Why Wearables remain questionable for the masses --> Forbes.com How The Next PC Will Wear
By Arik Hesseldahl
It's a memorable commercial. A young executive trades stocks from the Piazza San Marco in Venice by giving voice commands to an IBM-made wearable PC, a tiny monitor positioned over his eye, repeatedly scaring pigeons in the process.
Despite the commercial, you can't buy the unit in question from IBM (NYSE: IBM - news), at least not yet. But IBM is among a handful of companies developing the technologies to make the wearable PC a reality. On May 11, IBM and Xybernaut (Nasdaq: XYBR - news), a Fairfax, Va.-based firm specializing in wearable PCs, announced a deal to jointly design, develop and manufacture Xybernaut's next-generation product.
With a tiny PC unit and head-mounted display somewhat reminiscent of the Borg from Star Trek, wearable PCs could potentially be a must-have toy for gadget-crazy geeks. Analysts and manufacturers alike tend to see them positioned for much more mundane applications. Manufacturing, military and law enforcement uses are likely targets.
``Imagine getting pulled over by a policeman who uses a wearable PC to check your license, then gives you a ticket from a printer on his belt,'' says Martin Reynolds, a technology analyst at San Jose, Calif., market research firm Dataquest.
Such a PC could go anywhere computing power is needed but space for a PC, monitor and keyboard unavailable or where workers need their hands free. Airline mechanics, phone technicians and factory workers might use such PCs for what analysts call ``vertical applications.''
As such the market is not expected to be particularly huge. A 1999 study by International Data Corp., Framingham, Mass., shows a projected $600 million market for wearable PCs by 2003. But IDC conceded that educating the market about potential uses of such products is the biggest hurdle facing manufacturers. Xybernaut's devices range in price from $5,000 to $6,900.
``These systems are expensive, and they haven't hit the price point where they will be attractive to consumers,'' says Kevin Burden, who follows the wearable PC market niche for IDC. ``They're great where a hands-free product is required, but they're not going to replace anything.''
Both IBM and Xybernaut's devices are full-fledged PCs, running full versions of the Windows operating systems with Intel (Nasdaq: INTC - news) Pentium processors inside. Even so, Burden says potential buyers are likely to see such a small PC with a tiny screen as inherently inferior to their desktop PC, at least at first.
``It took about three to four years for the market to accept notebook PCs as a replacement for the desktop,'' Burden says.
The market for wearable PCs apparently has yet to materialize. For its last quarter ended March 31, Xybernaut reported $4.5 million in losses on revenue of $1.5 million. But the company says revenue was twice what it was for the year-ago quarter.
Xybernaut's hopes are high. The company is sponsoring the 5th Annual International Conference on Wearable Computing in McLean, Va., on May 16 and 17. The company has managed to lure speakers from Microsoft (NYSE: MSFT - news), IBM, and Texas Instruments (NYSE: TXN - news) and the U.S. Army Research Lab.
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