Is The Future of Smart Clothing Modular or Integrated?

Posted on September 4, 2014 I Written By

Kyle is CoFounder and CEO of Pristine, a VC backed company based in Austin, TX that builds software for Google Glass for healthcare, life sciences, and industrial environments. Pristine has over 30 healthcare customers. Kyle blogs regularly about business, entrepreneurship, technology, and healthcare at kylesamani.com.

OMSignal recently raised $10M to build sensors into smart clothes. Sensoria recently raised $5M in pursuit of the same mission, albeit using different tactics. Meanwhile, Apple hired the former CEO of Burberry, Angela Ahrendts, to lead its retail efforts.

And Google is pushing Android Wear in a major way, with significant adoption and uptake by OEMs.

There’re two distinct approaches that are evolving in the smart clothing space. OMSignal, Sensoria, and Apple are taking a full-stack, vertical approach. OMSignal and Sensoria are building sensors into clothing and selling their own clothes directly to consumers. Although Apple hasn’t announced anything to compete with OMSignal or Sensoria, it’s clear they’re heading into the smart clothing space in traditional Apple fashion with the launch of Health, the impending launch of the iWatch, and the hiring of Angela Ahrendts.

Google, on the other hand, is licensing Android Wear to OEM vendors in traditional Google fashion: by providing the operating system and relevant Google Services to OEMs who can customize and configure and compete on retail and marketing. Although Google is yet to announce partnerships with any more traditional clothing vendors, it’s inevitable that they’ll license Android Wear to more traditional fashion brands that want to produce smart, sensor-laden clothing.

Apple’s vertically-integrated model is powerful because it allows Apple to pioneer new markets that require novel implementations utilizing intertwined software and hardware. Pioneering a new factor is especially difficult when dealing with separate hardware and software vendors and all of the associated challenges: disparate P&Ls, different visions, and unaligned managerial mandates. However, once the new form factor is understood, modular hardware and software companies can quickly optimize each component to drive down costs and create new choices for consumers. This approached has been successfully played out in the PC, smartphone, and tablet form factors.

Apple’s model is not well-suited to being the market leader in terms of raw volume. Indeed, Apple optimizes towards the high end, not the masses and this strategy has served them well. But it will be interesting to see how they, along with other vertically integrated smart-clothing vendors, approach the clothing market. Fashion is already an established industry that is predicated on variety, choice, and personalization; these traits are the antithesis of the Apple model. There’s no way that 20% or even 10% of the population will wear t- shirts, polos, tank tops, dresses, business clothes, etc., (which I’ll collectively call the “t-shirt market”) made by a single company. No one company can so single-handedly dominate the t-shirt market. People simply desire too many choices for that to happen.

OMSignal and Sensoria don’t need to worry about this problem as much as Apple since they’re targeting niche use cases in fitness and health. However, as they scale and set their sites on the mass consumer market, they will need to figure out a strategy to drive massive personalization. Apple, given its scale and brand, will need to address the personalization problem in the t- shirt market before they enter it.

The t-shirt market is going to be exciting to watch over the coming decades. There are enormous opportunities to be had. Let the best companies win!

Feel free to a drop a comment with how you think the market will play out. Will the startups open up their sensors to 3rd party clothing companies? Will Apple? How will Google counteract?