China wonders: whither wearable wares?
They illustrate the dilemma of the wearable market in China — which designs, produces and consumes a majority of the world’s wearable devices.
Many Chinese system and IC designers are keenly aware that they’ve got to rethink this whole thing if they want a viable future for wearable electronics.
Chinese vendors see the nascent wearable market, despite its uncertainties, as their chance to seize the initiative, compared to their catch-up/copycat status in smartphones.
A group of Chinese technophiles involved in wearables gathered here last week at the Songshan Lake Forum, an invitation-only event sponsored mainly by China Semiconductor Industry Association, Dongguan Songshan Lake IC Design Service Center and VeriSilicon.
VeriSilicon CEO holding a microphone at the far right moderates the panel.
Some 20 executives from China fabless companies came, including Rockchip, Memsensing and Leadcore. Also present were a dozen systems companies ranging from wearable-device startups to established firms like TCL and Huawei, and a half-dozen prominent industry analysts and observers.
Moderater Wayne Dai, CEO of VeriSilicon, used Socratic method to lead the conversation. An industry panel representing a cross section of the audience debated heatedly on smartwatches, wearable wristbands and smart-home technologies. Their discussions covered usage models, market obstacles, and lessons they learned from first-generation wearable devices. Audience members participated in real time, voting via the WeChat app.
Apple Watch versus Huawei Watch
(Source: VeriSilicon)
In China, the two different shapes of smartwatches are designed by Apple and Huawei.
Dai’s first question was: Does the shape of the smartwatch matter — round, square, whatever?
Among 41 in the room, 22 people responded that shape doesn’t matter. Fifteen preferred a round face, and four were squares.
As simple as it seemed, that question triggered a more complex discussion. Panelists observed that elder users, who tend to see a smartwatch as a timepiece, prefer a round face. Younger users whose smartwatches serve more as a device, go for square. Panelist James Xiong, CEO of 3Wearable Technology Co. (Shenzhen), said that all different shapes are possible but the watch “needs to be thin.”
The question about shape isn’t exactly so simple, explained Dai, when you consider that of 3,000 apps available on the Apple Watch, only 20 are unique to the Apple Watch. The majority of apps on the Watch serve as assistants to an iPhone.
The wearable industry is split on this very dichotomy. One school believes the smartwatch will remain a smartphone accessory, displaying messages or functions as reminders for the user. The other school says it’s going to be a standalone watch whose key purpose lies in collecting data. “Whether legal or illegal, data-mining based on the standard will become the most important factor,” said Abraham Zhang, now a retired former vice president of Huawei serving as an industry consultant.
Where you stand on this issue could determine the shape of a smartwatch, the panel concluded.
Smartwatch can’t be just a toy
Among four key technologies — sensors, wireless, power consumption and user interface — which poses the biggest bottleneck in the way of smartwatch success, Dai asked the panel.
Alice Sun, analyst at Global Sources (the publisher of EE Times China), said that the sensor is the culprit that relegates the smartwatch to its current perception as “just a toy.” Lack of accuracy in the current generation of sensors make the collected data “just noise,” she said.
User interface is another issue, Sun added. “If your smartwatch screen remains always dark or blank because it must save energy, it makes your smartwatch look like just a cheap watch.” The smartwatch needs to have an always-on screen, like that of AMOLED, she explained, so that the iconic user interface or its logo stays always on display.
Charging frequency
Dai wondered how often a user should have to charge his smartwatch: once a day, every three days, once week, a month, six months. The audience mixed realism with optimism. Eleven said once a week, another eleven chose every three days. Nine wanted a once-a-month recharge, six preferred six months. Three pessimists figured the charge would die in 24 hours.
3Wearable Technology CEO Xiong said, “Extending the charging frequency from one day to three days would make no difference to users. It’s unacceptable having to charge a smartphone even once every three days.”
Vincent Gu, an independent industry analyst (formerly with IHS), pointed out, “What matters more is a usage scenario.” Some people may prefer to wear the watch from Monday through Friday (without charging) and leave it behind at home for charging on weekends, he explained.
5 obstacles for wearables
The wearable device business is easier said than done. By listing five obstacles facing the wearable industry, Dai asked the audience to rank their concerns, placing the value from one to five with five being their highest concern.
“The lack of a business model” for wearable devices scored the highest (4.0), the “immature industry chain” and “lack of industry standard” tied for second (3.7), “data fragmentation (because people are not always wearing the device)” came in fourth (3.5). “Ineffective technology” ranked last (2.9).
As a dissenter, GlobalSources’ Sun passionately reiterated her view that the technology should be the biggest concern for everyone. What we have today “just isn’t good enough,” she said.
Yan Wen Ma, CEO at Vane, disagreed. His big worry is the lack of a platform, without which different wearables can’t build the business, he noted.
Ex-Huawei VP Zhang told the audience: “At issue is the lack of a standard.” Wearable/IoT devices exist today in isolation. One type of device talks to one cloud using its own connectivity. “With no standard and no certificate in place, the situation today is chaos.”
Wearable usage models
(Source: VeriSilicon)
But then, who will be using wearable devices for what purposes?
Ranked highest (4) was “wearables for medical applications,” while the second highest (3.9) was “wearable for fashion.” Third (3.1) was “wearables for industrial applications (i.e. for workers in factories, warehouses; prisoners),” followed by “wearables for pets” (2.9) and “wearables for agriculture” (2.6).
The panel grouped five multiple choice answers given by Dai into two categories: wearable devices “you must wear” vs. wearables “you want to wear.” A majority of the audience saw those who have to wear wearables — fragile old people, wandering kids, prisoners and pets — as the trailblazers of the wearable frontier. Nevertheless, 3Wearable Technology CEO Xiong insisted that the wearable won’t become a volume market unless “people want to wear it.” Fashion must drive wearables, he noted.
Can Apple Watch beat Swatch?
(Source: VeriSilicon)
Chinese wearable experts want to know how Apple Watch stacks up against Swatch. Or if the Apple Watch will encroach on the market for luxury Swiss watches like TAGHeuer.
Zhang cited the Apple Watch’s high cost. It’s a status symbol that he might pass on to his daughter. Most of the panel disagreed, noting that the electronics content in the Apple Watch will render it quickly obsolete. The technophiles in the crowd pooh-poohed the smart watch as luxury goods. Some said flat out that only a fool with too much money would buy the most expensive Apple Watch.
If this is so, then can a low-end Apple Watch, such as Apple Watch Sport, beat Swatch? “Swatchers” (who wear Swatches) said they wouldn’t trade.
The conclusion seems to be that the smartwatch must stand on its own merits. It replaces neither TAGHeuer nor Swatch. Its features have to diverge from and go beyond old-school timepieces.
Who will win the smartwatch battle?
As possible winners on the smartphone sweepstakes, Dai listed mobile handset guys (i.e. Samsung, Motorola), sports gear vendors like Nike and Adidas; new players and startups (i.e. Pebble), Internet companies (i.e. Google; Qihoo 360 Technology Co. Ltd., a Chinese Internet security company), Swiss watchmakers (i.e. Swatch; TAGHeuer), white box vendors; and “lurkers” (i.e. Xiaomi, Han Wang – an eBook vendor) who are choosing to “wait-and-see” for now.
Tied at the top were Internet companies and mobile handset vendors (3.6) followed by new startups (3.2). Next were the lurkers (3.1), Swiss watch makers (2.9) and sports gear vendors (2.4). The audience showed little confidence in whitebox vendors (2.1).
Who will rule the smart home?
Out of 34 voters at the forum, a majority of 20 voted for Internet companies as likeliest to corner the market. Remaining votes were equally split — with 7 votes each — between traditional home appliance companies and new smart home hardware vendors.
Ex-Huawei VP Zhang promoted his view that China should have its own smart home standard on the API level, similar to Thread or HomeKit. The panel, however, did not dwell on Zhang’s proposal.
About the author:
Junko Yoshida is Chief International Correspondent, EE Times
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