Would you jump at the chance of having a chip in your jumper?

Wearable computing has so far been little more than a curiosity, but new technology and falling prices will mean dramatic growth for such products in the next few years, according to a new report.

The Global Market for Wearable Computers, published this week by research firm Venture Development Corporation (VDC), predicts that shipments of wearable computers - such as those worn on the wrist, belt, earring or in the fabric of clothing - will grow by more than 50 per cent a year through 2006, reaching more than $563m (£360m). Shipments totalled more than $70m in 2001, the firm said.

However, those figures could prove conservative, VDC said, if innovations such as building computers into clothing fabric prove a success. "The true potential for wearable computing in 2006 could be well over $1.3bn, if improvements are made in consumer-based products, including commercially viable 'smart fabric' technology," said lead analyst Tim Shea in a statement.

As miniaturisation progresses, consumer electronics manufacturers and chipmakers have managed to squeeze music players, internet devices, mobile phones and the like into everything from earrings to jackets. While some of the designs remain concept prototypes on display only at cyber-fashion shows, others are now, or will soon be, on sale in the high street.

In some cases, simply making technology more portable can create a new class of products, as Sony found when it created the Walkman. This trend will is even more pronounced in an emerging class of devices embedded into ordinary clothing fabrics. "In the near future these smart fabric products will... integrate a vast array of sensors into everyday products," the report said.

A key application will be bio-monitoring, which collects information for medical purposes. Taking this a step further, some parents are already fitting their children with wearable monitors that can be used to track their whereabouts. Some parents in the UK are planning to embed location chips into their children in case they are abducted.

Internet and PDA (personal digital assistant) functions will also drive sales, VDC predicted.

Technologically, falling prices and rapid advancement in speech recognition technology and head-worn displays will make wearable devices more attractive to consumers, the report argued. Such features are already being built into some cutting-edge products. In the US and Asia, mobile phone carriers are beginning to offer mobile phones designed to be worn around the neck, like jewellery.

Chipmaker Infineon has created a packaging technology that allows circuitry to be woven into ordinary fabrics, which can then be washed normally or even dry-cleaned. The company created a prototype jacket with an embedded MP3 player, and says products such as identification tags could be built into clothes within two years.

Companies such as California's Charmed Technology specialise in fashion-centric devices. Fossil, which is best known for trendy watches, has created wrist devices that exchange information with handheld computers via infrared, and Sony is selling a "wearable" digital camera that is slightly smaller than a credit card.

Other wearable research is still at the concept stage. IBM, for example, has a research centre focusing on what it terms "pervasive computing". A company called Orang-Otang Computers has patented designs for gadgets such as a phone that fits under a shirtsleeve, a wrist-mounted audio recorder, a wearable laptop and a wearable camera.

Marks & Spencer's new boss also hinted recently that his company was seriously looking at incorporating such technology into its clothing ranges (see http://www.silicon.com/a55256 ).

VDC's study was based on a web survey and individual interviews with 471 users or potential users, along with executives in the industry.

Matthew Broersma writes for ZDNet UK