With smartphones, tablets and other mobile devices already becoming prevalent in today’s society, consumer tech companies are already stepping up their game when it comes to providing new innovative products. That innovation could be coming to your sock drawer.
Well, maybe not your sock drawer, but your wrist, eyeglasses and closet.
Wearable tech has finally begun to reach critical mass and could be one of the hottest trends in the sector for years to come. For investors, getting in on the market’s early adopters could lead to profits.
A Set-up From Calculator Watches    

Remember Casio’s (OTCBB:CSIOY) “smartwatches” from the early-1980s? This early foray into wearable tech was basically a glorified calculator that could also tell time and depending on the model, track a few notes. Well, times in the wearable tech sector have certainly changed. Today, the category is defined as any products that are worn on an individual’s body for an extended period of time and is significantly designed to enhance the user’s experience. So far, new wearable technology can be found into four different categories- fitness, healthcare and medical, industrial and military, and infotainment.
More importantly, with such innovative heavy-weights like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) now taking aim at the market segment, the technology quotient has knocked into the stratosphere. Featuring super-fast semiconductors, touch screens and Bluetooth connect-ability, a variety of wearable tech products have launched and have resonated with consumers. According to research conducted by IHS (NYSE:IHS), more than 14 million wearable technology devices were estimated to have been shipped in 2011.
However, that’s just a drop in the bucket in terms of the sectors long term potential.
According to IHS, the product segment- which features everything from augmented reality glasses to smartwatches- is on the fast track with growth and will likely see shipments surge by more than 550% from 2011 to 2016. Overall, the research group estimates that 171 million wearable tech devices will ship in 2016. That echoes other analysts’ projections with wearable tech becoming a $1.5 billion market by next year.

SEE: The Apple iWatch - Is It About Time?
Who To Bet On
So far the market has seen a vast variety of firms take on wearable tech. For example, classic electronic firms like Sony (NYSE:SNE) have unveiled new wearable products. However, so has sports apparel firm Nike (NYSE:NKE). For investors, finding a winner in the space isn’t so much about finding who has the hottest device, but makes all the internal components and wins no matter what.
One potential winner could be Corning (NYSE:GLW). Already, the firm’s super-strong Gorilla Glass is used in an assortment of LCD TVs, smartphones and tablets and has quickly become the industry standard. For wearable tech Corning has developed its new Willow Glass product. This type of glass is so thin and strong, it actually can be bent as easily as a piece of paper. That makes it perfect for a variety of wearable applications such as Apple’s rumored iWatch.  
Another big winner could be Freescale Semiconductor (NYSE:FSL). The company’s latest design features a 32-bit processor, flash memory, RAM, a clock, I/O control unit and other components. While that may sound like standard semiconductor-fare at this point, the impressive thing is that it is measures only 1.9 by 2 millimeters. Already, Freescale’s chips are found in a variety of popular wearable tech devices. This miniaturization will only help strengthen its position further. This trend will also benefit ARM Holdings (NASDAQ:ARMH).
Another potential winner could be touch pad/screen maker Synaptics (NASDAQ:SYNA). Already, the firm’s products can be found in a variety of PC, Laptop and mobile applications. Making the leap to adding these touch sensitive devices to wearable tech isn’t that crazy of a stretch. While it currently hasn’t announced any wearable tech deals or partnerships, the potential for Synaptics to grow in the space is pretty good give its history.
The Bottom Line
While it used to be considered science fiction, wearable technology is quickly becoming science fact. Consumer adoption of the devices is growing and more and more electronics firms are jumping in on the bandwagon. For investors, the wearable tech revolution is just beginning. The previous ideas are some best ways to bet on the potential winners in the sector.    

At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Personal Finance

    5 High-Priced Apple Products

    With the skyrocketing demand of anything Apple, many have profited off the demand by selling Apple merchandise on the auction block.
  2. Personal Finance

    Apple iWatch: Is It About Time?

    If there any truth to the rumors of an upcoming Apple iWatch, how would it impact Apple's other products and the evolution of technology?
  3. Investing News

    Google Leaps Ahead With Motorola Patents

    Google is positioning itself to capture a bigger chunk of the market. Find out how.
  4. Entrepreneurship

    Steve Jobs And The Apple Story

    Discover the lessons you can learn from Steve Jobs, with a brief history of Apple.
  5. Personal Finance

    5 Surprising Companies Google Owns

    These acquisitions have joined the Google family, but you may not recognize them.
  6. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  7. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  8. Economics

    Is Wall Street Living in Denial?

    Will remaining calm and staying long present significant risks to your investment health?
  9. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  10. Investing News

    How AT&T Evolved into a Mobile Phone Giant

    A third of Americans use an AT&T mobile phone. How did it evolve from a state-sponsored monopoly, though antitrust and a technological revolution?
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center