opportunities and challenges - trendforce
TRANSCRIPT
Opportunities and Challenges
of Wearable Devices
June.5, 2015
Jason TsaiIndustry Analyst
4 June 2015 | Page 2
Prologue
Market & Consumer Survey
Trend & Dilemma
Summary
Outline
4 June 2015 | Page 3
It started from here…..
Wearable devices are becoming more popular
4 June 2015 | Page 4
People Became Excited about Wearable
Response %
Watches 30%
Clothing 22%
Glasses 19%
Shoes 9%
Jewelry 9%
Other 1%
None/nothing 8%
Don't know/refused 1%
Quick Facts
Exited about wearable tech(net) 91%
Source：Wakefield Research，2013
.Wearable devices will replace smartphone in 3-4 years.
Total shipment will reach 485 million units in 2018.
~ABI Research,2013
Wearable Research in U.S.
4 June 2015 | Page 5
Manufacturers were over-optimistic about
the wearable market
0
100
200
300
400
500
600
2012 2013 2014 2015(E) 2016(F) 2017(F) 2018(F)
2013Forecast
2015forecast
Over-optimistic in 2013
(Million Units)Worldwide Wearable Consumer Electronics Forecast
We know it’s an important future market
4 June 2015 | Page 6
Prologue
Market & Consumer Survey
Trend & Dilemma
Summary
Outline
4 June 2015 | Page 7
What are Consumers Thinking About
70%of U.S. consumers
have heard of wearable devices
But only
15%of them used
wearable devices
84%of respondents currently don’t
have any wearable devices
42%Users gave up using
the wearable devices within
60 days
23%people are likely to buy
a smart watch in the future
Most people have heard about the wearable device but only a few of them actually use it regularly.
4 June 2015 | Page 8
Shipment of smart watches will surpass
fitness bands in 2015
(Million Units)Smart Watch & Band Shipments
0
25
50
75
100
2011 2012 2013 2014 2015(E) 2016(F) 2017(F) 2018(F)
Smart Watch
Smart Band
Sports & fitness bands
Apple Watch
4 June 2015 | Page 9
Apple will dominate the smart watch market
(Million Units)
2012 2013 2014 2015(E) 2016(F)
Non-Apple brand 0.33 2.82 6 11 15
Apple Watch 0 0 0 15 26
0
10
20
30
40
50
4 June 2015 | Page 10
Prologue
Market & Consumer Survey
Trend & Dilemma
Summary
Outline
4 June 2015 | Page 11
With many uncertainties in the wearable market, enterprises are following Apple’s steps to avoid major risks.
Waiting for Apple to Become the Beacon
4 June 2015 | Page 12
Because it did not introduce any new hardware.
Apple Watch will be hard to imitate
Material
Case Aluminum、Stainless steel、18-karat gold
Cover Ion-X glass、Sapphire
Back Composite materials、Ceramic
Band Fluoroelastomer、Stainless steel、Leather
Clasp Stainless steel、18-karat gold
Hardware Spec
Display AMOLED
SensorsAccelerometer, gyroscope, ambient light sensor, and heart rate sensor
Connections Wi-Fi and Bluetooth 4.0
Other Speaker and microphone
Not much difference
4 June 2015 | Page 13
Wearable Device is Just a Springboard
4 June 2015 | Page 14
It’s Two-Part Tariff
Platform
Publisher
Content Provider
Brands
Makers
Platform
Publisher
Content Provider
Brands
Makers
Hardware
Software
100
100
>100
<100
Devices’ price down
Raise ARPU and pay ratios30
45
25
30
10
4 June 2015 | Page 15
Monkey and Banana Problem
The most important thing is The Monkey Wants to Eat Bananas, so he Use the Chair and Stick to get banana.
4 June 2015 | Page 16
Just like jamming wares in warehouse. The limited power cannot support the complex functions and applications of the wearable devices.
Power consumption is a big issue of
wearable devices
4 June 2015 | Page 17
Two possible solutions
◊Increase the capacity(Power)
◊Limit the components and applications
So How Can We Solve This Problem?
Yet it’s hard to have a breakthrough technology in the coming years.
But consumers always want better specs and as much functions as possible..
We should change consumer behavior. And that's what Apple is doing NOW.
4 June 2015 | Page 18
If you use wearable devices the same way you use your phone, the power will not able to last long.
Information explosion led people to become attached to their phones without knowing that most of the information received is not important.
How often do you check your phone?
Information Explosion Devices Users
filter
Makes the information valuableSaves power
4 June 2015 | Page 19
When we change consumer behavior, the new behavior will create new business opportunities.
And it's an incentive to make them change by providing more convenience.
Changing behavior by offering more
convenience
Can be used to board planes and unlock the hotel room
4 June 2015 | Page 20
Prologue
Market & Consumer Survey
Trend & Dilemma
Summary
Outline
4 June 2015 | Page 21
There are Two Questions
Why should I buy this?
How to make people buy the wearable device and use it
regularly?
4 June 2015 | Page 22
What Benefit Does It Provide to Me
It has AMOLED display , Memory, 1.9M camera ,
Wi-Fi… etc
It can detect your sleep habit then improve your
quality of sleep.
Which one?
4 June 2015 | Page 23
Having people to buy the wearable devices is just the first step towards the success. How to make people adopt them into their daily lives is the real challenge.
Two Barriers to Wearable Device
Topicality
Lower Price
Brand Value
AppearancePurchase
First Barrier
Regular usage
Second Barrier
Value in use
Convenient Services
4 June 2015 | Page 24
Trend 1:
Apple will dominate the market in coming years, and change the competitive advantage from hardware to software (services).
Trend 2:
Major profits will be generated from selling services instead of the hardware.
Trend 3:
Wearable device is just a springboard. The key point is not what the enterprises do with the devices but the collateral services that are provided by the devices.
Trend 4:
By offering more convenience, new business opportunities will arise from the change of consumer behaviors.
Summary
4 June 2015 | Page 25
Thank You