wearablesIn 2013, wearable technology was given a lot of money to put where its mouth is.

According to analyst group CB Insights, $458 million was invested in wearables last year, split across 49 deals. That’s a 150 percent increase on the year prior, which shoots up to an 800 percent bump if you cross Foxconn’s $200 million investment in GoPro off the 2012 list. Things exploded in the last six months of 2013, with over $350 million pouring in. According to CB Insights’ data, up until the end of the second quarter of last year Jawbone and Fitbit accounted for two-thirds of all investment capital into wearable technology. It’s all new, almost entirely early stage action. But it’s a moving space. This time next year, it’d be a safe bet that we’re all writing about another solid increase.

But underneath the headline, and the euphoric hype, sit only issues and questions. Our relationship to technology and the Internet is going to shift, but no one has shown exactly how.

The first issue to contend with is that there has been an early tendency among major brands to try and put lipstick on a Fitbit to try and win the market. At CES, both LG and SONY launched new activity trackers, spicing up the offering with either basic smart watch or social functionality. Neither were enthusiastically reviewed. Talking at StartUp Grind last month, Fitbit CEO James Park said that in the Christmas shopping season his company owned 77 percent of the market. That is no simple accomplishment when your company is going up against Nike. The Fitbit range is in 30,000 stores in 28 countries. It is the best reviewed, most visible product in its category with a consistently prominent retail presence. There’s a lot of innovation to be had outside of Fitbit’s shadow.

The quantified self and tracking our health is a major driver in the wearable space. But as technology gets more sophisticated – OMSights debuted a compression shirt at Launch Festival last week that monitors activity and biometric information – the next question becomes what demand will be there for that real time data when the technology is ready. Emerging technology like a Scanadu, a small tool pressed to the forehead, will eventually put the potential in our hands to easily and quickly get a detailed assessment of our vital signs. When the novelty ends and we can get the information whenever we need it, will we really crave the capacity to look at live read outs of our blood pressure?

Outside of health there’s been a lot of noise about putting computers on our eyes and wrists. Samsung claims to have sold 800,000 smart watches in 2013, although it massaged these numbers by bundling the watch with its Galaxy 4 and there was some contention whether this represented the amount shipped to stores or actual sales data. Last year was supposed to be the year of the smart watch. Only two million sold. Details are being filled in about the long-mythical iWatch but the functional benefit of the smart watch over a phone – it is just as rude and takes almost as long to look at either in the middle of a conversation – hasn’t been shown, period. And of course, no wearables roundup would be complete without reference to Google Glass and the tensions over privacy and whether this is standard early adopter angst, or the beginning of genuine pushback.

In an interview late last year with Reuters, Shasta Ventures’ Rob Coneybeer said that the “iPhone moment for wearables is still a year or two off.” He’s right, in the sense that no single piece of innovation past the Fitbit – which in itself is just a vastly more connected pedometer – has ignited wide demand. Fitbit’s James Park has a different idea on this. He said that there will be no set form factor for wearable technology, that some people will want a watch, some glasses, some a shirt that tells them how well they slept.

Either way, the next hurdle for wearable technology to clear now the money is flowing the right way is create something past an activity tracker that proves itself indispensable, that makes sense in a deeply organic way and can show off wearables to be more than very clever technology that no one actually needs.

[illustration by Brad Jonas for Pando]