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This paper discusses the technical details of adopting prognostics and health management (PHM) implementation in consumer healthcare wearable devices. Consumer healthcare appliances differ from medical devices in that they do not undergo the Food and Drug Administration (FDA) approval process. The main objective of deriving a reliability assessment and optimization scheme using prognostics and health management methodology is to utilize condition-based monitoring for preventive maintenance and minimize warranty repairs. The design and implementation of reliability optimization methodologies include physics-of-failure based self-cognizant prognostics for operational reliability assessment and resource management approach that takes into consideration the usage profile of individual devices through utilizing fused data from various operational parameters such as device temperature, shock and vibration.