If 2013 was the year of tablets, then 2014 seems to be the year of wearables, as was made clear at last month’s Consumer Electronics Show and this month’s Mobile World Congress. There are increasing numbers of wristbands for fitness and wellness from tier 1 and 2 mobile phone makers, for example Huawei’s Talkband (a bluetooth ear bud and fitness tracker on wrist), Sony’s SmartBand (equipped with a camera), and Alcatel’s OneTouch BOOMband (similar to Talkband, but with no display). However, the most talked about wearable devices at MWC 2014 were the Gear2, Gear2 Neo, and Gear Fit from Samsung.
Similar to its approach to the mobile phone market, Samsung started its wearable business with one device, Gear, released in September 2013. The company studied early adopters, using feedback to generate ideas for product improvements, and started a segmentation process to address the whole market. Out of this came the premium smart watch Gear 2, the high end smart watch Gear2 Neo, and the specific purpose wearable device, Gear Fit. All three models include a heart rate monitor (as does the Galaxy S5).
Samsung took this opportunity to integrate its own component/supporting platform in the products, such as the Super AMOLED displays on Gear2 and Gear2 Neo and the Tizen OS (taking advantage of the fact that Android has not yet gained acceptance in this market) adopted by Gear2 and Gear2 Neo. The new Gear products only work with a few Samsung smartphones at present, and the management app can only be downloaded via the Samsung app store. This makes the Gear ecosystem a closed environment; Samsung appears to be trying to use wearable products to augment their smartphone experience and lock in consumers future smartphone purchases.
As wearable devices start to emerge from infancy, and as exciting new features are developed and introduced, the question arises as to the evolution of competition – will there be many competitors or a high level of concentration? What will be the winning business models?
At the Mobile World Congress, InvenSense, a MEMS sensor vendor, announced its wearable turnkey sensor platform solution, which aims to shorten time-to-market for brands and OEMs. The solution is a reference design that includes motion sensors (accelerometer and gyro), a pressure sensor, a microcontroller unit (MCU), and Bluetooth Low Energy (BLE) in a very compact module.
With all the sensors in the reference design, product developers can make more sophisticated devices to address various needs. In the current market, low-end wearables only have accelerometers. Mid- to high-end wearables have at least gyros for step counts with calibration. Since calorie counts differ by type of activity and differences in terrain and altitude, pressure sensors coupled with motion sensors can calculate more reliable data.
A reference design like InvenSense’s solution lowers the barrier for new entrants and enables late entrants making wearable models in a more timely manner and focusing on other important activities such as company strategy, marketing, finding channel and retail partners. Wearable devices are likely to become increasingly competitive in the near term and be similar to smartphone market in two respects:
- multiple segments for various purposes and price range
- differentiation in design, device UI, services and other features
Who will come out as the winner in this technology? At the moment, Samsung seems to be the front-runner in terms of product design and features. The company has an advantage over its competitors due to its vertical integration, strong brand name in smartphones and mobile devices, and capacity and capital to design various product lines and see which one sticks. This is a unique ability which has served the company well in CE and mobile. This is an important dynamic that will face other market entrants.
The topic of wearable devices will be the topic of the final session 8 of USFPD Connected Devices: Performance vs. Convenience, next week in Santa Clara, CA.