Wearable Tech in a Race for the Killer App

Wearable Tech in a Race for the Killer App

Reports from the Consumer Electronics Show in Las Vegas indicate that the gadget industry has decided to make 2014 the year of wearable technology. In other words, there’s going to be a chaotic proliferation of smart watches and magical bands until someone comes up with the “killer app.”The smartphone market took about 10 years to get to the point where consumers could make sense of what was on offer. Now there’s just Android and Apple’s iOS. If you want to be generous, there’s also Windows Phone, which Microsoft says is outselling Apple in a number of countries but which still has less than 4 percent market share. All the platforms offer a more or less identical list of functions and plenty of apps.

The wearable market offers no such clarity and standardization. “We expect every smartwatch provider to build their own app store, and consumers to experience a lawless jungle by 2015,” the Finnish wearable software company Koru, headed by Nokia Lifeblog creator Christian Lindholm, predicted in a December presentation.

Mobile Computing Escapes From the Phone

It is still an open question what a wearable device should really do. Is it OK simply to tell time and interact with a smartphone, showing messages and push notifications on a smaller but more accessible screen and using voice commands to manage the phone? Or should it also have the functions of a fitness band, tracking workouts, counting calories and analyzing sleep patterns? Does a person need a watch and a wristband?

Some companies actually believe two is better than one, possibly because the sales can potentially add up. Sony, which released a smartwatch last year, used the CES to provide a preview of its SmartBand, a tracking device capable of documenting the wearer’s whole life rather than just runs and bicycle rides. Sony hopes to turn its Lifelog app into an open development platform. Samsung, too, is reportedly planning to release a band.

Some producers specialize. A Pebble smartwatch goes days without a recharge and is ahead of others in application development, but is not fitness-oriented. A Basis band will monitor your sweating but not get your e-mail.

Razer, a maker of gamer-oriented gadgets, decided to go for a holistic approach. Its device, called the Nabu, is both a smartwatch and a fitness band. It looks geeky, and has two tiny displays that are not much fun to interact with. To Razer, that doesn’t matter: The company is out to “gamify the world,” making it possible for people to create augmented reality games. Like most of the new gadgets, Nabu is an open development platform, meaning that anyone can make apps that work on the device.

The “lawless jungle” looks just like the mobile phone market of the early-to-mid 2000s, before the iPhone. When Apple’s world-changing gadget debuted in 2007, it was criticized for not having this or that feature — a hardware keyboard, for example, or 3G capability. Yet before long, it turned into the gold standard that everybody else was trying to emulate or surpass. In a jungle, someone needs to give a roar for all the other animals to perk up their ears.

The roar must come from a large enough beast, though that might not be Apple. Nobody knows when it will come out with its wearable device or whether, post-Steve Jobs, the company is still capable of market-defining innovation. No one expects the final word from the likes of Pebble, Basis or Razer, though their efforts will undoubtedly go into the eventual definitive product. Sony and Samsung have already shown they are followers rather than leaders, acting mechanically to fill new marketing niches. Perhaps this time the roar will come from Google or even Microsoft, where Alex Kipman, one of the developers of the Kinect sensor, is working on wearable technology.

The front-runners are here only to open up the market. It does not make any practical sense to buy their gadgets yet, but it might help to get the giants more interested.

(Leonid Bershidsky is a Bloomberg View contributor. Follow him on Twitter.)

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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