the smartwatch François Thénoz – Orange

3rd July, 2014

2 Smartwatches presentation – 3rd July, 2014

3 smartwatches (under Android Wear)

LG G Watch 270$ (for sale from July 2014)

Samsung Gear Live Smartwatch 270$ (for sale from July 2014)

Moto 360 (for sale from summer 2014)

3 Smartwatches presentation – 3rd July, 2014

Apple iWatch rumor

when? sept/oct 2014

price? 299$

target? health + smart home

features? two sizes

curved OLED screen

no SIM,

iBeacon,

SIRI,

wireless battery refill,

10 health sensors

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hybrid watches: mecanic + digital

VCXO mecanic + GPS only in gold version, 41,000 $

Kairos mecanic + digital glass from 499 $ to 1,199 $

5 Smartwatches presentation – 3rd July, 2014

2 watches with SIM embedded

from 600 $ to 1000 $ (without telecom subscription)

320 $ (without telecom subscription)

(Canada)

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a healthy market… 56 G$ in 2013e expected to grow at a 6% CAGR over the next 6 years subdivided:

• 66% of the market quartz • 34% mechanical

15% of quartz watches are digital (digital =10% of global watch sales). geographical growth: • main target: emerging markets • declining share: “developed markets” (USA only 13% of the market)

the Watch Industry Market

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the rising proliferation of devices

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miniaturization still ramping up

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the rising proliferation of sensors

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sales of “connected objects” will follow 3 phases (source Strategy Analytics)

fitness wearables dominate in 2013 86% of sales

watches rise to power in 2014 25% of sales

and watches dominate in 2015 with glasses rising to power beyond that 65% of sales in 2018

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key trends for “Wearables”

1.Hardware/component innovation: Significant improvements in low power connectivity, sensors, battery life, interfaces (touch and voice) and displays + NFC + biometry recognition + GPS + Sapphire Glass

2.Software Ecosystem: Benefit from the smartphone trend. Dominance of Android and iOS place GOOG and AAPL in the pole positions to leverage this new opportunity

3.Business Model Leverage: Wearables push for deeper customer engagement : new applications such as mobile payments, medical monitoring, e-commerce, location based services, …

4.Conclusion: Wearables will have the potential to add context to location – greatly deepening our understanding of how we interact with our surroundings

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future smartwatch pricing will be key

13 Smartwatches presentation – 3rd July, 2014

actors present in the smartwatch market

traditional ones new ones IT sector ones

Tag Heuer Pebble Motorola

Swatch Vertu LG

Fossil Withings (weighing scale, Wearables including the hours)

Samsung

and many start-up…

Apple

Sony

Asus

Microsoft

Corning Broadcom Google, Apple leaders

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• increasing adoption of Wearable technologies will shift spending dollars away from global watch sales • new technologies have the potential to:

(1) replace watch functionality

(2) take up scarce wrist real estate

(3) become watch-alternative status objects for consumers • particular exposure for sub-500 $ fashion watches, one of the fastest growing categories in the global watch market > Some risks for companies like Fossil who have specialized in this market niche

risks for the Watch Industry Market

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sizing the opportunity – bigger than you think

the consumer electronics market $ 690 bn

PCs, Tablets, Smartphones markets $ 380 bn

the current watch market is approximately $ 56 bn

the current market for sunglasses is $ 20 bn

the entire fitness/health Wearables market is $ 2-3 bn (estimates: $42.5bn total addressable market over the next 3-5 years)

nota: analyst iWatch simulation: 40 millions units / 10 G$ in 2015

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conclusion

smartwatch is opening a new market, part of the “connected world”

few traditional watch players will compete in this market (not in their DNA)

potential success for “hybrid watches” (like Toyota for hybrid cars)

3 clear immediate winners: Apple, Google and Broadcom

pending question: consumer adoption rate? (size / price / life-time)

sensors will proliferate and will impact many industries (new digital growth territories: smart cities, IoT, financial services, health…)

new business models may appear: insurance industry subsidies? (first examples in the USA and Axa)

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the Wrist future is bright (gesture, payment, context…)

think like Disney (imagarium)

Wrist reconquest smart watch is a first step… from glove to Wrist interfaces

thanks