The flurry of wearable electronics launches at Mobile World Congress shows how rapidly the category is accelerating. We are currently tracking 79 devices that have been announced. Doubtless many more are about to appear judging from activity on sites like Kickstarter; we can then expect a further round from fast followers in China.

This is familiar territory: from 2002-06 many new entrants decided to attack the LCD TV business. While the established order was upset, few of those entrants have survived. Most notable of course is Vizio, which did far more than just enter the market – its innovation in applying business models from the PC industry to television is key to the brand’s success.

While wearable devices are not as mature as LCD TVs were when the insurgents entered, it is likely that any must-have feature set or styling will be quickly imitated. While it is not possible to pick winners at this immature stage of the market, there are several pointers to assessing likely survivors and winners:

  1. Companies will need to innovate on business models as well as devices. Innovative tie-ins with health, dieting and fitness services should prove rewarding.
  2. In gold rushes, the people who sell shovels and beer often win most. Providers of fundamental technologies in measurement and display may have the greatest success.
  3. Channel reach tends to be under-valued. Vizio needed Walmart to move it into high volume. Established television setmakers’ critical reach and logistics competence proved decisive.

Wearable device featuring is still unstable and the products are only selling to early adopters at this time. We can expect them to evolve rapidly – but look closely for innovation in business models and services.

We will hear from innovators such as Martian Watches, Qualcomm, 4iiii Innovations, and Pebble in session 8 of USFPD Connected Devices: Performance vs. Convenience, March 3-4 in Santa Clara, CA.