2015: The Battle For Our Body Begins

Much of the battleground of computing throughout tech history has been for our desks, our laps, and our pockets. In 2015, the battleground for our body will begin. It can be argued that battle had already begun but my firm belief is a true market for wearable computing has not yet emerged. Companies were playing in the space but the vast majority of consumers were not yet interested or, if they were, they were left disappointed. Apple’s smartwatch entrance will change this. Every company I spoke with who had already been in the market with a wearable of some type openly admitted to me that when Apple enters the space there will truly be a market. Even Apple’s hardware competitors acknowledge while Apple is not always early to a category they are pivotal in establishing those categories.

Any sound analysis of adoption cycles will reveal timing is the key to mass consumer adoption of a technology. Some companies get into product categories long before the surrounding technologies are ready and even before the market is ready. I recall several years at the Consumer Electronics Show going to the wearable technology pavilion. It always showed interesting stuff, but none of it was mass market ready. Microsoft is exceptional at being too early. They had a vision for the tablet but were too early. They seemed to know wearable technologies would be big and developed the Smart Personal Object Technology. Microsoft, with those two examples, were early and the technology along with the market was not ready for such products. I’ve heard executives say time and time again, being too early is just as bad as being too late. Timing is everything. Thanks to Moore’s Law, the timing is about right to enable a true wearable computing landscape.

Invasion of the Microchips

Ultimately, the continued advancement of Moore’s Law is enabling smaller, more powerful, and more battery efficient processors. Thanks to this advancement, we will be able to bring more computing power, with better battery efficiency, to extremely small objects. But wearable computing is unlikely to be advanced unless computing systems are designed specifically for wearable computing applications. This is what Intel is looking to accomplish with their Edison module and Qualcomm is doing with their Toq platform. Similarly, Apple built their own integrated system for the Apple Watch called the S1, which is essentially a full computer architecture on a single chip. Designing specific microprocessors, not just using off the shelf solutions geared at other applications, is the way to meaningfully move this category forward.

Interestingly to me, Apple is actually accelerating Moore’s Law for their own benefit. They have this luxury because they design processor architecture just for themselves. Moore’s Law states transistors roughly double every two years. Apple, with the A8 has nearly doubled the transistor count in one year. Apple has packed 2 billion transistors into the A8. Which begs the question, what can Apple do with the Apple Watch when they can pack 2 billion transistors into it? Which is inevitable at some point in the future.

Advancements like these are what set the stage for the battle for our body.

Wearing Computers

The idea of wearing a computer is still foreign to many consumers. Whether it is a smartwatch or a fitness, health, or activity tracker, most people have not adopted the practice of wearing a smart object on their person. This market is in the very early stages of development. There is no doubt wearable computers have problems to solve. However for many, those problems are not yet evident. Over the course of 2015, I believe we will take steps to identifying the problems for the masses wearable computers will solve.

Some of these solutions will be general purpose products which will do a range of things well and and possibly one or two things really well. Others will focus on just a few use cases, perhaps doing only several things really well and that is all. One thing I’ve concluded about this space is it will not be limited to just one approach. In a market of several billion and growing consumers who may be interested in wearable computing, there is enough market share to go around. Like many consumer tech markets, wearable computing is not a zero sum game.

Up to this point, I’ve been critical of both the current crop of health and fitness wearables and the current crop of smartwatches. That is not because I don’t believe in the category but because nothing on the market yet cracks the mainstream value proposition. But 2015 looks to be the year more focus across the board will be placed on solving tangible pain points for consumers.

As Lou Gerstner, the former CEO of IBM, once said. “The market is the ultimate arbiter.” I expect many companies to take their licks refining and pruning their offerings to bring something unique and useful to the mass market. There are more possibilities of where this market can ultimately go. But the market will be the ultimate arbiter in the battle for our body. And given the intimate nature of these products in our lives, there is no better judge and jury.

What Does This eBay Wearable/Smartwatch Data Tell You

I thought I would do something different and show some charts and let our readers help interpret them and share thoughts on what the data reveals. I found data from a service called Terapeak that provides a range of analytics for products on Amazon and eBay. Since Jan wrote a great article today on wearables, I thought it would be interesting to look at this data from eBay listings separated by product and revenue generated from each product from sales on eBay. Below are the charts and a few points on them.

Total Listings on eBay

This chart shows the total listings, over the past year, by a few select wearables and smart watches.

Screen Shot 2014-08-14 at 9.12.00 PM

Fitbit has the largest number of listings of any of the devices by volume on eBay. There are a few other data points of interest to note with this chart with regard to new vs used listing for each device.

  1. Pebble = 30% of listings were used
  2. Samsung Gear Fit = 8% of listings were used
  3. Fitbit = 22% of listings were used
  4. Jawbone = 13% of listings were used
  5. Mio Alpha = 16% of listings were used
  6. Basis = 23% of listings were used

Total Money Made by Each Product

This chart shows the total volume in dollars made by each product over the past year.

Screen Shot 2014-08-14 at 9.12.09 PM

Google Glass is the most expensive of all the products listed here so it should come as no surprise that it makes a good chunk of money from sales on eBay.

Comparing Categories

Just to add perspective, I’ve included the total sales on eBay of the past year’s iPhones, other mobile phones, and tablets.

Screen Shot 2014-08-14 at 9.12.26 PM

Apparently, selling iPhones on eBay is a half a billion dollar per year enterprise.

Given Jan’s article, and what many others on this forum have shared about the challenge facing wearables, what observations stand out to you with these charts?

But Apple Is For Old People! Where iWatch And Apple Have The Last Laugh.

Anybody still recall when Apple’s chief competitors went about mocking the company for being, well, technology designed for older people? Those attacks came to an abrupt end in large part because Apple kept on printing money. I suspect, however, there is a second reason: iWatch.

iWatch may be the perfect personal computer for boomers, seniors and the elderly, yet Apple’s competitors, desperate to prove they are cool, have only now clued into the importance of this demographic. If at all.

Yes, the Apple iWatch does not exist. Rumors abound nonetheless, most insisting either that Apple iWatch will be the greatest computing revolution ever, or the latest batch of prognostication, an odd sort of tamping down of expectations, as if we should prepare ourselves to be disappointed.

Spoiler alert: neither of these groups knows.

We do know, however, that there is a massive, untapped market for an Apple iWatch: older people.

Consider that a device roughly as we imagine the iWatch to be, can at this very moment, serve as a tracking beacon, a camera, a heart monitor, an exercise monitor, pulse oximeter, a voice-based notification service – “time to take your pills” – a non-invasive glucose monitor, and a possibly a method of alerting the wearer to an impending heart attack.

All of which would be extremely valuable not simply to fitness freaks, but to baby boomers, seniors, elderly — certainly anyone over 60.

Bonus spoiler alert: there are a lot of older people. They positively abound in core Apple markets, including China, Japan and the United States.

The Bleeding Edge

Change comes fast to technology. The irony here is that the next insanely great market for computing tech, wearable devices, may reside within the demographic long considered furthest from the bleeding edge: older folks.

About time.

But first, a trip down memory lane.

“Apple is for old people.”

This glib statement has been a surprisingly persistent refrain from the media ever since the rapid mass market ascendency of the iPhone. Over the past 24 months, a “brand perception measurement” firm noted that Apple’s “biggest fans” hail from the older end of the spectrum. Bloomberg was happy to repeat this gospel: “Older people use iPhones, younger people use Samsungs.”

HTC — remember them? — mocked Apple back in 2011:

iPhones are not that cool anymore. We here are using iPhones, but our kids don’t find them that cool anymore.

Samsung famously mocked iPhone’s appeal to the older crowd in a series of blistering televised attacks:

Not wanting to feel left out, Microsoft joined in on the action, wondering if the mean old lady was nonetheless (wink wink) too young to have an iPhone:

As a way to limit Apple’s growth, this line of attack has simply not worked. Indeed, I think this mocking of Apple – and by extension, all their older users – will come back to haunt the perpetrators.  As this Digital Trends analysis reminds us:

Older consumers tend to have more disposable income and be less price sensitive than young consumers.

In addition, older people, happy and content with their iPhones and iPads, may offer Apple a sly path into the enterprise:

Having a positive perception among older consumers can also have indirect benefits to Apple’s business, since older users are more likely to be able to influence purchasing and technology policies and purchasing at schools, businesses, and enterprises.  

The technorati continue to miss the big picture: whether or not “old people” are a natural Apple customer, we keep making more of them. Lots more. Just in the US, we will have 55 million people age 65 and over by the end of the decade. China is already approaching 200 million people aged 60 and older. This number is growing — fast.

What’s Old Is New Again

Note the graphs below documenting the aging of Japan and China, in particular. These aging populations will require innovate support, services and technologies to meet their unique needs.


Breaks down like this: More older people, living longer, possibly living alone, and with a greater need for health (and health monitoring) services. Think of the massive potential of an iWatch or similar device for this group.

Thus, while Apple is aggressively pushing into China, I suspect there is far more at stake than sales of iPhone. As Bloomberg noted last year:

More than two decades of record economic growth turned the Chinese into the world’s top consumers of cars and smartphones.

Yes, yes, smartphones. And yet, that very same Bloomberg report noted:

As the almost 200 million population of over-60s more than doubles in the next 40 years…

Forget talk about Apple building a “phablet” because China consumers will demand it. I can’t help but think an iWatch is the most logical product for Apple to build for China (and beyond). An affordable tracking device that monitors pulse, breathing, glucose, offers reminders, its data instantly synched to the cloud, accessible by health authorities, shareable with children or caregivers, could prove invaluable.

Again, it’s not just in China.

The US is similarly gaining extraordinary numbers of older people, as this PBS report noted:

(Starting in 2011) the first of the estimated 79 million Americans born between 1946 and 1964 will turn 65 years old this year, at a rate of 10,000 a day. (emphasis added)

It gets better — if you’re Apple and if you’re working on an iWatch:

The number of people enrolled in Medicare will grow from 47 million in 2010 to roughly 80 million when the last of the baby boomers turns 65 in about two decades, while enrollment in Social Security is expected to rise from 44 million to some 73 million. At the same time, the ratio of workers paying taxes to support the programs to beneficiaries will drop.

Our healthcare industry, and our seniors, are going to be tasked to do more with less. Something like an iWatch, priced under $500, say, could prove a rather innovative means to save money on health testing, monitoring and possibly even visits to the doctor.

The Case For iWatch

It may seem like smartphones are everywhere, but even in the US the latest data shows that less than 20% of people over 65 have a smartphone. Likely, they find little need. But an iWatch, as imagined, could prove to be a near-necessity. Ask yourself: who is best equipped, anywhere in the world, to build a highly functional, reasonably affordable, startlingly intuitive, wearable personal computing device? My money’s on Apple.

Almost a year ago, CEO Tim Cook said “I think the wrist is interesting. I’m wearing this (Nike Fuelband) on my wrist…it’s somewhat natural. But as I said before, I think for something to work here, you first have to convince people it’s so incredible that they want to wear it.”

I do not know if Apple has reached that “incredible” stage yet, nor when they might. But a device that older people can legitimately operate and will use, offering valuable and personalized health data, could prove to be yet another massive market for the company.

I predict the iWatch will usher in a entirely new personal computing paradigm, flipping the early adopter/late adopter convention on its head. For the next phase of computing, build first for the old, that’s the bleeding edge, then let the technology drift out to the rest of the market in due time.