SMART WIRELESS DEVICES & THE INTERNET OF ME

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1 SMART WIRELESS DEVICES & THE INTERNET OF ME Whitepaper

2 1 1.1 Introduction Since the conception of the Web, Internet-connected devices have expanded in every conceivable direction, from phones to absent computing in the cloud. Cloud computing, in particular, has enabled the growth of the Internet of Things in the last few years, allowing devices to receive and transmit data. Since the introduction of a common standard for low-energy communications began in the mid 2000s and became ever-more common and efficient, we are now moving beyond the Internet of Things to devices which become part of consumers personal space when they are used. This is the Internet of Me. The development of the smartphone/app store model has created an ecosystem of applications, within which hardware peripherals can enhance the smartphone s functionality for specific purposes. This section introduces the concept of the smart wireless device, which is central to this research and developed in subsequent sections. It also highlights current use cases for these devices in each of the segments identified opposite. Smart hardware accompaniments to the smartphone have only been possible since the arrival of the iphone created the app ecosystem necessary for their development. They only became practical even more recently as a critical mass market makes it worthwhile to develop such devices. However Juniper Research believes that the smartphone, furnished with a relevant app, is set to become a means of linking external devices and peripherals to the cloud, thereby forming a central point for a WPAN (Wireless Personal Area Network) 1 which connects to a wide range of apps, web-based portals or cloud-based applications. Examples include a connected blood pressure monitor, a remote baby alarm linked to the mobile network and a payment reader hardware add-on. The coming together of smart hardware and companion apps represents a further enhancement of the app ecosystem and one without excessive development costs. 1.2 Terminology Smart Wireless Accessories Juniper refers to an app-enabled computing device (that is a device which accepts input and processes that input) that form part of a WPAN as a smart wireless device. Typically, although not always, the connectivity of this network is enabled through a mobile computing device, such as a smartphone. A smart wireless device can often be understood as a piece of hardware which links to a mobile device, often via a short-range wireless technology such as Wi-Fi or Bluetooth. The device will typically have an associated app, which will add value to the data received from the hardware device. In addition, data may be uploaded to an online portal where data analysis and presentation may take place. 1 Juniper Research defines a PAN as a computer network organised around an individual person. This covers devices and connections under the purview of Task Groups 1-4 of IEEE , as well as including BANs (Body Area Networks), covered under Task Group 6 of IEEE For further clarity on this issue, please see section 1.3 and figure 1.1

3 Smart Wearable Devices Figure 1: Smart Wireless Devices and Smart Wearables Overlap The wearables market is a subset of the wireless devices market that has gained a large amount of industry attention. Juniper defines a smart wearable device as an app-enabled computing device (that is a device which accepts input and processes that input) which is worn on, or otherwise attached to, the body while being used. In most cases a wearable device is also a fashion accessory. Most wearable devices are always on and accessible at any time, with a constant interaction between the user and the device. Smart Wireless Devices (WPAN) Smart Wearable Devices (BAN) This definition covers a wide range of devices from watches to displays which can either work independently or in conjunction with an external platform, such as a smartphone or tablet. Source: Juniper Research 1.3 Use Cases Consumer Electronics Smart Wireless Accessories The combination of smart mobile devices equipped with intuitive touchscreen interfaces, with the onset of readily accessible consumeroriented apps, means that it has become relatively straightforward for consumers to understand the whole connected devices concept. CE smart wireless devices have emerged for a variety of use cases ranging

4 3 from baby monitors to games controllers, smart video eye-wear to intelligent key fobs. Figure 2: Square Stand and Chip Card POS Accessories Even in the wearables space, there are sharp divisions on where different devices are positioned and used. Consumer smart glasses and many multimedia devices (such as the Oculus Rift headset and Samsung s Gear VR) emphasise an immersive experience, grounded in AR, while smartwatches emphasise data tracking and the convenience of not using a smartphone for many tasks. However, there may not need to be a single unifying use case due to the nature of the smartphone has an everything device. 2 The ability of smartphones to incorporate device functionalities as apps is both a risk and an opportunity for the smart wireless device market. On the one hand if a device is too dependent on app functionality it could potentially be displaced by app-only offerings (as is the case with more basic fitness tracking devices), but the flexible app platform accompanied by uniform connectivity technologies means that it is easy for consumers to incorporate peripherals into their lifestyles in a way that would not be possible if they were interacting with the device alone Payment Smart Wireless Devices Payment smart wireless accessories have seen the strongest take-up among small and medium-sized businesses. Many of these businesses do not necessarily have the outlay for dedicated POS (point-of-sale) hardware, but still need the functionality to process payments in a similar manner. Source: Square The combination of digitisation of the POS mechanism, but not necessarily the payment, opens an opportunity for vendors of POS hardware to convert their existing payment products into smart wireless devices that link up with these app-based platforms via a mobile POS device. This is already being done by some mobile payment solution companies. For example, Square allows a devices to be connected to a range of existing POS hardware, as well as enabling a tablet to become a POS hub through Square s own payment hardware Fitness and Healthcare Smart Wireless Accessories While the functionalities of fitness and healthcare devices were, for much of 2013 and 2014, becoming one of positioning more than technological capabilities, the FDA (Food and Drug Administration) draft guidance issued on Low Risk General Wellness Products released in January 2 Mark Shedd, Director of Snapdragon Marketing at Qualcomm, speaking at Qualcomm Technology Update event in December 2014

5 has reinforced this difference to the point where they will need to be considered as separate categories in future, as use cases and components between the 2 device types begin to diverge. i. Fitness Accessories Fitness trackers have been around for several years now and are the most widely used wearable devices, with no sign of the number of available devices stopping yet. Consolidation is to be expected in this market due to the wide range of similar devices, as well as smartwatches that are able to offer many of the same measurements, although the range of price points available is unlikely to change and thereby continue category growth. The key to unlocking this use case is understanding how the data generated by the wearable can be used to drive a benefit for the consumer. The exact nature of the niche needs to drive this benefit and will differ again depending on the type of target the benefits apply to. Corporate wellness programmes used to reduce health insurance costs need to be focused and understood by the company buying into the programme, as well as the employees with the devices on their bodies. This targeted use of the data, as well as much of the value deriving from long-term usage, means that simple consumer-facing devices that track basic metrics face an uncertain future. With multiple studies showing high abandonment rates and basic functionalities increasingly being integrated into smartwatches and more complex fitness devices, device vendors will have to rely on either more innovative software to drive engagement beyond mere measurement. ii. Healthcare Accessories Beyond the mere quantification of biometric data, many traditional medical devices are becoming digitised. These typically track metrics such as heart rate, sleep patterns and activity levels in much the same way as fitness trackers, but also track more specialised outputs. This is primarily about connecting devices to enhance preventative care, as part of an effort to help healthcare providers reaching crisis stage in care delivery. Figure 3: ihealth Wearable Pulse Oximeter Source: ihealth 1.4 Market Forecast Summary Given the current trend towards hardware homogenisation and market saturation in the consumer space, it is likely that the more advanced consumer smart wireless devices will gravitate towards a freemium model, providing devices and basic services for free, while monetising advanced features and interactions.

6 5 The segments currently gaining the most traction for this model are healthcare and fitness devices. Juniper Research expects 12.9 million users to be engaged with these paid-for service platforms by 2019, with developed markets with large healthcare infastructures taking the majority of unit sales. Fitness services are increasingly focusing on the meaning behind the data, rather than simple data tracking itself. We do not expect data-driven premium analytics to gain much traction with consumers, as there are already many free analytics platforms available. Figure 4: Service Revenue from Health and Fitness Smart Wireless Devices ($m) Split by 8 Key Regions in 2019: $1.8 billion Source: Juniper Research

7 6 Order the Full Research Smart Wireless Devices: CE, Enterprise, Fitness, Healthcare, Payments Juniper s Smart Wireless Device research is the only service providing end-to-end analysis for this new and fast moving device ecosystem. The research maps the future path for app enabled peripherals, providing a complete assessment for 5 device segments: consumer electronics, fitness, healthcare, payments and enterprise. Key Features Evaluates the development of the smart wireless devices ecosystem, on a market-by-market basis. Provides expert analysis of the relevant business models identifying how these disparate markets are being monetised. Includes interviews with leading players across the value chain, such as CSR, ihealth, Square, Ubimax, and Vuzix. Details a capability and capacity assessment for key players, together with a vendor market positioning matrix and Belbin Analysis. The Interactive Forecast Excel (IFxl) Over 7,000 data points in 74 tables. Country level data splits for: Canada, China, Germany, Japan, South Korea, UK and US, as well as 8 key regions. Segment splits by consumer electronics, fitness, healthcare, payments and enterprise. A what-if analysis tool that allows users to manipulate Juniper s market and forecast data for 13 different metrics. The PowerPoint Slide Set Key market trends, cross-segment drivers and constraints. Forecast methodology. Key forecast commentaries. Publications Details Publication date: March 2015 Author: James Moar Contact Jon King, Business Development Manager, for more information: Juniper Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG21 7QW UK Tel: UK: +44 (0) / USA: (International answering service) Fax: +44(0)

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