The use of adhesives has long been intertwined with our everyday lives, with one of the earliest use cases dating to circa 200,000 years ago in the form of tar-hafted stone tools. Today, adhesives are ubiquitous – found in packaging, automobile, aerospace, construction, medical, and consumer industries – and dominated by companies like Henkel, 3M, Huntsman, DowDuPont, Sika, H.B. Fuller, BASF, and Pidilite. Continue reading
To gauge the innovation activity in the smart textile space, Lux surveyed the patent landscape and identified 10,051 patents published since 1997 relevant to smart textiles and fabrics. There has been a consistent uptick in activity, showing a greater interest in smart textiles as other enabling technologies, such as conductive inks, sensors, and power systems, further develop. We have previously looked at the innovation occurring in smart textiles (see the report “Innovation in Smart Textiles Moves from Materials to Analytics” [client registration required]) and printed electronics. To evaluate the patent landscape, we utilized a Lux-developed search tool that uses patent data that has been stored and categorized by Clarivate Analytics. The search terms used were conductive fabric, conductive textile, electronic fabric, electronic textile, smart fabric, and smart textile. There were no specific conductive ink terms used in the search; therefore, companies that innovate primarily in conductive ink were not included in this search. Even without including conductive inks, the amount of patent publications specifically around smart textiles is growing; 2016 saw the most-ever patents granted, with a total of 377. Figure 1 shows the total number of patent publications per year, with the data for 2017 current to May 2.
The widely-publicized Samsung Galaxy Note 7 lithium-ion (Li-ion) battery fires add another case in the file of Li-ion battery fires that already includes Dell, Boeing, and scores of hoverboard manufacturers. The fires have not revealed anything new about Li-ion batteries – they store large amounts of energy in a small space and, on occasion, fail in a spectacular fashion. It’s also not surprising to see established players in the energy storage industry suffer very public failures: Sony supplied faulty batteries to Dell laptops, GS Yuasa provided batteries for Boeing’s 787, and Tesla supplier Panasonic has recalled laptop batteries as well. Samsung was hit swift and hard by the recall, halting production while its mobile division’s profits fell 96% and Samsung SDI’s share price fell 25%. This begs the question where did Samsung go wrong?
We still don’t have an official answer from Samsung on the technical reason behind the failures, but we can look at a few key strategic decisions that may have played a role in this disaster. The company reportedly rushed a product to market as it sensed weakness from competitor Apple’s iPhone 7 Plus – the same strategy that led to mass hoverboard recalls, as adequate quality control could not be insured. Additionally, Samsung performed all battery testing and certification in-house, a practice none of its competitors follow. The lab is certified to complete testing, and hasn’t faced battery issues in the past, although a clear conflict of interests exists which may be magnified by rushing to market. These factors, adding to an existing possibility that even the safest Li-ion batteries can catch fire, created an environment within Samsung in which thorough evaluation may not have occurred.
Companies are highly sensitive to the costs of each component in the design of handsets, and rightly so, as the high volume nature of these products means even small changes in component price have significant impact on revenues. However, in making these decisions, a key factor can be left out: risk. It’s difficult to understate the financial burden Samsung will ultimately feel from this fiasco – the company estimates it will cost over $5 billion including lost sales and the direct costs associated with the recall. Considering Samsung would likely sell around 10 million of these handsets, this recall costs the company a staggering $500 dollars per phone – 100 times the cost of the battery.
Financial concerns aside, it’s more difficult to put a price point on the bad press that comes from product recalls, but look to Nokia for an example: Once the world’s largest handset manufacturer, the company saw its value plummet after a 46-million handset recall due to batteries overheating – from which it never recovered. Software can be rushed to market and fixed after release with a patch; however, batteries don’t have a simple fix, and potentially cause physical harm. Those in the Li-ion value chain should take risk much more seriously, factoring it into energy storage considerations along with price and performance.
Cellphones are always hot items entering the holiday season, even this early, but in this case Samsung’s recent Galaxy Note 7 got a little too hot – the company reported 92 cases of its customer’s phones catching fire or exploding. The phone, released on August 19, was recalled just two weeks later as the company advised its customers to shut down their phones, in addition to the Federal Aviation Administration banning use of the phones on airplanes. Samsung has since released statements that this issue only affects the Note 7, and no other devices. Continue reading
The stationary storage landscape is a complex and fragmented one, with battery manufacturers, power electronics providers, software developers, and system integrators all working together to complete projects. In this complex landscape, some partnerships have allowed battery manufacturers better access to the stationary market, while also giving system integrators a more reliable and affordable source of cells. Given this importance, we analyze partnerships in the stationary storage landscape and assess which technology providers have positioned themselves for success – and those that haven’t.
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
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.
What They Said
Sony announced it is spinning off its image sensor business into Sony Semiconductor Solutions Corporation (SSSC). Sony will also spin off its battery and storage media business into Sony Energy Devices Corpation and Sony Storage Media and Device Corporation. SSSC, whose primary focus will be Sony’s image sensors, will be given oversight over R&D, business control, sales and other operations related to these products. In addition to its spin-off, the company acquired SoftKinetic, a 3D vision company specializing in time of flight (ToF) laser-based systems. Shortly after its acquisition of SoftKinetic, Sony announced it will license the 3D technology to Melexis, an automotive electronics company, and partner to further develop the technology.
What We Think
Sony has been dominant in the image sensor market mainly because it has a hold on the smart phone market (with the latest smartphones from vendors like Samsung, Apple, HTC, and Google using Sony’s sensors). In fact, Sony attributes its 23.9% annual revenue growth primarily to its growth of image sensors in 2014. However, the growth of the smartphone market is slowing down; companies like Samsung and TSMC have seen a drop for demand in smartphone related products in their latest quarterly financial filing. In addition, Sony has little to no room to grow in the market, as it already is involved with the majority of smartphone suppliers after winning the Apple iPhone 6 contract over Apple’s old supplier, Omnivision, in 2014. The only perceivable way for Sony’s image sensor division to grow is by branching into the automotive and industrial markets. In particular, ToF sensors in the automotive market will capture a portion of the $2.5 billion LIDAR market by 2030 (client registration required).
In both automotive and industrial image sensors, Sony has been behind the pack; the company only introduced a handful of these types of sensors in mid-2014, while its competitors – Ominivision, Toshiba, and On Semiconductor (Aptina) have been targeting these markets (especially automotive) heavily since before 2014. To play catch-up, Sony had to shed its consumer focus and show that it could differentiate itself. This plan resulted in the spin-out (which allows the image sensor business to grow independently from Sony’s consumer focus) and its acquisition of SoftKinetic. Sony’s timing of its acquisition couldn’t be better; automotive manufacturers have not found their ideal ToF partnerships and are willing to switch to new vendors who can promise cheaper or better components. While SoftKinetic’s technology is on par with other ToF companies, Sony can push its technology forward through its image sensor expertise and developmental partnership with Melexis. Sony has two routes to capture interest from automotive manufacturers; it can provide a ‘smart sensor’ which does all of the software including gesture and facial recognition in one, or provide the component at low cost. Automotive companies should monitor Sony’s progress in the area to see if its development of ToF fits their criteria.
While the Apple Watch and Samsung Gear S smartwatches may function and even appear similar, these are just first attempts at the wearables market. To understand their future strategic direction, we’ve examined the wearable patents of Apple and Samsung since 2010 and analyzed their overall portfolios in three major taxonomy families: applications, form factors, and components (client registration required). Apple and Samsung’s patents cover nearly identical form factors and components, but they diverge when it comes to applications. Samsung is more health-focused, while Apple is focused more on consumer communication. As illustrated in Figure 1, 28% of Samsung’s and 10% of Apple’s patents are for medical devices or health monitoring, while 10% of Samsung’s and 43% of Apple’s patents are relevant to consumer communication like entertainment, gaming, and notification.
Samsung and Apple have dominated the smartphone market for years; however, in the wearable space, the two companies will fight on different battlegrounds. The smartphone competition between Samsung and Apple has been especially intense as the two battle for top market share. However, wearables are shaping up to be a very different competitive landscape, as the two giants focus on different applications. Samsung, with 12% of the whole wearable medical device patent pool (see Figure 2), will find itself primarily competing in wearable health monitoring devices with other innovative medical wearable companies like Zoll Medical and Asante, or wearable component companies like Qualcomm that are still determining how much of the device they should develop themselves. On the other hand, by focusing on consumer communication, Apple will compete with the usual host of competitors from the mobile space: Nokia, Sony, Microsoft, Motorola, and LG are all among the top 10 IP holders for wearable devices designed for consumer communication, not to mention that Qualcomm has actually filed the most consumer communication device patents (see Figure 2).
The roots for this apparent divergence between Samsung and Apple can at least partially be found in the origins of these two companies. While Apple has stayed true to its consumer electronics roots from inception, Samsung has grown from a trading company into a global conglomerate with business units as diverse as health care, financial services, and heavy industries. Therefore, expect wearables to inherently be a more fragmented market than other consumer electronics. Clients should be prepared to develop a broader range of products and channels to market, and perhaps a more diversified technology portfolio, as well.
Lux Research recently participated in the mHealth Summit 2014 – the largest mHealth conference in the world this year. Mingling with several thousand attendees coming from all corners of the world and representing industries as diverse as healthcare, consumer electronics, telecommunications, and athletic apparel provided us with a chance to understand the direction the industry is taking as it approaches a point of mass adoption.
The main stage, featuring power players such as Qualcomm’s President Derek Aberle, Pfizer’s Vice President of Worldwide Innovation Wendy Mayer, Samsung’s Chief Medical Officer & VP of Global Healthcare David Rhew, Kaiser Permanente’s Senior Vice President of Marketing & Internet Services Christine Paige, IBM’s Director of Health Industry Transformation Harry Reynolds, and Walgreens’ Chief Medical Officer & Group Vice President Harry Leider, among others, offered a diverse view on the industry trends from the points of view of some of the largest organizations actively working in the mHealth space. Although the approaches to the topic at hand differed widely depending on the speaker’s backgrounds and current affiliations, a common topic covered by all of them was the question: “What can industry do to enable mass adoption, especially in the consumer market?”
One of the key messages – shared by most of the speakers and attendees – was the importance of simplifying the use of consumer mHealth devices to the point of seamless integration into everyday life. A key feature for future devices will be to enable measurements, data collection and information dissemination that will require no (or minimal) user action. The argument continued that every time an additional step requiring user’s input is introduced, the chance that the user will abandon the device grows significantly.
Multiple examples supporting this view were presented for both, pure consumer devices and for clinical devices intended for home use by patients, alike. Qualcomm’s Derek Aberle shared several findings from a study that looked into the reasons why 2/3 of activity trackers’ users abandon their devices within a couple of months of purchasing them. The numbers showed that most of them got tired of having to remember to regularly interact with their gadgets – interactions such as turning the device on/off, initiating data transfers, charging the batteries on a daily bases, etc. When asked what would have encouraged them to continue using their trackers, more than 80% of respondents indicated that having a device that they would turn on and forget about for weeks, if not months, on end would drastically change their view of the device’s utility.
Joseph Kvedar, Director of the Center for Connected Health at Partners Healthcare, talked about the market adoption challenges from the “engagement gap” perspective. He shared data from a pilot program Partners Healthcare ran in 2011, where the patients suffering from hypertension were given blood pressure monitors connected with the centralized database. They were instructed to upload their measurements daily. Final results showed that the long-term participation was significantly higher (more than 30%) in the control group whose devices automatically uploaded the measurements than in the group of patients whose devices required a single press on the button to transmit the data.
Looking at the experiences from other industries, such as consumer electronics and telecommunications, that rely on a mass adoption by consumers to provide a sizeable ROI, these findings do not represent a surprise. Consumer preferences need to be well understood to maximize the chance of success, and the ease of use and seamless integration into a person’s lifestyle are on the top of the list. Somewhat surprisingly, this seems to be the case even for people whose health may depend on regularly using their monitors – as in the case of diabetics and patients with hypertension. While their #1 priority is the ability of the device to accurately measure the biomarker of interest, having this done in as unobtrusive fashion as possible still ranks high on their wish lists.
Clients interested in the mHealth and broader point-of-care spaces, should pay a close attention to the way their devices will be used and perceived by the end users. The importance of the esthetics and ergonomics is increasing. Adding the industrial design expertise to the design teams seems like a logical step, especially if the final product is intended to be used on a continuous basis in home or office settings.