Flash Report from Wearables TechCon Day 2 Mar. 11 FINAL NEW · 2015. 3. 11. · Fung business...
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1 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved. March 10, 2015 • One challenge for wearables manufacturers is learning how to prevent their product from being thrown into a drawer out of frustration and never used again • While battery life is essential, it is software that bridges the gap between the human and the hardware • Although there are some fitness products for the sportsaddicted, the mass market for apparel with wearable tech is probably a couple of years out MORNING KEYNOTE: Solving the Sock Drawer Problem: How are we Failing Consumers? Tuesday’s keynote focused on what makes a wearable a success versus an object that gets relegated to the back corner of one’s sock drawer. Dr. John Feland’s firm, Argus Insights, collects early feedback and user data on wearables, and then uses that data to make predictions of a device’s success. The unboxing and initial tuning of a device makes a huge difference in whether it is used regularly or returned within 24 hours to place of purchase. One large fitness band maker stumbled initially, but regained footing with an instruction rewrite, and sales growth ensued. Another challenge for device makers is to continue to provide an endless series of engagements to maintain users’ interest after conquering all device levels. Interestingly, at present, makers of smartwatches with round dials (as compared to square ones) are leading the market. The Apple Watch has a square dial. However, the product has achieved a significant amount of prelaunch and launch buzz, and the market for smartwatches is still in its early stages. MEDICAL WEARABLES: Medical Wearable Devices Market Shows Huge Potential, But Tight Regulations Constrain Growth The medical wearable devices market is worth $2 billion today and is projected to grow to $40 billion by 2020. It is a highrisk (due to a tight regulatory environment) and highreward segment within the wearables world. Most wearables companies focus on wellness and fitness at the moment, and there are real market opportunities in devices for seniors and people with health conditions. However, a strict FDA approval process is a significant barrier to entry for many wearables companies. At the moment, innovation in the wearables world is outpacing regulation. Wearable devices are subject to FCC and FDA medical device regulations if they are intended to treat a medical condition. Labeling and marketing could make all the difference: a medical wearable would help “treat obesity” while a wellness wearable would help “manage weight.” And the FDA approval process for a medical wearable device can range from one to five years, depending on device complexity.
Transcript of Flash Report from Wearables TechCon Day 2 Mar. 11 FINAL NEW · 2015. 3. 11. · Fung business...
1 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
March 10, 2015
• One challenge for wearables manufacturers is learning how to prevent their product
from being thrown into a drawer out of frustration and never used again
• While battery life is essential, it is software that bridges the gap between the human and the hardware
• Although there are some fitness products for the sports-‐addicted, the mass market for apparel with wearable tech is probably a couple of years out
MORNING KEYNOTE: Solving the Sock Drawer Problem: How are we Failing Consumers?
Tuesday’s keynote focused on what makes a wearable a success versus an object that gets relegated to the back corner of one’s sock drawer. Dr. John Feland’s firm, Argus Insights, collects early feedback and user data on wearables, and then uses that data to make predictions of a device’s success. The unboxing and initial tuning of a device makes a huge difference in whether it is used regularly or returned within 24 hours to place of purchase. One large fitness band maker stumbled initially, but regained footing with an instruction rewrite, and sales growth ensued.
Another challenge for device makers is to continue to provide an endless series of engagements to maintain users’ interest after conquering all device levels. Interestingly, at present, makers of smartwatches with round dials (as compared to square ones) are leading the market. The Apple Watch has a square dial. However, the product has achieved a significant amount of prelaunch and launch buzz, and the market for smartwatches is still in its early stages.
MEDICAL WEARABLES: Medical Wearable Devices Market Shows Huge Potential, But Tight Regulations Constrain Growth
The medical wearable devices market is worth $2 billion today and is projected to grow to $40 billion by 2020. It is a high-‐risk (due to a tight regulatory environment) and high-‐reward segment within the wearables world. Most wearables companies focus on wellness and fitness at the moment, and there are real market opportunities in devices for seniors and people with health conditions. However, a strict FDA approval process is a significant barrier to entry for many wearables companies.
At the moment, innovation in the wearables world is outpacing regulation. Wearable devices are subject to FCC and FDA medical device regulations if they are intended to treat a medical condition. Labeling and marketing could make all the difference: a medical wearable would help “treat obesity” while a wellness wearable would help “manage weight.” And the FDA approval process for a medical wearable device can range from one to five years, depending on device complexity.
2 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
The wellness app developer iTriage conducted a survey of its 3,300 users in 2014 and early 2015. The results indicate:
• Low adoption: Only 19% of users track their health and fitness with a medical wearable device.
• A positive attitude toward medical-‐purposed device adoption: Of those surveyed, 76% would be willing to use a device for treatment purposes while 68% would use it if it was recommended by their health insurer.
• There are cost and user experience constraints: Of respondents, 38% said cost prevented them from using a medical wearable, while 75% expressed interest in adoption. Meanwhile, 20% of those surveyed said wearable health devices are too complicated.
Types of Medical Wearable
Target Area Device Name Function Price
Diabetes
OneTouch UltraMini Blood Glucose Meter Detects glucose level in body $20
Weight Fitbit Aria Wi-‐Fi Smart Scale
Tracks weight, BMI and body composition; allows wireless syncing $130
Seizures Embrace Watch Tracks seizures and sends alert; measures stress
Estimated $368 (still in clinical trials)
Arrhythmias Preventice BodyGuardian
Identifies anomalous ECG rhythms and confirms which type of arrhythmia occurred N/A
Smoking Cessation
Chrono Therapeutics SmartStop
Offers programmable, transdermal nicotine replacement therapy in combination with real-‐time behavioral support N/A
Body Temperature MC10 BioStamp
Continuously tracks body temperature remotely; often used for babies N/A
Tips for Medical Wearables Company Engagement
• Focus on end points: Measure objective things that can show a benefit, such as increased cancer patient survival.
• Collect passive data: Consumers prefer not to actively participate in data collection. Use good design: Patients don’t want to be perceived as patients. Integrated
gamification can improve user experience.
3 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
CONSUMER INSIGHTS ON WEARABLES: Improving Consumer Experience Will Drive Sustainable Growth In The Wearables Market
Improving the consumer experience for wearable devices is essential, as the novelty that is currently driving market growth will eventually wane. Integrating wearables into consumers’ daily lives requires finding deeper insights in their feedback.
Find the right level of the learning curve: Installation and setup is still an issue across brands. Fitbit’s early adoption was limited by learning-‐curve estimates.
Design wearables for the right condition: People wear fitness devices outdoors, in the shower and in severe weather. Producers need to design wearables that can withstand all these varied conditions.
Improve usability: Many devices force consumers to adapt to device functions are beyond their needs. This prevents new users from adopting wearables.
Round smartwatches are more popular than square ones: As a result, LG and Motorola Moto smartwatches are better perceived by consumers. Huawei’s new smartwatch is round, and it was the most discussed smartwatch at last week’s World Mobile Congress. The newly released—and square—Apple Watch is expected to face some challenges.
Maintain dialogue with users: Consumers need to receive not only tracking results, but health notifications and recommendations based those results.
Keep up with gamification content: Gamification in fitness can’t keep up with new content, similar to online games. It’s important to maintain engagement.
WHAT’S COMING NEXT?
The FBIC team is going to visit the innovation center of Flextronics in the morning and will attend sessions on the commercialization of technology, emotionally intelligent wearables and international expansion.
4 Fung business intelligence centre global retail & technology flash report: Wearables telcon 2015 Copyright © 2015 The Fung Group, All rights reserved.
Deborah Weinswig, CPA Executive Director – Head Global Retail & Technology Fung Business Intelligence Centre New York: 917.655.6790 Hong Kong: +852 6119 1779 [email protected] Marie Driscoll, CFA [email protected]
John Harmon, CFA [email protected] Amy Hedrick [email protected] Aragorn Ho [email protected] John Mercer [email protected] Stephanie Reilly [email protected]
Lan Rosengard [email protected] Jing Wang [email protected]
