Wearables
9
June 3, 2014 WEARABLES in partnership with: ® EXCERPT FROM THE DIGITAL IQ INDEX ® : WEARABLES TO ACCESS THE FULL REPORT, CONTACT [email protected] © L2 Inc.
-
Upload
zohar -
Category
Technology
-
view
1.491 -
download
2
description
Transcript of Wearables
v
June 3, 2014
wearables
in partnership with:
®
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc.
2June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
wear·a·ble / ˈ / noun
A digital device designed to be carried or worn on a user’s body. It is frequently employed to capture behavioral data, monitor health and fitness metrics, or enhance how the wearer engages with his or her surroundings.
AdornmentIn 2007, a team of archeologists excavating caves in Morocco uncovered perforated seashells dating back 82 thousand years—the earliest known example of jewelry.1 This discovery challenged conventional anthropological theory, suggesting symbolic behavior (i.e., adornment) significantly predated the more complex behaviors (e.g., language, burial rites, arts) that emerged during the Upper Paleolithic age.2
Although the urge to adorn oneself appears engrained in our evolutionary imperative, it is only recently that such accessories offered newfound utility. Low-power chipsets, cheap sensors, and ubiquitous network access—all repercussions of the smartphone wars—established the prerequisites for a new class of consumer device: wearables.3 Overnight, everyday items ranging from bracelets to sunglasses to footwear became untapped platforms for new technology.
Growing PainsIn January, market forecasts pegged 2014 shipments of wearables at 90 million devices worldwide (double the previous year) due to the widening appeal of fitness trackers.4 Three months later, news leaked that the Nike Digital Sport division was halting development efforts on the third-generation FuelBand, exiting the hardware business.5 The shakeup at Nike, a major recall at Fitbit,6 and building backlash against Google Glass7 (see “glasshole”) all underscore an unavoidable question: are wearables the next big thing—or just another fad?
1. “Discovery of the Oldest Adornments in the World,” Science Daily, June 18, 2007.2. “Oldest Known Jewellery Discovered,” Nancy Hynes, Nature, June 22, 2006.3. “Why Wearable Tech Will Be as Big as the Smartphone,” Bill Wasik, WIRED, December 17, 2013.4. “Ninety Million Wearable Computing Devices Will Be Shipped in 2014 Driven by Sports, Health, and Fitness,” Press Release, ABI Research, January 30, 2014.5. “Exclusive: Nike fires majority of FuelBand team, will stop making wearable hardwear,” Nick Statt, CNET, April 18, 2014.6. “Fitbit Force Recall Is Bad News For The Company And Wearable Tech, But Is It Necessary?” Mark Rogowsky, Forbes, March 13, 2014.7. “Does Google Glass Have An Optics Problem? And Does Google Care?” Jeff Bercovici, Forbes, April 22, 2014.
Watch the Video
Sources: ABI Research & MobiHealthNews
Wearables: Global Market by Device Type2014E
0%
0% 100% 200% 300% 400% 500%
10%
20%
30%
40%
60%
curr
Ent
Shar
E o
f w
Ear
aBlE
DEv
icE
Ship
mEn
tS
projEctED growth (2013-2018 cagr)
wearable cameras
wearable cameras
Smart watches
Smart watches
healthcare
healthcare
Sports / activity trackers
Sports / activity trackers
wearable 3D motion trackers
wearable 3D motion trackers
42.64m 7.44m
22.59m
13.61m 0.87m
Wearables: Worldwide Device Shipments by Catergory2014E
Smart glass
Smart glass
2.13m
Smart clothing
Smart clothing
0.72m
3June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
Yin & YangThis lingering uncertainty is traced to a dearth of evidence showing wearables can move outside the fitness category and beyond early adopters. Silicon Valley may be the cradle of innovation, but not style. Likewise, the arbiters of fashion who set trends on the runways of New York, Paris, and Milan are not engineering powerhouses. Acting alone, few brands possess the capital, technical prowess, and culture of innovation necessary to push wearables into the mainstream. Slowly, organizations from both camps are recognizing the futility of going it alone. Nike emphasizes its long-standing partnership with Apple,8 Fitbit highlights its collaboration with Tory Burch,9 and Google’s latest Android Wear announcement singles out Fossil as a future channel partner.10 The ability of brands to develop effective partnerships that bridge function and fashion will determine the route of a potentially large, but abstract market (reaching upwards
of $30-$50 billion over the next 3-5 years).11
L2 IntelligenceThroughout human history, adornments have been employed to signal style, affluence, and desirability. Select prestige brands are now positioning themselves to endow wearables with the qualities these devices desperately lack. This primer profiles key data and insights into the role wearables may play in a direct-to-consumer strategy. Like the medium we are assessing, our approach is dynamic. Please reach out with comments to improve our methodology and findings. You can reach me at [email protected].
8. “Why can Nike dump the Fuelband? With friends like Apple, it doesn’t need its own hardware,” Kif Leswing, Gigaom, April 21, 2014.9. “Announcing the Tory Burch for Fitbit accessory collection,” Fitbit Blog, February 4, 2014.10. “Google’s Android Wear project adds HTC, LG, Motorola, Qualcomm, Fossil and more for new smartwatches,” Joseph Volpe, Engadget, March 18, 2014.11. “The Future of Wearable Technology,” Ashley Kindergan, Credit Suisse, April 7, 2013.
Sources: Annual Reports, Bloomberg, Forbes, Press Mentions, strategy&
Wearables: Silicon Valley vs. Madison AvenueProfile of Positioning & Resources Required to Drive Mainstream Adoption
aapl:us$538B market cap14.9 p/E ratio$3.4B r&D spead2.7% of revenue
“iWatch” rumors resurface in February 2013 following a supplier report in the China Times
goog:us$382B market cap30.5 p/E ratio$6.8B r&D spead13.5% of revenue
Android Wear SDK released in March 2014; Google Glass enters “open beta” in May 2014
December 2013 reports suggest “Father of Xbox Kinect” moving on to develop Windows wearables
msft:us$331B market cap15.0 p/E ratio$9.8B r&D spead13.3% of revenue
005930:Ks$203B market cap25.2 p/E ratio$10.4B r&D spead5.8% of revenue
Announces Galaxy Gear 2 smart watch in February 2014; Galaxy Glass coming in September 2014
intc:us$134B market cap14.4 p/E ratio$10.1B r&D spead19.0% of revenue
CES keynote in January 2014 used to announce focus on wearables and debut Intel Edison “system on a chip”
®
nKe:us$67.2B market cap25.7 p/E ratio
Launched Nike+iPod in May 2006; laid off as many as 55 of the 70- employee FuelBand team to focus on Nike+ software in April
lux:im$27.1B market cap36.4 p/E ratio
Announced strategic partnership with Google in March 2014 to make Glass “fashionable”
madison avenue
silicon valley
brby:ln$11.3B market cap20.7 p/E ratio
Former CEO begins work at Infinite Loop (Cupertino) in May 2014
private$4.6B in revenue—
Partnered with Philips in July 2000 for the first electronic clothing (ICD+ jacket)—ahead of its time?
private$800m in revenue—
Announced “Tory Burch for Fitbit” accessories for SS14 season at CES
Scott GallowayFounder, L2
4June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
Sources: Catalyst
Wearables: Global Shipments of Wristband Devices2H 2013
Wearables: Major Barriers to PurchaseLeading Reasons Cited by U.S. Consumers, October 2013
Source: TNS Global (n=1,000 U.S. consumers)
EXPENSE
PRIVACY
LOOK
COMFORT
HEALTH RISKS
54%
31%
13%
13%
10%
OTHER OTHER
58%
21%
14%8%
FITNESS TRACKERS SMART WATCHES
54%
19% 16%11%
Internet Devices: Forecast of Global Install Base2004-2018E
Sources: Business Insider (IDC, Strategy Analytics, Machina Research)*IoT: Everyday objects (e.g., refrigerators, door locks, thermostats) equipped with Internet or M2M connections, allowing them to relate not just to the user, but other sensors/inputs within the immediate vicinity.
Wearables: Forecasts for Global Device Shipments2010-2018E
Source: Business Insider (ABI Research, IMS Research, Juniper Research)
DEVI
CES
IN U
SE (B
ILLI
ONS)
2004
2
4
6
8
10
12
14
16
18
20
2006 2008 2010 2012 2014E 2016E 2018E
WEARABLESSMART TVS
TABLETS
SMARTPHONES
PERSONAL COMPUTERS
INTERNET OF THINGS*
2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E0
50
100
150
200
250
300
250
DEVI
CES
SHIP
PED
ANNU
ALLY
(MIL
LION
S)
REST OF WEARABLESMARKET
FITNESSTRACKERS
SMART WATCHES
5June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
sm a r t watch e s
inf ota inme n t
october: 3 years after debut at the TechCrunch50 conference, Fitbit Ultra activity tracker launches as clothing clip-on
november: UP expands Jawbone offering beyond headsets and speakers, emphasizing social elements
december: Jawbone CEO acknowledges product defects, instituting a “no questions asked” refund policy
november: UP24 overcomes last year’s launch woes, adds wireless connectivity
november: Nike launches “SE” FuelBand models, which enable continuous syncing and hourly motivational reminders
september: Samsung debuts $299 Galaxy Gear alongside new tablet devices
october: Reports circulate that Galaxy Gear’s return rate tops 30%
november: Samsung reports 800k units sold in two months
december: FCC product filing suggests SW3 launching in 2014
summer: Glass pops up everywhere from live surgery to protest coverage to a Bon Jovi concert
september: Glass featured across 12-page “Futuristic Vision of Fashion” editorial in the September issue of Vogue
october: Upgraded Airwave 1.5 launched with better iOS Android integration and longer battery life
october: Glass road show begins—ironically; first person ticketed for driving while under the influence wearing Glass
January: FuelBand goes on presale online, expanding on established Nike+ ecosystem
february: FuelBand goes on sale in the U.S. at Nike and Apple stores
april: Aria “smart scale” accessory introduced, adding weight and BMI tracking to pedometer data over Wi-Fi
september: Fitbit One and Fitbit Zip become first wearables to leverage Bluetooth 4.0
January: Android-based SmartWatch announced at CES as part of “Smart Extras” product suite
april: SW1 goes on sale in the U.S. for $150
april: Launches Kickstarter campaign, raising over $10M from nearly 70k backers in one month
april: “Project Glass” formally announced; Sergey Brin sports headset at Fighting Blindness charity event
June: Initial signup for developer kits offered at Google I/O conference ($1500 price tag)
september: Oculus Rift raises $2.4M on Kickstarter to fund development kits
september: Glass graces the DVF runway during New York Fashion Week
october: “Airwave” ski goggle featuring Recon Instrument’s MOD heads-up display goes on sale in the U.S. ($600)
January: Nike launches “METALUXE” collection, catering to style-conscious FuelBand fans
January: Partnership with Tory Burch announced
february: Fitbit Force issues voluntary recall due to reports of skin irritation
april: Launches Innovation Lab in San Francisco as rumors suggest shifting focus from hardware to software
January: Announces next-gen “Steel” at CES ($100 price increase)
february: 1000+ apps now available for device
february: Garmin announces support for Xperia devices, including SW2 integration
february: Gear 2 and Gear 2 Neo announced at Mobile World Congress (less than 6 months after first gen)
January: Google announces “Titanium Collection” frames for Glass
february: Google publishes etiquette guide for Glass; Kenneth Cole becomes first major brand to experiment with Glass app via “Mankind” campaign
february: Facebook announces agreement to buy Oculus VR for $400 million in cash and $1.6 billion in stock
January: Nike opens API developer portal to drive digital sports innovation
march: 10 startups selected to participate in 12-week Nike+ Accelerator program
may: Fitbit Flex evolves sensor from clip-on to wristband device
october: Fitbit Force adds display into wristband model
January: Begins mass production, four months behind target release
may: PebbleKit SDK released
June: SW2 unveiled featuring water-resistant screen and near field communications (NFC)
July: Confirms 85k units sold
september: SW2 goes on sale for $200
february: “How it Feels [through Google Glass]” video racks up 25M views; expands Explorers promotion with #ifihadglass campaign
april: “Explorer Edition” of Glass starts shipping, third-party apps slowly expand
may: Google announces it will not approve apps that use facial recognition without “strong privacy protections in place”
June: 1080p version of Rift shown at Electronic Entertainment Expo (E3)
august: Legendary game designer John Carmack (id Software) joins Oculus as CTO
march: U.S. head of Sony Mobile suggests in interview that SW3 will shun Android Wear for a customized platform
may: Rumors emerge that Samsung will release a Glass competitor in September
march: Partnership with Luxottica announced to offer additional frame designs
may: Officially available to general public for $1500; Ivy Ross (Calvin Klein, Coach, Gap) becomes new head of Google Glass
may: ZeniMax Media files lawsuit alleging Oculus unlawfully exploited intellectual property
Wearables: Major Developments by Use Case2011–2014 Chronology
fitbit Jawbone up nike+ fuelband
sony smartwatch samsung galaxy gear pebble
google glass oakley airwave oculus rift
Sources: CNET, Glass Almanac, Mashable, The Guardian, Wired
f it ne s s t r ack e rs
6June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
Homegrown EffortsKickstarter is often touted as an incubator for wearables—a
reputation gained from high-profile success stories including
the Pebble smart watch (May 2012)12 and the Oculus Rift
virtual reality gaming headset (September 2012).13
There are nearly 50 Kickstarter campaigns that reference
“wearables” (versus 4,423 categorized as “technology”). The
average wearables campaign receives 399 percent of its
funding goal—a statistic that obscures the wide gap between
winners and losers on the platform. On average, successful
campaigns receive 692 percent of their initial goal ($54k)
versus only 14 percent for failed campaigns ($80k).
Ultimately, only six in 10 wearable projects achieve their
funding target. Success rates are picking up as the catergory
achieves traction, with nine funded campaigns in the first half
of 2014—the best yield since 2011. However, mimicry persists
among crowd-sourced initiatives. Seven of the top 10 projects
in terms of funding are all variation on the smart watch theme.
12. “Pebble Smart Watch Delivers on Kickstarter Promise and More,” Christina Warren, Mashable, August 31, 2014.13. “Oculus Rift: From $2.4 million Kickstarter to $2 billion sale,” Richard Mitchell, Joystiq, March 28, 2014.
$10,266,845
$100,000
PebbleEnded May 18, 201268,929 backers
10,267%
$2,437,429
$250,000
Oculus RiftEnded Sep 1, 20129,522 backers
875%
$264,527$80,000
EMBRACE+Ended Jun 9, 20134,474 backers
231%
$143,377$100,000
WoojerEnded Dec 6, 20131,710 backers
43%
$1,032,352
$100,000
Omate TrueSmartEnded Sep 20, 20134,378 backers
932%
$1,012,742
$100,000
AGENTEnded Jun 20, 20135,685 backers
913%
$801,224
$100,000
Neptune PineEnded Dec 21, 20132,839 backers
700%
$616,231
$150,000
HOT WatchEnded Sep 7, 20134,141 backers
311%
$309,393$100,000
MetaWatch STRATAEnded Aug 20, 20121,767 backers
209%
$305,393$150,000
cookooEnded Jul 7, 20122,560 backers
104%
Kickstarter: Top 10 Wearable Projects by Total PledgesMay 2014
Initial Goal Total Pledges Percent Overfunded
active “wearable” proJects
proJects by year
most common locations
average # of bacKers
average goal
57% funded
2011 7 57% funded
2012 9 44% funded
2013 15 40% funded
2014 13 69% funded
22% san francisco18% new yorK14% los angeles
44
2,314
$65,304
7June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
Click logo to return here.Click to jump to: 5
6
Data sPotLiGht
keY finDinGs6 Typology
7 Chronology
8 Homegrown Efforts
9 Major Platforms
10 Channels
11 Impact
L2 team
aBoUt L2
first moVers13 Accessorizing Existing Tech
14 Intel Inside®
15 Power Play
16 Connected Cars (Version 2.0)
17 Wearable Advertising
18 Enhancing Customer Service
19
20
12
8June 3, 2014
L2 inteLLigence report wearables
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
© L2 Inc., 2014 Circulation of the report violates copyright, trademark and intellectual property laws.
ReSeARCh
Digital IQ Index®: The definitive benchmark for online competence, Digital IQ Index® reports score brands
against peers on more than 850 quantitative and qualitative data points, diagnosing their digital strengths
and weaknesses.
Intelligence Reports: Intelligence Reports complement L2’s flagship Digital IQ Index® with a deeper dive
on platforms or geographies of future growth. Critical areas of investigation include: Mobile, Video, Emerging
Platforms, APAC and Brazil Russia India.
L2 Collective®: Series of benchmarking reports designed to help member brands better understand
resources, human capital, budgets, and priorities supporting digital strategies.
eVeNTS
Forums: Big-picture thinking and game-changing innovations meet education and entertainment.
The largest gathering of CPG executives in North America.
300+ attendees
Clinics: Executive education in a classroom setting with a balance of theory, tactics,
and case studies.
120 –180 attendees
Working Lunches: Members-only lunches led by digital thought leaders and academics.
Topic immersion in a relaxed environment that encourages open discussion.
40–80 attendees
MeMBeRShIP
For membership info and inquiries: [email protected]
L2 business intelligence for digital.
We are a membership organization that brings together thought leadership from academia and industry to drive digital marketing innovation.
Upcoming Events
BReAKFAST & LUNCh: WeARABLeS
June 03, 2014 · New York
BReAKFAST: MOBILe & TABLeTS
June 03, 2014 · London
LUNCh: MOBILe & TABLeTS
June 04, 2014 · Paris
BReAKFAST: MOBILe & TABLeTS
June 06, 2014 · Geneva
CLINIC: SOCIAL IS MeDIA
June 12, 2014 · New York
BReAKFAST: OMNIChANNeL
June 25, 2014 · New York
Upcoming Research
DIGITAL IQ INDex® RePORTS:
Hotels
Auto
Departments Stores
L2 INTeLLIGeNCe RePORTS:
Amazon
Omnichannel Retail
Social Platforms
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
vContact Info:
155 Wooster Street, 2nd Floor New York, NY 10012
L2ThinkTank.com [email protected]
© L2, Inc. 2014 Reproductions Prohibited This report is the property of L2, Inc. No copyrighted materials may be reproduced, redistributed, or transferred without prior consent from L2. L2 reports are available to L2 Members for internal business purposes.
ExcErpt from thE Digital iQ inDEx®: wEaraBlES to accESS thE full rEport, contact [email protected]
