Wearable Computing

Xcelmobility Wearable Computing Opportunity

The Smart Watch

Summary

Xcelmobility is leading a consortium of 4 companies to develop and market a smart watch wearable computing device. The device will initially be developed and sold into the wearable computing device market in China. International markets will be targeted after the successful launch of the product in China. Reasons for launching in China first include:

  1. Strong distribution channels are already in place for China market success.
  2. The infrastructure is already in place for the China market including a national cloud computing network.
  3. Having the world's first Mandarin native language interface is a big selling feature in the China market.
  4. We will gain a lot of market understanding in China before entering the more competitive US and European markets.

The Consortium

The wearable computing consortium consists of the following China based technology companies:

Tianditu Ltd., http://en.tianditu.com/map/index.html, is China’s exclusive, government-sanctioned web-mapping service and controls the country’s most detailed and up-to-date mapping data online and in real-time. Its space location and position data is required to build location-enabled applications and services for the China market.  Tianditu’s unmatched database of geographic information and position as one of the today’s most visited web portals in China, makes it a critical component of the consortium as its data is vital to the LBS solution.

NingBo BoYan Software Technologies Ltd., http://www.internetanswer.com/, is the developer of RVSP, an intelligent personal assistant and knowledge navigator which utilizes a natural language user interface to answer questions, make recommendations, and perform actions by delegating requests to a set of Web services. Today, RSVP is the only system that has both English and Chinese natural language search capability.  The RSVP voice actuated system will be incorporated into the LBS technology and will function similarly to “SIRI.”

UMEOX Mobile Ltd., http://www.umeox.com/index.php, is a leading international mobile phone manufacturer with over 1,000 employees located in Shenzhen, China. The company has delivered over 20 million mobile devices to the largest mobile distributors in China and is working on numerous projects related to wearable computing.  UMEOX will work closely with Xcelmobity integrating the technologies from each partner onto the next generation wearable computing device.

Xcelmobility will provide overall project management and will provide the important client/server software programming environment for the new wearable computing device. Xcel will also provide the cloud based environment required for many of the client/server applications targeted for the new wearable computing device.

The Smart Watch

Unlike other smart watch designs the mach5 smart watch will not require a link to a smartphone. The Mach5 smart watch has all the functions of a smartphone built into a light and fashionable watch. The watch will connect wirelessly to the cloud/internet through a mobile carrier’s network or through an available Wi-Fi connection.

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Key Features of the Smart watch:

  • Connectivity: GSM, Wi-Fi, Bluetooth
  • NFC enabled
  • LCD: 1.54 inch touch screen
  • Built in Camera: 3Meg Pixel
  • Sensors: G-Sensor, E-Compass, Gyro
  • Memory: up to 8G of memory
  • SIM card support
  • GPS enabled for location based apps and service
  • Chinese language command voice support

Wearable Computing Market

 According to the recent Credit Suisse wearable computing report – a rapidly growing installed base of mobile computing devices and a confluence of hardware/component innovation, software ecosystem maturation and emerging business models should drive significant growth in “Wearables” (smart watches, glasses, monitors etc.) over the next several years from an estimated $3-5bn in 2013 to what could be well over $42bn in the next 3-5 years  

Key trends:

  1. Hardware/component innovation: Low power connectivity and processing, sensors, and touch and voice interfaces could represent a greater than $5-8bn semi TAM over time
  2. Software Ecosystem: The dominance of Android and iOS place GOOG and AAPL in the pole position to leverage this new opportunity – for example we estimate that an AAPL iWatch could generate $10bn/$3.30 rev/EPS assuming 25% attach rates at a $250 ASP.
  3. Business Model Leverage: Multiple permutations including deeper customer engagement (Nike, Under Armour), new applications, mobile payments, medical monitoring, e-commerce, location based service and big data evolution from unstructured to un-captured data. Wearables will have the potential to add context to location – greatly deepening our understanding of how we interact with our surroundings.

Wearable Computing in China

The wearable computing market in china will closely follow the emergence and growth of the high end mobile device ( smartphone/tablet) market. As seen on the graph ( China's Path to the World's largest Connected Device Installed Base) China has the largest and fastest growing opportunity for wearable computing. Not only in the existing connected device users measuring over 261,000,000 but in the enormous green field opportunity as more and more Chinese citizens move into the middle class. Growth in China will continue at an exponential rate for the foreseeable future because device penetration rate is still relatively low and much opportunity remains.

Smart Watch Market in China

The worldwide smart watch market will exceed 5 million unit shipments in 2014 according to the latest Canalys forecasts. Canalys estimates that over 330,000 smart watches were shipped in 2012, led by Sony and Motorola. Kickstarter-backed Pebble Technology has joined Sony as a market leader in 2013; over 500,000 units will be shipped this year. Smart watches are then set to explode by the end of 2014, growing tenfold as a new generation of devices from Apple, Google, Microsoft, Samsung and others are launched.

The China mobile internet market represents 24% of the world market. So the Smart Watch market in China is forecast to be over 1,000,000 devices in 2014. A year over year growth rate of 10 fold.

The Applications Interface

The smart watch runs on the Android operating system like many of today's most popular smartphones and tablets. Xcelmobility has developed an easy to use API whereby 3rd parties can develop custom applications and services for the smart watch. 3rd party developers can market their applications through Xcelmobility's Mach5.cn mobile internet portal.

Initial Applications and Services

Xcelmobility has developed important location based applications and services that will be available upon the launch of the smart watch. These applications consist of the following:

Smart watch  Locator acts as a security device with Assisted GPS technology for both outdoor and indoor location. The suggested applications are: Child protection, Law enforcement, Lone Worker Protection, Elderly Care and Alzheimer Care.

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Real-time Traffic Report Application

The RTR application will provide real-time traffic information to smart watch users. The traffic data will be updated in real-time. The RTR service will intelligently provide direction data to the user providing the quickest and safest route.

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