How disruptive can wearables be and what will the market look like?
The market opportunity for wearables is staggering. Experts predict nearly 15 million wearable smart devices will be sold this year and nearly 70 million by 2017. As a leader in highly integrated wireless technology, Broadcom is in a unique position to help drive connectivity into everything, including the emerging smart wearable device market. Just like smartphones transformed the way we consume video and data, the wearables market has the potential to transform the way we collect and share data, experiences and information.
What components, manufacturing processes and ecosystems need to be in place to make these devices happen and what players are best positioned to take advantage of this?
For the wearables market to take off, we need low-power, location-aware devices that can connect anytime, anywhere. The ability to connect these devices to a smartphone is key as it offers the window into the data the wearable is collecting and can serve as the transportation hub to send that data to the cloud. Wireless charging represents a massive opportunity for the wearables market as well; being able to quickly recharge a device by placing it on a charging pad or harvesting RF energy from its surrounding environment will have a significant positive impact on these devices. We are excited to be at this turning point where there is huge potential for large and small OEMs and nimble start-ups alike to contribute to wearable innovation.
What role can these devices play and what are the obstacles to seeing them gain a mass market?
There are many different ways wearables will impact our everyday lives - from automated home entry and lighting, to elder care and patient tracking, clinical health and fitness. As is the case with any new technology, the industry will need to make sure these devices are easy-to-use and offer features that enhance consumers’ lives. The adoption of NFC in wearables, for example, will simplify the pairing between the device and a smartphone by allowing the consumer to seamlessly and securely tap the devices together in order to start using them. These types of innovations will be key to widespread adoption.
From a technical standpoint, what is the supply chain impact?
Looking at recent data and projections, which include an estimated 50 billion connected things by 2020 and an estimated 4.5 billion smartphones in 2018, it’s easy to draw the conclusion that there will be at least one wearable product as a companion to every smartphone/smart device. We can expect that this trajectory will drive a huge increase in demand for wireless devices and cloud-based services, and in turn drive major demand on the supply chain.
What’s changed technically that has stimulated so much growth for connected products in the last 5 years?
The simplicity of touch and graphical user-interfaces of the smartphone. Consumers have been liberated from technical barriers by apps based interfaces enabling connections with the flick of a finger. The product applications are adding simple lifestyle enhancements rather than trying to do too much with technology – the most simple apps are often the most useful.
The market seems to have a lot technologies companies chasing the new business opportunities – what will determine the winners?
Integration, simplicity, and cost. Our team at Broadcom has demonstrated sustained visionary wireless innovation. Our software engineers have developed applications and design tools that provide turn-key wireless to product designers and enable secure, easy to use consumer products. Broadcom chip teams continue to provide highly integrated solutions of the most useful technologies driving price points that allow OEMs to capture upsell margin by including wireless technology.
How is Broadcom addressing security issues with IoT?
In any new or emerging market, security is often one of the key concerns that absolutely needs to be addressed. Broadcom has a long history of developing technology for new markets in which security is a top priority. In the case of IoT, security needs to be addressed at the most fundamental product design level. In parallel, the industry needs to address consumer concerns through education and awareness.
Broadcom has already started to address security at the design level. In February, we announced a partnership with Norton to help consumers protect and manage their home networks and all of their Internet-connected devices. Specifically, we’ve developed a router platform with Norton’s security technology. Since data and video first enters the home through the router, integrating a layer of security at this point of entry can serve as the first line of defense for the home network.
This is just the first step. We’ll continue working with Norton and other industry leaders to address issues of security today and in the future. We might also look at hosting another event like this with some of our security partners. Would something like that be of interest to you?
How do you overcome the form factor and power consumption issues?
For the wearables market to take off, we need low-power, location-aware products that can connect anytime, anywhere. The ability to connect these products to a smart device is key as it offers the window into the data the wearable is collecting and can serve as the transportation hub to send that data to the cloud. By using wireless technologies to transmit this new data, our smartphones and tablets help reduce the processing requirements and power needs of the wearable product, which in turn, brings down costs for manufacturers and consumers.
Additionally, wireless charging represents a massive opportunity for the wearables market; being able to quickly recharge a device by placing it on a charging pad or harvesting RF energy from its surrounding environment will have a significant positive impact on these devices.
How does Broadcom take advantage of its integration capability for wearable solutions?
As a leader in highly integrated wireless technology, Broadcom is in a unique position to help drive connectivity into everything, including the emerging smart wearable device market. Broadcom's Wireless Internet Connectivity for Embedded Devices (WICED) portfolio provides the foundation for embedding low power, high performance, interoperable wireless connectivity into wearable devices as well as devices that are part of the larger “Internet of Things” ecosystem.
Most recently, Broadcom introduced WICED Direct as the newest addition to the WICED family. By integrating Wi-Fi Direct™ into the WICED platform, we are enabling OEMs to rapidly develop wearable products that communicate seamlessly to the cloud using smartphones and tablets. By supporting Wi-Fi Direct, a specification that allows two devices to communicate with each other securely via Wi-Fi without an access point or computer, Broadcom is inspiring the development of new smart accessories, clothing and other wearable sensors.
In addition to Wi-Fi Direct, Broadcom’s expertise in Near Field Communication (NFC), Bluetooth Smart and Wi-Fi will help wearable devices to seamlessly connect to smart mobile devices and unlock new use cases. By using NFC, consumers can buy a new wearable device and simply tap it to their smartphone so the devices can instantly and securely establish a connection. Bluetooth Smart and Wi-Fi allow the consumer to collect data from their wearable device (i.e. calories burned, heart rate, etc.) and transfer it to their smartphone or into the cloud without draining the battery.
How well does Broadcom understand the wearables market demand?
Just like smartphones transformed the way we consume video and data, the wearables market has the potential to transform the way we collect and share data, experiences and information. And with experts predicting nearly 15 million wearable smart devices will be sold this year and nearly 70 million by 2017, this presents a staggering market opportunity for companies both large and emerging.
Given Broadcom’s history of leadership in wireless connectivity and highly integrated offerings, we are well-positioned to capitalize on the market opportunity for wearables. Our advantage lies in integration, simplicity and cost. Broadcom has demonstrated sustained visionary wireless innovation, our software engineers have developed applications and design tools that provide turn-key wireless to product designers and enable secure, easy to use consumer products, and our chip teams continue to provide highly integrated solutions of the most useful technologies driving price points that allow OEMs to capture upsell margin by including wireless technology.
Does Broadcom has a dedicated business unit responsible for driving the wearables market?
Broadcom’s Wireless Internet Connectivity for Embedded Devices (WICED) portfolio simplifies development and implementation of Wi-Fi and Bluetooth Smart in products designed for the “Internet of Things,” which includes wearables.
Broadcom’s WICED family includes:
- WICED Direct integrates Wi-Fi Direct™ into the WICED platform and enables OEMs to rapidly develop wearable products that communicate seamlessly to the cloud via smart mobile devices
- Bluetooth Smart SoC, BCM20732, connects battery-operated devices like heart rate monitors, pedometers, door locks, lighting, proximity alarms and more.
- Wi-Fi SoC, BCM4390, integrates Wi-Fi into low-power consumer devices, including sports and fitness, health and wellness and security and automation products. It can also connect simple appliances like slow cookers and lights.
- WICED Smart Development Kit provides access to Bluetooth Smart SoC plus embedded Wi-Fi, and enables connectivity to battery-operated devices.
WEARABLES AND IoT STATS
IoT - Intelligent connected machines and services that surround us – effectively known as the “Internet of Things” (IoT) – will become a $309 billion business by 2020, new research from Gartner shows (via ZDNet). The firm says that IoT devices in use will grow from 900 million units today to 26 billion units by 2020, at a significantly higher rate than smartphones, tablets and PCs, which will reach about 7.3 billion combined units by the same year. Adding IoT connectivity features to more devices will be even cheaper in the future, to a point at which some devices may have built-in but unused Internet capabilities, as they wait for proper software to deliver smarter features. IoT will grow predominantly in areas including medicine, factory automation sensors, industrial robotics, agriculture, automotive, transport monitoring but also water distribution and electrical transmission
Internet of Things (Piper) - The Internet of Things was highlighted recently at the developer conferences of both Intel and QUALCOMM. Increasingly, companies like GE, IBM, CSCO, ARM and others are also highlighting the opportunity of IoT. We are tracking the news flow of IoT and expect it will gain increasing visibility at CES in January 2014. We believe the early market opportunities for IoT are wearables and home automation. Based on the current activity, we believe early semiconductor winners in the IoT market will be INVN and SLAB. We estimate the silicon content of IoT nodes will grow from $640M in CY12 to $17.8B in CY20, a 52% CAGR. In 20 years, we believe the IoT silicon market could rival the market for PCs or smartphones. IoT will drive the proliferation of sensors - INVN. In the consumer market, increased sensing capability along with small, low power and inexpensive integrated circuits are essential. InvenSense is well positioned to dominate the sensor category for the Internet of Things. We believe the company’s roadmap for sensing is among the strongest in the industry. The company also recently acquired ADI’s MEMS microphone product line that will also have application in the IoT market. SLAB is a leader in SoCs for IoT. Silicon Labs has been targeting the Internet of Things for several years. We estimate ~10% of revenue was IoT-related or $55- $60M in CY12. SLAB acquired Ember Corp. in 2012, which added ZigBee wireless mesh capability needed to become a significant player in IoT.
Global revenue from the internet of things totaled $200 billion in 2012 and is expected to rise to $1.2 trillion by 2020 (source: Global Information)
Already in the U.S., there are more connected devices than people. Connected device traffic will grow 24 times over the next 5 years and, by 2020, is estimated to double 2012’s traffic. (Source: Cisco)
hU.S. Mobile Wearable Devices Forecast, 2012-2017 published by iGR today
Over the five year period between 2012 and 2017, fitness and healthcare device sales in the U.S. are expected to grow at a CAGR of 48.5 percent and smartwatch sales are expected to grow at a CAGR of almost 195 percent.
Wearables (ABI) - Wearable wireless device revenues will grow to exceed US$6 billion in 2018. Of the four segments tracked, sports, fitness and wellness is the largest, never dropping below 50% share of all device shipments over the forecast period. Fitness activity trackers are quickly gaining popularity in the market. Different from other more single-use or event-centric devices, activity trackers monitor multiple characteristics of the human body including movement, calories burned, body temperature, and sleep tracking. Activity trackers are expected to grow at a 40% CAGR and overtake the 2013 shipment leader, heart rate monitors, in 2017.
Internet of Things/BRCM/QCOM (Piper Jaffray) - Over the next year, we expect a pick-up in Internet of Things (IoT) activity. We are issuing our first forecast for IoT calling for 23.7B connected devices by 2020, on the conservative side of the 20-50B forecasted by ARM, Cisco, Ericsson, GE, IBM and others, but still representing impressive growth. We estimate this will drive a $17.8B chip business by 2020. Within our coverage list we believe winners include INVN, SLAB, LLTC, QCOM, FSL, ARMH and BRCM. Since Wi-Fi and Bluetooth are the leading candidates to dominate consumer IoT we consider the leaders in those markets as well positioned in IoT. These companies include Broadcom and QUALCOMM. Today, Broadcom dominates silicon for broadband gateways which includes set-top boxes and DSL modems. The company also has a presence in the emerging optical access market for home automation hubs. QUALCOMM dominates the mobile phone market with modems, but is a bit behind Broadcom in Bluetooth/Wi-Fi combo chips.
o It took 100 years to get 1 billion places connected; it was only 10 more years to get 5 billion people connected; and we expect by 2020 we’ll have 50 billion things connected
o 4.5B Smartphone subscriptions by the end of 2018
o 60% Mobile video traffic growth rate through 2018
o 60% Percent of world’s population covered by LTE by 2018
o 2X Increase in mobile data traffic between Q1 2012 and Q1 2013
o 12X Growth of mobile data traffic between 2012 and 2018
o 50B things connected to the Internet by 2020
o Smartphone users check their phones 150X per day
o 500M photos are uploaded and shared every day
o 30B wirelessly connected devices by 2020
o 366% increase in wearable products sold between 2013-2017
o Nearly 15 million wearable smart devices (including glasses, health and fitness monitors, and other devices) to be sold this year, amounting to $800 million, and nearly 70 million to be sold by 2017
According to IHS, the product segment- which features everything from augmented reality glasses to smartwatches- is on the fast track with growth and will likely see shipments surge by more than 550% from 2011 to 2016. Overall, the research group estimates that 171 million wearable tech devices will ship in 2016. That echoes other analysts’ projections with wearable tech becoming a $1.5 billion market by next year.
IHS Electronics & Media Second Edition of Internet of Things 2013 Report
The number of Internet connected devices which make up the Internet of Things is forecast to reach 12.1 billion by the end of 2013, and will more than double by 2020 with an estimated 29.2 billion devices spread across mobile, consumer, industrial and medical markets.
Gartner - Gartner Symposium on Wearables
According to Gartner, it’s a world “where business opportunities flash past in seconds, driverless vehicles displace millions of transportation jobs around the world and just about everything we own has some sort of smarts embedded in it”:
- In 2009 there were about 900,000 sensors and 1.6 billion personal devices connected to the internet.
- In 2020, Gartner estimates there will be 30 billion "things" connected to the internet. The average home will have some 500 smart objects in it.
- Gartner predicts that by 2020 there will be $1.9 trillion worth of value created by the internet of things, although it will also cause widespread labor disruption.