Intel buys into Basis wearable technology

March 25, 2014 10:46 pm

Intel buys into Basis wearable technology

By Tim Bradshaw in San Francisco

Intel is stepping up its pace of progress in the wearable technology market with the acquisition of Basis Science, maker of a health-tracking watch.

The chipmaker is the latest tech company to invest in wearable devices after Googleunveiled its Android Wear platform for smart watches last week and HTC struck a partnership with Fitbit earlier on Tuesday.

However, the deal will raise questions about what happens to the detailed personal data collected by fitness trackers when their makers change ownership.

Many in Silicon Valley are betting that smart watches and health-monitoring wristbands will be the next top-selling gadget after smartphones and tablets, where growth is starting to slow in developed markets.

The sector has already seen a string of high-profile deals in recent months, including Jawbone, maker of the Up wristband, which raised $250m in venture capital funding in February. Fitbit, its chief rival, raised $43m last August.

While its sales are estimated to be lower, Basis’s hardware is more sophisticated than rival devices such as Up, Nike’s Fuelband or Fitbit’s Flex, all of which focus on counting steps as a way to gauge the wearer’s activity.

As well as a pedometer,the Basis watch includes an optical blood flow monitor, to capture heart rate, and tracks perspiration and skin temperature to assess the intensity of a workout. The device connects to a smartphone app via Bluetooth to process and present the data, along with personalised recommendations for improving fitness.

San Francisco-headquartered Basis said that it would continue to sell its $200 device following the deal, which was reportedly priced around $100m.

Jef Holove, its chief executive, becomes a general manager in Intel’s New Devices group as part of the deal, working across a range of forthcoming products.

“The acquisition of Basis Science provides immediate entry into the market with a leader in health tracking for wearable devices,” said Mike Bell, Intel vice-president and general manager of New Devices. “As we accelerate our position in wearables, we will build upon this foundation to deliver products that bring people greater utility and value.”

Intel’s chief executive, Brian Krzanich, made wearable technology and the so-called “internet of things” the focus of his keynote at January’s Consumer Electronics Show in Las Vegas. The chipmaker is seen as having lost ground in mobile devices to rival Arm and is hoping Basis will help it see greater success in wearables, as Google and Apple prepare to enter the market.

Apple’s forthcoming iWatch, which many analysts expect will be unveiled later this year, is likely to form the centrepiece of a wider health-tracking initiative, with a rumoured “Healthbook” app used to collect data from a range of apps and devices.

Intel’s acquisition of Basis will test consumer willingness to share intimate details about their health with companies large and small.

In a blogpost on Tuesday, Basis promised customers that it would “continue to abide by our privacy policy, respecting all your data”. That policy states that “all personal data will probably be among the assets transferred” in a change of the company’s ownership and that while it may share “aggregated, de-identified biometric data” with other organisations for sales, marketing or research, Basis says it will not “share, sell, rent or otherwise disclose personal data to third parties for promotional purposes”.

Several companies in the wearable and fitness-tracking market have already changed hands. Over the past year, Jawbone acquired BodyMedia, a maker of sophisticated fitness tracking sensors, and Massive Health, which analyses the data generated by such devices.

In a partnership announced on Tuesday, HTC will pre-install software from Fitbit on its latest smartphone, promoting the San Francisco start-up at a time when it is facing challenges.

Fitbit halted sales of its Force wristband last month after complaints that some customers were experiencing a skin rash from the $130 rubberised bracelet. The US Consumer Product Safety Commission said in a recall and refund notice this month that 1m of the devices had been sold in the US, of whom more than 1,000 customers had complained of skin irritation or blistering. Fitbit now faces a possible class-action lawsuit over the issue. Jawbone was forced to recall an earlier version of its Up bracelet in 2011.