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The Wearable Revolution

Chris Morris, Special to CNBC.com
Monday, 22 Apr 2013 | 12:45 PM ET
Source: Google

High tech is going high fashion.

With Google distributing its first sets of Google Glass eyewear and observers eagerly awaiting confirmation that Apple is working on a smartwatch, proponents of wearable technology are looking further down the road. And they're pretty excited about what they see in terms of the potential for profit and disruption to the personal technology world.

There's nothing especially new about wearable tech, though. In some ways, a case can be made that the wearable technology revolution started with the first wristwatch. It's the promise of connected technology—devices and clothing that let you interact with the world around you—that is new, and that could really shake things up in the information age.

IMS Research predicts the market for wearable technology will reach $6 billion by 2016, and analysts at the firm say they wouldn't be surprised if the actual number exceeds that.

(Read more: Disruptors Can Delay the Apple iPod Way)

"A $6 billion market in 2016 is our most conservative forecast," said IMS senior analyst Theo Ahadome. "In our mid-range and upside projections ... an increasingly self-aware consumer seeks more and more data on their health and fitness, leading to even more rapid expansion in the market for wearable technology."

Today's wearable tech is generally aimed at fitness enthusiasts. Items like the Fitbit arm band, which measures data including the number of steps walked, quality of sleep, and other personal metrics, have been selling fairly well for a couple years. But with the launch of Google Glass, which alerts users to incoming messages and lets them take pictures and video (among other features), the stakes are being upped. And with both Apple and Microsoft reportedly working on smartwatches that may let users make calls, keep up to date with their social networks and send and receive text messages, it will be some time before the long-term winners and losers on the wearable tech landscape are sorted out.

Google Glass may be capturing the bulk of the media attention right now, but analysts say it's unlikely the device will be an instant hit when it becomes widely available. In fact, some technology experts speculate that the device that is trickling out now is likely more of a large-scale prototype than a representation of what will ultimately be made available to the general public.

(Read more: Why Some Innovative Gadgets Never Catch On)

"I doubt Google's looking to sell 1 million of these," says tech futurist and author Scott Steinberg. "What it's probably looking to do is get the technology in people's hands and see how they interact, see what features resonate with them, and then, based on that, iterate a version 2 and version 3."

Smartwatches, though, could prove to be a bigger breakthrough—especially if the Pebble is a good barometer. The early smartwatch was a smash on Kickstarter—and may have single-handedly ignited the market for these devices. While the founders originally hoped to raise $100,000 via the crowdfunding site, they ultimately raised $10.3 million.

It's that sort of excitement that has investors buzzing about Apple's plans.

"The furor about wearable technologies, particularly smartwatches and smartglasses is unsurprising," said Josh Flood, senior analyst at ABI Research, which expects over 1 million smartwatches to ship this year. "Apple's curved glass-based watch could prove to be a revelation in the wearable technologies market. The major question is whether [it] will act as a complementary device to the company's iPhone or as a standalone product with other functionalities like health or activity tracking capabilities."

(Read more: What Netflix, IBM Can Teach Us About Disruption)

Wearable tech isn't simply tied to accessories. At this year's South by Southwest conference, Google showed off a prototype "smartsneaker" that would encourage owners to exercise. The fashion industry, meanwhile, has talked about shoes that warm chilly feet and clothes that change shape or color to match the wearer's whims.

Even underwear can be high tech. Almost six years ago, the Air Force introduced a technology that attached nanoparticles to clothing fibers using microwaves. This created a coating that killed bacteria and repelled liquids, resulting in T-shirts and underwear that could be worn hygienically for weeks without washing.

Technological advances alone won't persuade people to embrace wearable technology, though. Making the shift from a curiosity to a must-have item will require a convergence of events.

"Three elements will affect whole-scale consumer adoption: price, utility and most importantly, a cultural shift," said Daniele Fiandaca, head of innovation at Cheil Worldwide. "We'll only get mass adoption once price is significantly reduced. [Also], as soon as a development comes along that is useful to the masses, wholesale adoption will be a natural consequence. And culturally, the more embedded technology becomes in our lives, the more it will become a point of difference between haves and have-nots, so social acceptance will also be key. A perfect storm that unites all three … is the holy grail."

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The argument against these sorts of devices—that they could make people even more dependent on technology—may in fact suggest how wearable tech can achieve long-term disruptive success. The true way for wearable tech to be useful to people is for it not to distract them with more information, but to better integrate information into their lives.

"At the moment, all of our technologies scream for our conscious attention," said Luke Williams, professor of innovation at New York University's Leonard N. Stern School of Business. "If I want to check the latest stock price, I have to stop and do that. But think about how much information we're aware of in the world just by walking around. The promise of this new tech is it's not going to reduce the amount of information we have, it will make it easier to manage. Much of it, I think, we will access through our peripheral senses."

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