No one said this business was going to be easy. Despite the hype and excitement surrounding wearable technology, the industry has yet to push its way into the mainstream for a variety of reasons. The biggest of all is that many early adopters just don’t have much use for wearables outside of small niche groups and specific use cases. We have yet to determine how wearables can become a life companion without just being a smartphone on your wrist. As a result, 2016 saw an increased rate of attrition that culminated in the demise of Pebble, the financial struggles of Fitbit, and the repositioning of the Jawbone brand.



The state of the industry

When the Apple Watch was released and the smartwatch craze hit, companies rushed to follow but were surprised when consumers didn’t want a device that could simply do everything their smartphone did. They learned that smartwatches were less like the next step of the smartphone craze and more like the next iPod—a device with no potential to become a homebase for device-specific apps and their various uses. If we’re being honest, smartwatches are simply the stepping stones to something far greater than what we have ever thought possible before.

This, of course, does not mean that wearables are dying out. Instead, we are simply seeing the next evolution of technology playing out right before our eyes. We now know more about the industry than we did at the start: we know where the money is and where it isn’t, and we know what consumers are looking for.

Jawbone pivoting out of consumer wearables and into clinical healthcare services is not only the right move for the company, but for the industry as well. The move gives wearable technology a chance to take root and grow in a healthy environment as we prepare for future iterations.

CES 2017 had a strong showing from the wearable industry, with many of the most impressive innovations having some kind of healthcare application. It isn’t enough to simply connect your phone to your watch, track steps, and count calories. The industry is being introduced to an array of products that are far more focused in their application and they are getting the attention they deserve. This is the type of innovation that Jawbone is pivoting toward.



The Potential of Healthcare

A report from back in 2014 linked the emergence of wearable technology to the beginning of a dramatic transformation in the healthcare sector. The four most important factors to this revolution were considered to be a shift toward disease prevention, an increase in personalized medicine, a growing importance to data-based decisionmaking, and new companies entering the industry to change up traditional dynamics.

Already, there has been many major leaps forward with wearables in the healthcare sector, helping medical professionals collect data and monitor patients dealing with diabetes, sleep disorders, obesity, cardiovascular disease, and many other medical conditions. A high-profile move like Jawbone could help to shine light on all the good that has been done in this field and how lucrative a business-to-business model can be.

The clinical wearable devices market is expected to reach near $19 billion by 2020, which should help Jawbone discover more possibilities at higher margins with far less competition than there is on the consumer side. More money means more innovation in the application of wearable technology, which will allow them to move away from the kind of surface-level data, common in most fitness tracking systems, that led them to failure and the industry toward stagnation.

The culmination of technology, data collection, and diagnostic capabilities is due to create some massive growth in this sector over the next few years. The greater resources available in healthcare will allow wearables to pay closer attention to specific niche groups and build products that address the needs of the consumer more directly.



Looking to the Future

The Jawbone pivot represents the the beginning of a high profile changes in the wearable industry. In the future, wearables won’t just be high-tech watches and trackers you wear on your wrist, they will be intricate and subtle devices hidden in your clothing, your jewelry, or worn in some other inconspicuous way to harness life-changing data and apply it toward a solution.

Wearables can offer the sci-fi technology we were promised, but it’s going to take time and the reconsidering of what a “wearable” is and what the technology can really do. Jawbone’s decision should be looked at as a precursor to the market shifting away from simple fitness and weight loss toward future applications for overall health. The industry will be an interesting one to watch these next few years as we wait to see what other companies on the consumer side do next. Do they make the jump to healthcare too?