Tag Archives: Intel

Augmented and Virtual Reality Technologies Hit a VC Hype Cycle; Enter with the Right Tools for Success

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Venture capital (VC) firms have invested $7 billion into electronic user interface (EUI) technologies between 2005 and today, but momentum is building in the space with a record $1.3 billion invested in 2014, and 2016 already seeing $1.1 billion invested as of the end of Q1. There is plenty of nuance under the growth of VC in this sector, however. The technologies receiving the funding have evolved significantly, as newcomers like augmented and virtual reality have been garnering much of the funding over the past several years.

2D displays technologies have received the most funding of any individual technology area over the entire time period, receiving almost $2.6 billion, unpinned by massive rounds such as the $700 million whale into Plastic Logic in 2011. That said, augmented reality (AR) investments have taken off over the past several years, growing steadily from about $8 million in 2005 to $38 million in 2012, and then significantly expanding to $669 million in 2014 and $175 million in 2015. As of March 2016, AR has already received $856 million, due to a $793 million round raised by Magic Leap. Virtual reality (VR) has also seen a significant spike, growing from $32 million in 2012 to $371 million in 2015. Of the user input technologies – touch controls, voice controls, gesture control, and eye tracking – touch control received the most VC investment, with $560 million. Voice controls was second with $335 million, followed by gesture with $133 million, and eye tracking with $94 million. Touch controls have steadily increased almost every year from 2005, when $12 million was invested, until 2014, when $119 was invested, but fell off in 2015 with only $31 million.

Within this landscape, it is interesting to see what corporate investors – investors with presumably a better bead on the market – are investing in. Corporate venture capital (CVC) has become more active in recent years, participating in more than 70 funding rounds since 2014. Intel, Samsung, Qualcomm, Google, and BASF were the most active CVCs, but their portfolios vary widely. Intel Capital is the most active CVC in the field, making 47 transactions in 34 companies, far ahead of others. Within Intel’s transactions, the company had nine deals in 2D display companies, eight in voice control, seven in AR, six in touch control, and 17 in other technologies. Google and Samsung made investments throughout the virtual reality ecosystem, having made investments from hardware to content generation to social media, while Intel maintains a broader portfolio across 2D displays, augmented reality, voice controls, touch controls, and virtual reality. In this sense, the leading CVCs are building out entire AR and VR ecosystems.

CVCs in this space, although still relatively less active than institutional VCs in seed and A rounds, show more interest in these higher risk investments than is typical with 17% of CVC transactions invested in the seed round. The lead CVCs in the space traditionally operate with higher risk profiles than the broader CVC group, but this also means CVCs coming from more conservative sectors will either need to change their risk profile and engage sooner or partner effectively in the CVC community with the Intels, Googles and Samsungs of the world. Despite the higher than usual risk profile, CVC-backed companies still have a better outcome profile than the general venture-backed cadre. Out of the 98 CVC-backed companies, 17% were acquired, 3% went IPO, and zero went out of business. In comparison, the same figures for general VC-backed companies were 12%, 1%, and 5%. Needless to say, there is some clear frothiness in the EUI startup space so investors should enter at their own risk, especially in AR and VR areas. Thankfully, there are predictive analytics available for which startups will be successful.

By: Tony Sun

Provision Moves Towards Displays-As-A-Service: What Does It Mean for the Future of IoT User Interfaces?

We recently spoke with Curt Thornton, CEO of Provision, about the company’s announcement of expanded shipment of aerial imaging coupon kiosks to Rite-Aid (250 units in February 2016 and a plan of 3,000 units in the next 12 months to 18 months). The kiosks, dubbed “3D Savings Centers,” allow users to view floating 2D or 3D images with depth of view without glasses. Via a separate touch screen, these kiosks allow retail store consumers to access promotions, print coupon offers, and load coupons to their loyalty cards. According to Intel, which developed software for the kiosks, the Savings Center can perform video analytics to determine the age and gender of customers standing in front of it and play content and advertising suitable for the audience. As a result, for in-store high-value products, the Savings Center has redemption rates of 85%; for out-of-store products, it can improve the redemption rate from about below 5% to between 10% and 40%

Curt said the company runs two different revenue models. For small sales amounts, like for trade shows, the company direct sells displays or kiosks to its customers. For large sales amounts, like for Rite Aid, Curt said Provision forms a joint venture with the customer and generates revenue by commission from the used coupons, but would not disclose the expected time to generate as much revenue as selling one of the units.

Provision’s aerial imaging technology is not as innovative as newer 3D display developers like Leia (client registration required); however, by combining its display with analytics, Provision can quantify its impact on sales. Continue reading

Surviving and Thriving as the Internet of Everyone Evolves to an Ubiquitous Reality

The Quantified Self (QS) movement began with fringe consumers obsessed with self-measurement, but today’s Internet of Things (IoT) – with sensors on and inside bodies, connected cars, and smart homes, offices, and cities – is expanding it to include everyone. Consumers will not have a shortage of devices or data to choose from anytime in the near future. Looking out further, to 2025, three specific factors will drive the technical evolution of the QS/IoT as a computing platform, each with implications for consumer relationships: improvement of individual devices; integration, from aspects of inner self to a holistic view of inner, outer, and extended self; and intervention in consumer actions.

  • Improvement: Before too long, gimmicky and overpriced devices will disappear from the market, while runaway hits will make headlines (and millions of dollars). From 2005 until now, sensors have driven QS – specifically, sensors attached to or focused on humans. An early example is fitness wearables, but they’re already a commodity; today’s Samsung, Google, and Apple smartwatches are a natural evolution. Bragi headphones now do health tracking; Samsung’s Artik platform, Intel’s Curie and GE’s GreenBean offer startups an easy way to create consumer IoT devices. Image sensors – cameras – enable gesture interfaces and new channels like lifelogging, where users of Twitter’s Periscope and Facebook’s Facescope live-stream their lives.
  • Integration: Fitness trackers and action cameras capture data on or next to consumers’ bodies. IoT technologies quantify consumers’ “inner selves,” and marketers can learn as much from them as they have by examining purchase histories, web surfing habits, and other digital footprints. Other IoT datapoints include vital signs from exercise, sports, and adventure wearables; food, from precision agriculture to smart utensils like HAPIfork, to microbiomes and Toto’s smart toilet; and medical bioelectronics, personal genomics, and mood- and mind-monitoring like Neurosky. The IoT tracks consumers’ outer lives of family via smart baby bottles and wearables for pets, and extended selves via connected thermostats, diagnostic dongles in cars, and image-recognition systems in stores and city streets.

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ESCOs Key to Unlocking the $5 Billion Energy Efficiency Retrofit Market in the U.S.

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Schneider is building a building systems integration and IoT play. Schneider Electric has some notable partnerships in the U.S. market, which differentiate it from the competition. The company boasts several technology partners in the energy-IT space, such as Cisco and Intel. Digging deeper, we find relationships with Verdiem and JouleX (now part of Cisco), companies that target energy efficiency of IT infrastructure and networks. In the same vein, partner Belden specializes in signal transmission, and HMS Industrial Networks and Niobara R&D are both playing in the Internet of Things (IoT) and communication of industrial equipment. In addition, the company has engaged start-up KGS Buildings (client registration required) to build its energy analytics software to allow in-depth analysis of building data in well-instrumented buildings. From this focused network, it is clear Schneider is making a play both in building energy data analytics – which can be a strong ECM-identification tool in its own right – and in the industrial segment.

Johnson Controls leverages its facility management position. Separate from its ESCO business, Johnson Controls operates Johnson Controls Global Workplace Solutions (GWS), a facilities management services company, which operates real estate assets totaling more than 1.8 billion ft2 in more than 75 countries.i Perhaps predictably, Johnson Controls has connections with Jones Lang Lasalle (JLL), a leading real estate services provider. In addition to the highly visible, deep retrofit of the Empire State Building in New York City, which involved Johnson Controls and JLL, the two companies have cooperated to help drive retrofits as part of the leasing and building-out cycle in commercial buildings. In addition, the company has partnered with VFA, which provides a facilities management and capital planning software tool. VFA has worked with organizations like the U.S. General Services Authority’s Public Buildings Service, which is the largest real estate company in the U.S. Such a partnership allows Johnson Controls to dovetail capital planning with energy efficiency upgrades to form differentiation in its facilities management capabilities. Not only would GWS have the ability to identify retrofit opportunities, but it could deliver them with its ESCO capability. Johnson Controls has also engaged start-ups Retroficiency, Optimum Energy (client registration required), and most recently BuildingIQ (client registration required). The BuildingIQ partnership actually allows this energy data analytics software to be made available through Johnson Controls’ new Panoptix building automation system. Here Johnson Controls has leveraged not only its facilities management, but hardware business lines to deliver ESCO services.

Building materials companies left out in the cold. One conspicuous absence in the U.S. ESCO partnership landscape is that of building materials suppliers. The Johnson Controls-BASF link on the map is misleading, because it is not related to building materials but rather facilities management. There are two notable relationships, however: those of Schneider Electric and Sage Electrochromics (now a part of Saint-Gobain Group), and Johnson Controls’ connection to Alpen Energy (a part of Serious Energy). While Johnson Controls and Schneider have led the pack with their engagement of start-ups for data analysis and even hardware for systems, we have not yet seen significant deals with materials companies to facilitate envelope retrofit activities; these two partnerships touch only on glazing, leaving room for other building envelope solution providers.

Source: Lux Research report “Partnering to Unlock the Trillion Dollar Opportunity in Energy Efficiency Retrofits” — client registration required.

Views from the Summit

Lux Research CEO, Dennis Philbin, welcomes guests to the sixth annual Lux Executive Summit, Innovation Without Borders: Industry, Technology, Geography. Over 300 leading innovators and investors attended the event held in Boston from May 1-3 this year.

Lux Research CEO, Dennis Philbin, welcomes guests to the sixth annual Lux Executive Summit, Innovation Without Borders: Industry, Technology, Geography. Over 300 leading innovators and investors attended the event held in Boston from May 1-3 this year.

Innovators and investors gathered this month at the sixth annual Lux Executive Summit to take measure of the opportunities and challenges emerging in the wake of a devastating global recession. Among the prospects they discussed were the rising technologies driving developments in energy, the environment, advanced materials, and human health – technologies that will require not millions of investment dollars to advance, but billions. The potential opportunities not only signify better profits, but the possibility of catapulting beyond one-time rivals. Such success, however, will require more than interdisciplinary collaboration. It will demand international coordination.

This week, Lux Populi highlights some of the insights and observations tracked by Lux Research analysts from select Intelligence Services – beginning with our newest, the Lux Research China Innovation service.

China Innovation: China’s two markets
China’s influence and opportunities were a prevalent theme at the Summit, and figured prominently in a keynote presentation from Jack Perkowski, the founder of JFP Holdings, and past CEO and founder of ASIMCO, a major Chinese automotive components manufacturer. Perkowski highlighted the importance of an empowered China-based management team, as well as an understanding of local perspectives around cost as critical aspects for success. Of particular interest were Perkowski’s comments around product (and hence technology) disparity needed to serve China’s two distinct market segments: namely the high-end and low-end consumers.

Foreign companies typically target the high-end, focusing on high-performance and quality. This domain, however, faces intense competition from domestic companies whose technologies are becoming increasingly comparable but offer a cost advantage. Fuelling the adversity is the implementation of policies and regulations by Chinese authorities to ensure the competitiveness of local providers. So, expect an incessant market demand for superior products and services in China. In 2010, China’s gross domestic product (GDP) grew an average annual rate of 11.2%, and the per capita disposable income of urban residents and net income of rural residents rose by 9.7% and 8.6% respectively. With increasing affluence, rising incomes, and government efforts to propel technology momentum, China may potentially outshine Japan as the world’s largest consumer of high-end goods by 2015. However, we note that this does not necessarily translate into a massive shrinkage of the low-end market, which still strives on a free industrial approach.

While clients selling products into China are no doubt aware of the increasing pressure and competition in the high-end market, many struggle to develop strategies, let alone products, to profitably access the lower end consumer. Clients must use the teams present in emerging geographies such as China to identify opportunities and develop products that fit the local market. These teams will no doubt have the highest probability of developing offerings that meet the local need, but they will also open up reverse innovation opportunities already realized by the likes of GE and Caterpillar.

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Summit panelists and attendees shed light on key themes in solar
The sun never sets on emerging technology markets, and Lux Research’s Solar analysts covered a lot of ground at the annual Summit. Among the highlights: Senior Analyst Ted Sullivan gave a presentation entitled, “Taking Away the Punchbowl: Forecasting the Solar Industry in an Era of Declining Subsidies,” which focused on the radical demand shift away from core markets like Germany and Italy and towards emerging markets elsewhere. Whereas Germany and Italy accounted for roughly 2/3 of the market last year, Lux Research expects 1/3 of the market demand for 2015 to come from new countries not yet on the solar map. India, South Africa, and even Brazil are leading contenders to become large solar markets as they introduce subsidies amidst a continuing fall in module prices.

Meanwhile, during networking sessions, Analyst Pallavi Madakasira noted a very active debate whether corporate venture capital (VC) would work better than private VC for emerging technology providers in the PV space. As PV industry consolidations increase, many attendees seemed to favor corporate VC’s ability to support and position a company over the long term. The topic was addressed more directly by the panel “Crossfire: Can Corporate VC and Private VC Get Along?“, which consisted of VCs on both sides. In general, Lux Research believes that corporate VC could work better for later-stage start-ups that are in the process of ramping up their production capacity, because:

  • Later-stage start-ups are better positioned, with an established pilot production process, “de-risking” the investment for corporate types
  • They have typically scoped out their targeted end market, and can clearly map to an existing business unit at a corporate investor
  • Corporations bring significant expertise in scaling manufacturing facilities (Consider, Intel’s recent consulting engagement with Miasolé, for example), and
  • Most importantly, corporations often possess the balance sheet and access to finance required to scale manufacturing facilities costing into the billions of dollars