The wearable category is predicted to grow at a compound annual growth rate (CAGR) of approximately 78 per cent for the period 2014 to 2018, with revenues expected to reach $1 billion by 2018, according to Frost & Sullivan’s new report.

According to the 2015 Australian Wearable Technologies Report, growth will be driven by innovation from local startups, high levels of activity in mergers and acquisitions and competition among global players such as Google and Apple as they attempt to gain market share in the Internet of Things (IoT).

Australians’ love of fitness and sport is already driving growth in fitness trackers such as Jawbone, Fitbit and Garmin Vivofit. Last week GfK figures showed fitness trackers account for 90 per cent of unit sales last quarter and, overall the wearable category had increased in value four fold compared to the first quarter of 2014.

Challenges to mass adoption of wearables outlined by the report include battery life, miniaturisation of embedded sensors, wearable data management and interoperability and compatibility among competing vendors and platforms. Security will also be a key consumer concern and significant investments will be made toward security enhancements.

The report looks at both consumer and business adoption of wearables and so far, enterprise has not been quick to adopt wearable tech in the workplace. In 2014, the consumer wearables segment accounted for 99 per cent of total wearables revenue. The remaining 1 per cent of revenue was from business or enterprise applications.

“In the enterprise (business) segment, most wearable technologies are currently at the prototype stage. However, Frost & Sullivan expects significant enterprise adoption of wearable technology from around 2017 as several companies, especially in the Mining and Oil & Gas industries are already looking to trial wearable products,” said Audrey William, head of ICT Research, Frost & Sullivan ANZ.

William outlined the potential benefits of wearable tech in business applications in the future. “New wearable technology sensors embedded within smart shirt/vests can enhance worker safety and safer working environments for field technicians in mines by recording and analysing data on temperature, air quality and gaseous leaks. Ultimately, wearable technologies has the potential to impact every industry in Australia, including Mining, Oil & Gas, Engineering, Healthcare, Education, Manufacturing, Logistics and Leisure & Entertainment.”

All these wearables will generate a huge amount of data, meaning data analysts will be another industry benefiting from  commercial applications of wearable technology.

“Subsequently, service providers and data analytics companies can derive detailed analysis, providing trends and insights to service providers and businesses to make informed decisions to improve business processes and sales, reduce costs and enhance R&D capabilities,” said Wonjae Shim, research analyst, ICT Practice, Frost & Sullivan ANZ.