It’s intuitively obvious that wearables will require flexible circuits; The human body, after all, moves and consists of curves; boxes are not fashionable. Xerox is positioning itself as an expert in all things printing, and has gotten itself interested in the printing of electronic circuitry on flexible substrate.
Another strategy might be to make the rigid circuitry very very small. That’s one trend that popped up at the recent Maker Faire in New York, where Microduino Studio was showing an Arduino circuit board a little smaller than a quarter. (They were, perhaps, inevitably, raising money through a Kickstarter, which has now oversubscribed a $20,000 campaign to the tune of $86,000, with more than two weeks to go.)
There are lots of cool things you can do with an Arduino, if you’re so inclined, and a cheap tiny Arduino expands its possibilities. But the platform is really a tool for hobbyists more than a platform for big-time industrial work. It’s hard to see how the Arduino platform, important as it is to the Maker community, will break out of the prototyping world into commercial development, no matter how small it ever gets.