the market for smart wearables
TRANSCRIPT
The Market for Smart Wearables
Nick Hunn – WiFore Consulting
A consumer-based perspective
Why is the wearables market like the opening song of a Broadway musical?
When will I get there? I ain’t certain.
What will we get? I ain’t equipped to say.
But who gives a damn – I’m on my way!
Wear am I going ? I don’t know.
Which is why Wearable Technology is currently at the top of the Gartner hype curve.
Why is the industry so interested?
• Black slabs (aka Smartphones) are hitting a plateau– They look the same
– They do the same
– They’re a pain to upgrade
• Once they fail to inspire us, they’re no different to socks or light bulbs– We’ll only buy a new one when the old one breaks.
As PC and laptop markets start to die and the pace of smartphone evolution slows, market leaders are looking to wearables as the saviour of their industries.
How do you measure the market?
What consumers want to buy? What vendors want to sell?
I’ve built up a view of the market based on what consumers might want to buy and how many of them might be prepared to spend their money on each type of wearable technology.
What will consumers buy?
Defining the Segments
Sports & Fitness
• Fitness Trackers
• Wristbands
• Smart Activity Clothing
0
10
20
30
40
50
60
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2014 2015 2016 2017 2018 2019 2020
Millions
But… not many people go to the gym – it’s limited
The “Curse” of the Reference Design
The game has changed from design to packaging
Chip manufacturers are designing pcbs and software preconfigured for basic functions such as smart watches and fitness bands.
These allow multiple manufacturers to bring sub $15 products to market in a matter of months, forcing prices down for everyone else.
Sports & Fitness
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
2014 2015 2016 2017 2018 2019 2020
Mill
ions
Wristbands Cheap Wristbands
Y
And prices of wristbands are plummeting…
• Fitness Trackers
• Wristbands
• Smart Activity Clothing
Sports & Fitness
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2014 2015 2016 2017 2018 2019 2020
Mill
ions
Fitness Tracker Wristband Activity Clothing
It becomes dominated by two sectors:
Professional / Serious Amateurs or Cheap / Free
Hearables
Things you can stick in your ear.
There’s a new Bluetooth standard being developed which adds audio streaming to Bluetooth Smart for really low power products.
And it’s always easier selling a product for which content is already available.
Hearables
It’s not just sound.
The Dash earbud records:• Accelerometer data• Pulse Oximeter data• Heartrate• Blood Oxygen Saturation• Body and Ambient Temperature• Steps• Calories Burned• Cadence• Speed & Pace• G-Force• Distance• Angle• Gesture
The ear is a better place than the wrist for most “health” measurements, as it doesn’t wave around.
Hearables
It makes hearables a VERY interesting market.
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
2014 2015 2016 2017 2018 2019 2020
Billi
ons
By 2020 over 128 million products could be shipping, with a total revenue of $17.3 billion.
That still only an attach rate of just 2.1%
Personal Medical
The Tricorder Effect
Once products become available for ~ $250 which can reliably diagnose common diseases, most families will want one.
Most medics in Europe and the US oppose them, as they threaten their income and status. They want to limit them to being prescription-only devices.
As a result the market may take off in the Far East, with on-line services in India. It’s difficult to predict volume because regulation may distort demand.
The “Oh my God, I’m going to die” market
Targeting the “Live Slow, Die Old” demographic.
“Brian Bilodeau, now Senior Director of Personal Devices at Microsoft, was shocked into action when his father-in-law passed away unexpectedly in his 60s. Bilodeau said, “ I have to get in better shape. I don’t want to die young.”
That’s not an amazing, new business plan. It’s called life. Most people get on with it.
Loved One Asset Tracking
Where’s my baby, child, pet?
Possibly the ultimate guilt sale.
How would you feel if you didn’t have one and your pet / child / baby got lost / stolen / died?
Loved One Asset Tracking
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2014 2015 2016 2017 2018 2019 2020
Millions
Pets Kids Babies
Who do you love most?
It’s a market that may be driven by the tabloid press.
A high profile kidnapping story could see it rocket.
Fashion
Competing with the high street
The average street market has more variety than the entire wearable tech market. That’s a major challenge for the industry.
Fan Clothing
Last year Foxtel launched the “Alert Shirt” to allow sports fan to feel the action, at a subscription of $1,000 per season.
If you could persuade 100 million fans to subscribe for $100 / year, that’s an annual revenue of $10 billion.
Glass & Stuff
• Augmented Reality
• Smart Glasses
• Smart Cameras
• Gesture Recognition
All face social battles to find acceptability.
It’s difficult to determine whether consumers will want them.
But Mark thinks they’ll sell 50 - 100m Rifts by 2020. That’s an annual market of around $10 billion in 2020.
Who is the market?
• West Coast
• Large Wrist
• Male
• Geek
If I ask a San Diego audience “Who’s wearing one?”, the response is ~ 70%.
In San Francisco it’s about 50%
In Europe it’s around 10%
Outside a wearables conference it’s below 0.2%
Sony’s recent “highly successful” crowd-funding campaign for it’s FES ePaper Watch only sold 137 devices. Beware the hype.
There’s a ticking time-bomb which is the Apple Watch
Smart Watches
• Apple have done something clever – they’ve made the phone complement the watch rather than the other way around. Plus it has Apple Pay.
• Samsung, Asus, LG, Motorola, Sony et al may have trouble catching up.
Other than for Apple, the curse of the reference design is at work. With a wide variety of $15 devices, how do you get a consumer to pay $300?
Smartwatches do not compete with high end watches. Smartwatches only have a life of tens of months (not decades) and are accurate.
Smart Watches
• Cheap watches will account for over half the volume
• Apple will take less than half the remainder, but
• They’ll take almost 70% of the revenue
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2014 2015 2016 2017 2018 2019
Bill
ions
Branded Apple Cheap
Unless consumers decide they don’t want smart watches.
The global market for smart wearables
$0
$5
$10
$15
$20
$25
$30
$35
2014 2015 2016 2017 2018 2019 2020
Bill
ions
Smart Watches Augmented Reality Fashion Kids & Pets
Medical Hearables Sports & Fitness
For more details, download the report from www.bit.ly/smartwear
But…
The more interesting market is the subscription Service Models based on the data generated by Smart Wearables.
That takes us to the next generation of content provision, which is Sensation.
Nick HunnCTO
mob: +44 7768 890 148
email: [email protected]
web: www.wifore.com
Creative Connectivity Blog: www.nickhunn.com
LinkedIn: www.linkedin.com/in/nickhunn
The Market for Smart Wearables: www.bit.ly/smartwear