External Trends for the Wearable Market

Abundance of Opportunities for Growth

About Me - Product Skeptic● Seven years in the Wearable Device / Fitness/ Wellness Space.

○ Moderating 3 panels at the Wearable Tech in Sports Summit● NeuroSky, Jaybird, iWinks, Motorola. ● Serious competitive amature cyclist for ~ 5 years. ● Notable Projects

○ Jaybird Reign ○ iWinks Aurora○ MotoBody/Moto360 2nd Gen

Agenda● Trends ● Precision Data● Wellness● Medical ● Form Factors

3 topics not covered in-depth:○ Smart Watch / Fashion Market ○ Non-Invasive Glucose Monitoring – Early development stages

– though coming. ○ Virtual / Augmented Reality – Waiting for traction / killer

application.

TrendsOpportunities Abound

Trends – Opportunities ● We are on path for wearables to become ubiquitous - blending into

our environment. ● Expectation of a proactive, accurate, contextual, personalized,

holistic data experience.○ We participate in more than one activity experience throughout

a given year. ○ I did 10k steps, now what?

● Awareness with the holistic effect of stress on our bodies and mind.

Trends – Opportunities ● Food

○ Transparency with our food both ingredients and source.○ Pull method for acquisition via mobile experience.○ Social connection.

● Preventative expenditure due to soaring healthcare costs.● Desire to control of our healthcare experience.● Expectation wearable data will be accepted and used by medical

community to assist with diagnosis.

Trends - Threats● Speed of the market.

○ Crowdfunding and Mobile Application distribution model is moving wearables at an extremely fast rate.

Precision DataCritical for Future Success & Survival

Algorithms - Critical Strategic Importance ● Aggressively seek to accumulate as many activity, health, wellness and

contextual related algorithms as possible, either by internal development, acquisition or third party partnership. ○ Granularity is key. ○ Additional algorithms enhance Insight Engines for deeper interaction.

● Opportunity to increase revenue stream from software. ■ Strengthen mobile application experience.■ Entry point for mobile advertisement. ■ Reduce dependency on hardware development life cycle and

seasonal buying. ● Mitigates risks of a fast moving market. Today the wrist - tomorrow?

Power - Personalized and Insightful● Power is an objective measurement providing a personalized, accurate &

contextual experience. ○ Steps & Heart Rate are both subjective exertion measurements.

● Precision Calorie expenditure - 4.18 kilojoules = 1 kilocalorie. ● Allows for flexibility to meet User’s contextual requirements.

○ Hit your numbers and go home. ● Challenge – currently only works for hip based location.

WellnessNon- Activity Based Revenue Opportunities

Food – Blue Ocean for Revenue Opportunity ● Food is the 20/80 rule in health and fitness.

○ Doctors instruct patients to adopt a preferred diet in order to mitigate chronic health conditions.

○ Athletes modify their diet to meet performance goals. ● Strong desire for transparency with our food. Ingredients and source.

○ Provides for new touchpoints to enhance Insight and Social experiences. ■ Diet lifestyle social connection – paleo, low carb, atkins etc.

○ Rise in awareness of food sensitivities/ allergies. ■ 50% increase among children since 1997. ■ Apps such as Fooducate to meet this concern.

○ Awareness of source. ■ Farm to Table & Organic movements. ■ Organic Food is a $30B Market.

Food – Blue Ocean for Revenue Opportunity

● Food acquisition is shifting from a Push to a Pull model. ○ i.e. Amazon Shopping, Google Express, Postmate, Good Egg, InstaCart,

Safeway, etc. ● Price comparison is a constant struggle. ● Provides for New Revenue Opportunities.

○ Entry point into Mobile Ad Revenue Market.■ $31B industry with North America experiencing a growth rate of 47%.

Stress / Mindfulness - New Experience● APA study in 2012 stated: Millennials and Gen X reported higher levels of

stress compared to other generations. ○ Leading Millennials to take a mind-body balance approach to health.

■ Money spent on Yoga grew 87% from 08-13 & participation rose 29% with ~ 20.4 million.

● Meditation is a $14B year industry with no clear market leader.

Stress / Mindfulness - New Experience● 75% to 90% of all doctor's office visits are for stress-related ailments and

complaints.

Stress / Mindfulness - New Experience

● Multiple Approaches to quantify stress & mindfulness.○ Heart Rate Variability – stress/ fatigue – Heartmath and Jaybird.

■ Can enhance the Pure Pulse experience.○ Breathing – Spire○ BCI – Thync

● Mindfulness experience can serve as an entry point into Virtual / Augmented Reality devices.

● Mindfulness experience will allow you to ride the trend of holistic wellness and provide another touch point for your Insight experience.

UV Detection – Natural Fit ● We have seen several devices approach UV detection. MS Band, Sun

Friend, etc. ● Two conflicting theories of sun health.

○ We are getting too much sun. ■ Skin Cancer most commonly diagnosed form of cancer. ■ We are spending $382 million on sun screen related products.

○ While at the same time not getting enough. ■ Sunlight essential to Vitamin D production.

● Seek to combine both experiences.

IOT / Smart Home ● Misfit, Apple Watch, Google Wear, Jawbone all allow for IOT integration.● Payment & IFTTT to have the most legs

○ Apple and Jawbone driving awareness of Payment. ○ IFTTT is acquiring new User’s and recipes at a fast rate.

● Google and Amazon developed stand alone Smart Home devices. ● Opportunity to enhance Sleep Experiences.

Medical Simplified Approach to Take the Lead

FDA – Partnerships to simplify the process

● Start to work with partners for FDA approval experiences to establish an early lead.

● Firms like Alivecor are defragmenting the FDA process for consumer device firms.○ Apervita - medical algorithm marketplace. ○ This will accelerate the FDA process.

● We can see medical use cases becoming table stakes offering for Digital Health oriented products.

Form FactorsNew Forms to Strengthen Your Position

Hearables – Intelligent Headphones● Hearables are a discrete form factor delivering an intelligent, blended

experience of ambient and personal data. ● Projected to be a $5B industry by 2018, with $31M VC investments in

2014. ● Associated form factor with fitness. ● Entry point to BT Stereo Headset growth trend.

○ $300 - $400 price range is ~73% of the market in 2014. ● Players already involved, LG, SMS Biosport, Jabra, Wearhaus, The Dash

(wait and see). ○ Logical to expect Apple taking a stab at the space.

Smart Textiles - The Big Promise - Just Not Yet ● Start to engage suppliers / fashion partners in the space. ● The space is going through learning pains.

○ Price point range $150 - $400 for a shirt. ● Current Players

○ OM Signal – HR/ HRV and Vo2. ■ Fashion partnership with Ralph Lauren Polo.

○ Athos – EMG to target muscle specific activities. ○ Hexoskin HR/ HRV and Vo2, Sleep○ Victoria Secret & Lululemon - Heart Rate Sports Bra ~ $75 price point