “No, that is alright. What about my…” “Children? I see you have two of them. We are sending someone to stay at your house with them while you receive your glucagon[3] treatment.” “Thank you so much, Dr. Ellis.”

Karen received her treatment and was home less than three hours after she had picked up the call from Dr. Ellis. In the morning when her children woke up, she was already in the kitchen making pancakes, feeling strong and full of energy. As she was plating breakfast, the tablet embedded in her kitchen counter beeped. The charges for the previous night were all

listed. were covered by her universal health insurance plan. All costs were marked with green checks, indicating they were covered by the universal health insurance plan. As she read in last weekâ&#x20AC;&#x2122;s news blogs on her tablet, recent dealings with China had made the availability of rare earth metals cheaper to produce Karenâ&#x20AC;&#x2122;s night band and have it covered by the insurance plan.

Business Implications of the Lively, Low-Cost, Limitless Growth Scenario In this positive growth scenario, wearable technology in health and fitness has limited interference from regulatory agencies and direct materials in producing the devices (namely, rare earth metals) are relatively cheap. Both of these incentives cause businesses to eagerly enter the market to manufacture this type of wearable technology. Limited government regulation may signal to consumers that these devices are safe to use. Low costs of direct materials also give manufacturing companies the opportunity to have a healthy profit margin on the product, since consumers will be attracted to the product and may be willing to pay the extra dollar for the sleek device, especially since it may save your life, as Karen experienced. However, low government regulation may also create room for ethical issues in companies manufacturing or selling the devices. Making sure that safe materials are used, for example, might be overlooked with

less regulation. These may be threats to the consumers of these products. Specific business opportunities will arise from the causes of low regulation and low direct material prices. Low regulation is due to government trust in manufacturing firms. Reliable R&D will support this trust, so a need for engineers designing and perfecting wearable technology for health/fitness will increase. Defending these newly created devices will also warrant the need for lawyers at these manufacturing firms, who can vouch for the safety of the devices by continuously monitoring their tangible and intangible attributes. The tangible attributes would include the actual device, such as the battery and microprocessors. The intangible attributes would include the data transfer and privacy protections of the consumer. Safeguarding the information such as the consumerâ&#x20AC;&#x2122;s vital signs and even their location, which would be gathered on the devices, could be a legal concern. Low direct material prices stems from an improved relationship with Chinese suppliers of the rare earth metals used to manufacture wearable technology, which would be a signpost for this opportunity. Business opportunities here may include setting up a middleman between the Chinese supplier and foreign manufacturing firms to protect this relationship and keep costs low. The manufacturing firm may choose to circumvent this middleman to cut costs, but they might not

have the same type of trust as the middleman has. Low direct material prices might also be caused by a more reliable source of rare earth metals. If the United States, for example, discovers that it has a sustainable source of europium, used to make lasers, then domestic manufacturers would no longer have to rely on Chinese suppliers for this material.

Many new medical wearables (like the Dialog, pictured here) will stick directly to the skin and automatically record data that patients and doctors can view on connected devices.

ALTERNATIVE SCENARIO: METALIN' WITH THE INDUSTRY (CONSTRAINT) The cost of rare earth metals increase exponentially, making it difficult for manufacturers of wearables to stay in business. Tom has always loved his job as a supply chain manager. He enjoys what many people do not: plugging in numbers, matching customer orders to incoming shipments. Tom’s job has always felt like a balancing “game,” and he has always felt like he was “winning”. Relatively recently, Tom’s company has started production on wearable wristbands for people with certain illnesses like heart disease, diabetes, and lung disease. The bracelets were a huge success in their trial phases, and some of the best doctors in the country have given them their stamp of approval. Tom has been put in charge of ordering the materials for the bracelet devices. One day when Tom is checking the demand the company has for bracelets and calculating the order size he needs to put in for the rare earth metals used to create the bracelets, he faces a problem. The current price the company is charging for the wearable devices will not cover the ever-increasing price of the rare metals needed to make the bracelets. Tom goes to his advisor’s office to ask for advice.

“Ted?” “Yes, Tom. Come on in. What is going on?” “We have a problem. The price of the metals we need from

China is on the uprise--big time. We need to significantly increase the amount we are charging hospitals for the bracelets if we want to cover our own expenses.” “Increase? We are already charging them astronomical amounts! I am honestly surprised they are paying what we are asking for now.” “Ted, this is the problem. If we don’t raise our prices, we will face an enormous loss.” “And if we do, we will also face a loss. A loss of demand. What are you forecasting the price of these metals to be in the future?” “Well, it’s 2014 and the price per ounce is $1450. I’d say in the next three years, that price will rise to at least $2000.” “Thanks for coming to me, Tom. The firm is in peril, but I think we stay in front of the problem, we will be able to handle what comes our way.”

Business Implications for “Metalin” with the Industry (Constraint) Scenario If the price of rare earth metals rises to an extremely high rate, businesses will have a few response options including finding an alternative, charging more for their products, or shutting down to fend off further loss. Prices

may rise to due strained relationships with China, a key supplier of rare earth metals, or scarcity of the resource. Both of these events would be signposts for price hikes in the metals. If rare earth metal prices become too expensive, a proposed strategic response would be for companies and wearable producers to seek alternative materials or new innovations to continue creating wearable products. Recycling programs could become one way to combat this price and could open up a new rare earth metals recycling industry that would require new plants and employee training. In April of 2012, Honda unveiled the first mass rare earth recycling plan and developed a new technique for extracting rare earth metals from batteries used in their hybrid vehicles (European Commission). This sort of recycling system could become widespread to continue production of wearable technology. Producers could also begin using alternatives which, again, could lead to the growth of opportunities in another industry. In 2013 the US Department of Energy awarded $120 million dollars to Ames Laboratory with the goal of finding more alternatives to rare earth metals (European Commission). Extensive investment and research and development into new alternatives and innovations may temporarily stunt the growth of wearables, but could continue to make wearables possible and create an entire separate industry in the process.

In addition to finding alternatives or new innovative techniques, businesses may also make the choice to continue using rare earth metals and charge higher prices. This would cause high barriers to entry and make widespread adoption of wearables less likely. In this situation, the strategic response would be for businesses to adapt marketing strategies to present wearable as premium or luxury items targeting the upper class if they want to continue making a profit. The ethical consideration here would be that luxury products are less likely to be adopted by lower socioeconomic groups, who might have a greater need for the health-monitoring devices that upper socioeconomic groups. The last main option for businesses in this scenario would be stopping production altogether. Businesses could choose to exit the industry and lose fixed costs rather than incur the high variable costs associated with producing wearables. An environmentally sustainable disposal process would then need to be developed to get rid of any already made, unwanted wearables. This would create temporary wastemanagement opportunities. Eventually, however, the industry would almost completely shut down as wearables would no longer be produced. An ethical consideration here would be that industry-wide layoffs would take place, eliminating the job market in the sector of wearable technology for health/ fitness.

ALTERNATIVE SCENARIO: FAILURE TO LAUNCH (COLLAPSE) No correlation between the use of wearable technology and the overall health of a population can be determined. The industry collapses. Emma sat at her kitchen table sipping a cup of coffee and scrolling through Indiana job postings online for the 547th day in a row. As usual, nothing was striking her as a match. Emma had gone to college to be a nurse, and she was finding that there were not many jobs someone trained as a nurse could be selected for that were not nursing jobs. She had been laid off from her own nursing job exactly 18 months prior and had since been trying to find a new nursing job at a different hospital in the area. She was finding no openings. Emma and her husband Dan had recently been discussing expanding Emma’s search for a nursing position into other cities and even states. Emma was hesitant though because their three children were in school. Clare was in twelfth grade, Cindy in tenth, and John in seventh. The last thing Emma wanted to do was tell her children they were going to have to move to a new city and leave all of their friends behind. “I don’t know, Dan,” Emma said when Dan came downstairs that morning, “I just know they would be heartbroken if they had to leave everything they’ve

grown to love here behind.” "They will be more heartbroken if we have to tell them they cannot go to their first choice colleges because we do not have the funds to support them,” Dan pointed out. Emma knew that Dan was right. Money was tight, and since wearable wristbands had entered hospitals, health insurance costs had been steadily on the rise. Adding those costs to the always increasing cost of feeding three growing, athletic teenagers only made matters worse. When Dan and the kids left for work and school, Emma resumed her search, this time looking at hospitals as far as a California. Two weeks after the morning Emma decided to start looking for jobs outside of their city, the phone rang. "Hello, this is Emma speaking.” “Emma, this is Doctor Garrett from City General Hospital. I was wondering if you might be interested in interviewing for your previous job?” “What do you mean?” Emma asked. “I thought that the bracelets you were giving patients would make my job obsolete. I was told that was a guarantee.”

Well Emma,” the doctor said, “HR told me they had told you those exact words. I’m calling to tell you that our projections were wrong. We seem to be having some malfunctions with the bracelets, and no evidence exists that can really correlate increased health and wearable technology. And to be completely frank with you, a lot of patients have expressed a desire to come in to have a nurse check their vitals rather than use their bracelets.” “Huh,” Emma said, still confused. “I completely understand if you’ve made other arrangements and do not want to take the position back. The interview process is just a formality. If you want the job, it is yours.” “I want the job.”

Business Implications of the Failure to Launch (Collapse) Scenario In this scenario, wearable technology devices were adopted by the professional health sector originally in hopes of providing more efficient healthcare and easier access to patients’ data. After the hospital realized that the health of the patients was not improving as they had imagined and hoped using the

devices, they decided to bring back more personal caretakers and human workers, such as Emma in this scenario, in order to provide better healthcare. Not only did the devices not provide the desired change in health care, but patients actually preferred to see a human being treating them rather than relying heavily on technology to be the sole source of information. This failure of the intended launch of wearable technology in the healthcare sector would make these devices essentially obsolete, resulting in the collapse of many of the companies providing these devices. This would lead to job loss in the technology sector and would essentially send these companies back to square one, in the sense that they would need to adapt and start working on new innovations that do not have to do with wearable technology in the health sector. While this scenario would result in possible job loss in the technology sector, it would result in job opportunities to those who originally lost their jobs in the health sector. As previously mentioned, the adoption of wearable technology in the health sector would result in the obsolescence of many of the jobs provided by humans. Therefore, if these technologies werenâ&#x20AC;&#x2122;t adopted and didnâ&#x20AC;&#x2122;t take off as they originally intended, the health sector would be forced to bring back the labor provided by humans in this field. The job market in the health sector would need to completely shift if this scenario occurred.

Along with this, all of the companies that were put at risk given the possible adoption of wearable technology would regain their position in the health market. This may include companies that manufacture and distribute machinery and medical equipment for hospitals that may have become unneeded if wearable technology were widely adopted. A signpost for this scenario would be long-term slow adoption, which would indicate hesitation of consumers or denial of the product.

Intel's microchips are used in several wearable products.

ALTERNATIVE SCENARIO: THRIVING TRANSFORMATION Wearable technology that is initially intended for use in healthcare enters the athletic sphere and becomes incredibly successful. Emmett Golden is the quarterback of a high-profile college football team. His coach, Bryan Nelly is passionate about pursuing the newest technologies in athletic clothing, training, and equipment. A company currently producing wearable microchips for hospitals to monitor vital signs and track location of patients has approached Bryan Nelly about inserting the microchips into football athletic jerseys to track the vitals and location of players on the field. "What do you think, team?” Bryan Nelly asks after a practice two weeks before the team’s first game. “What’s the point? Won’t it be obvious if our heart stops? Why do we need a microchip to tell us that?” Joe Smidge asks. The rest of the locker team laughs, including Bryan Nelly, who usually does not have much of a sense of humor. “Well,” Bryan Nelly says, “If you guys do not see much value for these chips during the games, I’m going to see if we can utilize them during practice.”

Bryan Nelly and the company begin to talk about the potential for using wearable microchips during practice. They brainstorm and decide to try creating a wearable chip that can track speed as well as vitals and location. Bryan Nelly sees value in being able to make sure his players are improving over time by monitoring their running times. After two months of success with Bryan Nelly’s team, the company believes they will be able to consult with the NCAA to create a standardized wearable device that all teams can chose to use. This way, no one team will have an unfair advantage over another. The company is right in its assumptions. The NCAA approves and promotes the company’s product. In three years, the company’s success allows them to create and market similar products in the form of wristbands to “everyday” athletes. Now that he is out of college and playing for the Cleveland Browns, Emmett Golden is able to serve as a spokesperson and is the face of wearable technology in the athletic world, since he was one of the first athletes to be exposed to the devices.

Business Implications for Thriving Transformation The key players in the Thriving Transformation scenario would be collegiate or professional athletes and organizations. They are the ones who spread the image of wearable

technology so the consumers have a celebrity in mind when they think of the devices. In addition, famous athletes promoting wearable technology for health reasons may cause patients with health concerns (e.g. diabetes) to be less self-conscious about their condition and more inclined to use the device. The business implications would still promote the entrance of manufacturing companies (as in other successful scenarios), but new opportunities may involve the athletic organizations. Marketing and advertising firms, with wellestablished connections, could be contracted by retailers of wearable technology to increase advertisements about wellknown athletes using devices. Current retailers of other athletic equipment (e.g. Nike, Adidas, Puma) could join and start selling devices themselves. The promotion of wearable technology would have new avenues. Instead of hearing about healthtracking devices from a doctorâ&#x20AC;&#x2122;s office, consumers would be exposed to advertisements everywhere. Thriving Transformation would enter the sports sphere because it could be used to obtain optimal performance results. For training purposes, various Olympic teams may adopt devices to track calories burned, muscles deteriorated, vitamin deficiencies, or oxygen capacity and could supplement the athletes with what they most need after practice. For information needing more analysis, nutritionists could be hired to act on these results. This scenario could equally apply to non-

professional or high school sports, if teams are interested in investing in these devices. Signposts for the Thriving Transformation scenario would be highlighted in the sports world: increased adoption by athletes could suggest future partnerships with them if they agree to promote the product.

ALTERNATIVE SCENARIO: LAWSUIT AND TIE (WILDCARD) A malfunctioning device cause a death, which triggers lawsuits and causes the wearables industry to fall apart. As Mary Heals and her husband of three years drove to the airport, she could not believe that her dream of a honeymoon on the Amalfi Coast was finally coming true. Her law firm, one of the best in the country, was also one of the busiest. It was difficult to find time off as it was, but further complicating things was her mother’s health. When she married Brad, her mother Sue had just been diagnosed with early-onset Alzheimer’s and shortly thereafter, heart disease. Because Mary’s father was deceased and she had no siblings, she felt responsible for caring for her mother. Mary and Brad turned their home office into an extra bedroom, and Mary’s mother moved in with them so that

they could constantly monitor her health. A honeymoon seemed impossible. Recently, at Sue’s monthly check-up with Dr. Brown, Mary received surprising news. The doctor told her that a new company had just released a wristband that patients with heart disease and other illnesses could wear in order to monitor their vital signs. As an added bonus, GPS technology within the wristband could allow for tracking. This meant that if Mary’s mother was wearing one of these wristbands, Mary could constantly keep track of her health and make sure she was never in danger.

"Is it safe?” Mary asked. “The device has passed through its trial phases with immense success. Patients seem to be incredibly satisfied with the product. The second something is amiss, the device sends a signal to the hospital,” the doctor replied. “But how much does it cost?” “You’d have to check with your insurance, but given all of your mother’s conditions, it should be covered.” “Well, my mother lives with me. Does she really need to wear one of these if I’m always with her?” “If you are always with her, no, but wouldn’t you like to have a little more freedom in your life? Here, I just

got a few samples of the wristband in. Why don’t you have her try it out? If she doesn’t like it... no harm done.” At first Mary was hesitant to volunteer her mom. It would be an added stress for both of them. But then she couldn’t help but think about why her honeymoon was delayed in the first place. Sue was much better then; her Alzheimer’s was mild enough that she could be left at home without worry. The real reason Sue moved in was because Mary didn’t want her to be alone if something happened to her heart. This small wristband would ensure that her mother was never without help if she needed it. Mary would just need to purchase a week of international cell phone data and everything would work great. She decided that this trial was a perfect opportunity to give both of them more independence, and she took the wristband back to her mom. Three days into their vacation, Mary got a call from Dr. Brown. She answered with a smile, but her expression changed seconds after picking up the phone. Mary began to cry as the conversation continued. Sue had suffered a heart attack in her sleep. Though the wristband had detected the irregular heart signals, it malfunctioned and failed to send a signal to the hospital alerting them of Sue’s situation. It took hours before the message was finally transmitted. By the time help reached her, she was dead.

Mary and Brad took the next flight back. As soon as they got home Mary began compiling her case against the manufacturer and the hospital that recommended the device. She knew that in order to win the case she needed to attract national attention and get public opinion on her side. She decided to call her old college friend Megyn at Fox News, who was happy to help. Within a week Fox ran an hour-long segment on the dangers of wearable devices, and Maryâ&#x20AC;&#x2122;s interview played a huge part. Her interview also attracted the attention of over twenty other people from across the country who had similar experiences with the wristband malfunctioning on their sick parents. Mary agreed to take on all their cases and combine them into a class action lawsuit. Even though thousands of other tests were done after the mishap, and the original problem was easily corrected, it wasnâ&#x20AC;&#x2122;t enough to convince consumers. With the public on her side, Mary took her case against the wristband manufacturer to court and won with ease. The Fox report also attracted the attention of Congress, which passed the Sue Heals Safe Wearable Technology Act just six months later, putting harsh restrictions on the sale and manufacturing of wearable devices.

Business Implications of the Lawsuit & Tie Scenario Though it is not very likely, this wildcard scenario could have huge ramifications if it does occur. The effects of a major lawsuit against a wearable tech company would be far-reaching in the business world. The two key players in this situation are lawyers and media personalities. Lawyers are important because they can decide how much they want to attack an industry. For example, individual lawyers could keep their cases separate and request smaller settlements, or they could go for a much larger sum. Media personalities also play a big role in this situation. Given the right motive, such as increased ratings from coverage of a trial, the media has the power to influence the general publicâ&#x20AC;&#x2122;s opinion and perception of wearable devices. All it takes is a spark to get them started. There are any number of things that could be affected by major lawsuits against wearable firms, but here are some of the most important. To start, lawsuits would increase costs for wearable manufacturers in both the short- and long-run. These costs would then be passed on to consumers through higher prices, driving demand for products down. Public scrutiny from the lawsuits would also cause demand to go down. Additionally, legislation would made it harder to produce devices, again increasing costs.

With decreased demand, less units would be sold, and the wearable market would become an even more niche industry. Eventually, manufacturers would stop making the products and the industry would collapse. Adapting to the Lawsuit & Tie scenario would call for a companyâ&#x20AC;&#x2122;s crisis management team to promptly respond to a death. Proper handling of a malfunction like this would include press releases, media conferences, and product recalls to improve the product and to protect against future similar situations. Unfortunately, no signposts or signals exist for a wildcard scenario, as it occurs randomly. Certain preventative measures can be taken, however, including regular safety checks in the designs and sampling devices to check for proper function.

A possible image of what future interactions may look like.

This idea of "The Internet of everything" exemplifies the connectivity that wearable technology will bring to consumers.

CONCLUSION Wearable technology is penetrating many sectors today, but its influence in health and fitness may have major societal implications. Based on increased societal desires to be more connected, have smaller and more convenient communication devices, transfer data faster, and become physically healthier, gradual adoption by upper socio-economic groups in developed countries is expected. Initially, advanced new wearable technology for health and fitness will be expensive, but over time, prices will fall for the devices, allowing middle-class consumers to buy the product as a commodity as well. Increased societal use of wearable technology will improve selfmonitoring of vital signs and could decrease visits to the doctor. This could change the job market, diminishing the need for nurses and possibly even primary care physicians. Widespread use of these devices could potentially impact how insurance companies charge their participants; constant monitoring of vital signs and physical health could decrease costs for the participants if they prove to be leading healthy lives. Wearable technology could also be a preventative measure for risks that could lead to sudden death, such as strokes, heart attacks, or hypoglycemia. The growth of wearable technology also has the potential to have major implications for business. The first and most major impact would be on engineers, doctors, and manufacturing companies who would create the designs

for the devices and be the primary decision makers in considering which health conditions can be tracked. Other business implications deal with relations with providers of rare earth metals, marketing and advertising the product, and campaigns with athletic organizations. Getting involved in the early stages of wearable technology could be promising for businesses, as this segment of technology will continue to grow and impact many industries.

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