From Devices to Fabrics: The Reconfiguration of the Wearables Market

Smart textiles promise to turn health monitoring into a passive, continuous background function. Technology is maturing, but the industry’s real problem is not sensing; it is economics. A garment is washed, stretched, and eventually replaced, while the value of the data it produces depends on who is willing to pay for it. Smart textiles are likely to scale first in clinical and occupational settings, where continuous data has a clear payer, and not in consumer wellness. The winners will be those who control the data platform rather than the fabric.

Beyond the device-centric model

For over a decade, the wearables market has operated on a simple premise: people actively engage with devices to track their health. Wrist-worn products from companies such as Apple and Fitbit (now part of Google) have made health tracking accessible and embedded it into the daily routines of millions of users.

Yet the same characteristics that drove adoption now reveal their limits. Wearables require sustained participation: regular charging, consistent use, and active interaction. Industry surveys have repeatedly found that a significant number of users stop wearing their devices within months of purchase. In a market that increasingly values long-term health insights over short-term metrics, these gaps in data are becoming a structural constraint.

Smart textiles offer a different model. By embedding sensors into clothing, they eliminate the need for deliberate interaction and turn monitoring into a background function. Since fabric covers a large area of the body and sits close to the skin, garments can simultaneously capture electrocardiogram signals, respiration, muscle activity, temperature, and posture. Hexoskin’s biometric shirts and Myant’s SKINN garments are early examples of this approach.

The value of continuity is not uniform

Much of the commentary on smart textiles treats continuous monitoring as universally valuable. In practice, its value varies enormously by user. For a healthy consumer, round-the-clock data adds only modest insight beyond what a smartwatch already provides. For a heart failure patient recently discharged from hospital, a worker exposed to extreme heat, or a soldier in the field, a gap in data can mean a missed event with serious clinical or financial consequences.

Put simply, the value of continuity equals the likelihood of a meaningful event multiplied by the cost of missing it. This is the lens through which the market should be segmented rather than by sensor type or garment category. It also explains why most consumer-focused smart apparel has struggled to find a sustainable market, while clinical and occupational applications are gaining traction.

The economics problem the industry rarely discusses

A smartwatch is a durable asset, bought once and used for two to three years. Meanwhile, a smart garment behaves more like a consumable: it is worn, washed, stretched, and eventually replaced, and users need more than one to rotate through laundry. This fundamentally changes the unit economics.

To illustrate, consider a user who wears a monitoring garment daily, rotating two garments that each cost USD 150 and withstand around 100 wash cycles. On these assumptions, each garment lasts a little over six months, and the user replaces three to four garments a year, an annual hardware cost of around USD 550. By comparison, a USD 400 smartwatch replaced every three years costs around USD 135 a year. On a per-year basis, textile-based monitoring is roughly four times more expensive to sustain.

The most important variable in this calculation is not sensor cost but durability. Doubling wash life to roughly 200 cycles halves the annual hardware cost. In other words, wash durability is not just an engineering specification; it is the single biggest commercial lever in the category.

The industry is responding in two ways. The first is modular design, in which the costly electronics sit in a detachable, durable pod, while the garment carries low-cost printed or knitted electrodes. The second is service-based pricing, in which garments are supplied as part of a monitoring subscription paid for by someone other than the wearer. Google’s Project Jacquard with Levi’s demonstrated that conductive yarns could be produced at scale using conventional textile processes. But its focus on gesture control rather than health data and its eventual wind-down showed that technical feasibility does not create a business model on its own.

Follow the payer: Where smart textiles will scale first

Smart textile segments can be assessed in two dimensions: the value of continuous data and the clarity of who pays for it. On this basis, three segments are most likely to scale in the near to medium term: clinical remote monitoring (cardiac care, post-discharge recovery, and diabetic foot care), occupational safety (heat stress, fatigue, first responders, and defense), and clinical trials that use digital endpoints. Each combines high value from continuous data with a clearly identifiable payer: health systems and insurers, employers and defense budgets, and pharmaceutical sponsors, respectively. Elite and professional sport is an established niche funded by teams and federations. Consumer wellness, where individuals pay for themselves and the value of continuity is lower, remains a longer-term opportunity that depends on costs falling.

Clinical monitoring offers the clearest path. For example, Siren has developed socks with embedded temperature sensors that detect early signs of inflammation in people with diabetes, a precursor to foot ulcers that can lead to amputation. In the US, Medicare reimbursement codes for remote patient monitoring pay providers roughly USD 100 per patient per month across device supply and care management. Against an annual garment cost of around USD 550, or about USD 45 a month in this example, the economics work, but only just. Once again, durability determines whether the model is profitable.

Occupational safety is the most underrated opportunity. Employers face rising heat-stress risks as temperatures climb, along with stricter workplace safety expectations and significant injury-related costs. When an employer pays to reduce incidents and liability, the return on investment is easier to demonstrate than in consumer wellness, and the purchasing decision is made once, at scale, rather than by millions of individuals.

Clinical trials are a third, often overlooked, payer. Pharmaceutical sponsors are increasingly interested in digital endpoints, such as continuous measures of activity, heart rhythm, or sleep, which can capture treatment effects more sensitively than periodic clinic visits. For a sponsor running a trial worth 10 million dollars, the cost of equipping participants with monitoring garments is small relative to the value of more reliable data and potentially smaller or shorter studies.

Consumer wellness will follow, but the economy still needs to significantly move. For textile-based monitoring to match the annual cost of a smartwatch, garment costs would need to fall from USD 150 to around USD 36 at today’s durability, durability would need to rise from 100 to around 400 wash cycles at today’s price, or some combination of the two. Until then, consumer smart apparel will remain a premium niche rather than a mass market.

Who captures the value?

Smart textiles sit at the intersection of the textile, electronics, and healthcare industries, and each player faces a different strategic question.

For textile manufacturers, the integration of sensing capabilities offers a route out of cost-driven commodity markets. However, a real risk is that they could be commoditized again. In a modular architecture, the pod, algorithms, and data platform hold most of the intellectual property and margin, while the fabric becomes a contract-manufactured consumable. Textile players that want to capture lasting value need to own something scarce: clinical validation, regulatory clearances, or integrated sensor-knitting capabilities with proven wash durability that competitors cannot easily replicate. This is particularly relevant for large textile hubs in India and elsewhere in Asia, where the opportunity lies in moving from cut-and-sew manufacturing to co-development partnerships.

For consumer technology companies such as Apple, the common narrative is that smart textiles threaten the device-centric model. A more likely outcome is that platform owner’s textile sensors as accessories that feed data into their existing health ecosystems. In this scenario, smart textiles strengthen incumbents rather than displace them.

For medical device companies, regulatory clearance is the moat. A garment that is cleared as a medical device under US Food and Drug Administration or EU Medical Device Regulation rules can be prescribed, reimbursed, and integrated into care pathways, which consumer products cannot. This favors companies with clinical and regulatory expertise over those with fashion or consumer brands.

Across all of these players, data rights will become a central negotiating issue. Whoever controls the continuous data stream controls the analytics, clinical relationship, and recurring revenue. Garment makers, platform owners, healthcare providers, and payers will seek to own it, and the contractual terms agreed in early partnerships are likely to set the distribution of margin across the value chain for years to come. Companies entering partnerships today should treat data ownership as a commercial term and not a technical detail.

Barriers to scale

Several hurdles remain before smart textiles can move from pilots to mass adoption. Garments must withstand repeated washing without losing sensor performance. Batteries and connectors must be small, flexible, and removable. Textile sensors can shift against the skin during movement, creating signal noise that must be corrected through better fit and algorithms. Clinical products must demonstrate accuracy comparable to established devices, and the lack of widely adopted standards for testing and interoperability makes it harder for providers and payers to compare products. As monitoring becomes more pervasive, questions of data ownership, privacy, and security will also become more prominent.

Durability and clinical validation are the true commercial gatekeepers, as they determine unit economics and access to reimbursement. Power, connectivity, and standards are more likely to be resolved collectively as the ecosystem matures.

Questions for industry leaders

• Who pays for the data our garment generates, and is it someone other than the wearer?
• What is our hardware cost per monitored month, and how does wash durability change it?
• Which part of the value chain do we own that a competitor cannot easily replicate?
• Are we building a standalone product or a component of someone else’s platform?

What lies ahead for the industry?

Smart textiles are unlikely to replace traditional wearables in the near term. What is emerging instead is a reconfiguration of the market, in which value moves away from hardware toward data, services, and the payer relationships that fund them.

The direction of travel is clear, but the sequence matters. The category will be built from the clinic and the workplace outward and not from the consumer inward. The companies that succeed will be those that solve durability as a commercial problem, align with the stakeholders who pay for outcomes, and secure a position in the value chain that cannot be commoditized. In the years ahead, the most valuable health monitoring solutions may be those that function quietly in the background, but only if someone is willing to pay for what they hear.