Cool Vendors in Wearables That Hear You,

2017
Published: 17 May 2017 ID: G00323690

Analyst(s): Angela McIntyre, Anthony Mullen, Anshul Gupta, Werner Goertz, Annette Zimmermann, Rob Smith

Wearable devices linking users to cloud services can give better user
experiences than smartphones when screens are not needed. Technology
product management leaders at wearable providers must make these
devices more useful by optimizing user interfaces for speech and integrating
with AI solutions.

Key Findings
■ Wearable devices are enabling direct interaction with virtual personal assistants; for example,
Amazon Alexa and related cloud services, or Apple's Siri, with no need to touch the
smartphone. Thus, the primary user interface device may shift from smartphones to wearables
when a screen is not needed.
■ Wearable devices offer more utility to users as app and service providers are including AI
capabilities in their solutions. For example, wearables provide hands-free access to AI-driven
virtual coaches that provide interactive voice communication and real-time, personalized
advice.
■ Wearable devices are increasingly useful for instant messaging when solutions utilize AI for
speech recognition, to summarize messages and for context awareness to deliver messages at
a convenient time.

Recommendations
Technology product management leaders who are building and marketing a device portfolio of the
future should:

■ Create branded virtual assistants for use with your wearable device in specific use cases by
leveraging third-party platforms for virtual assistants, speech recognition, deep learning and
application program interfaces.
■ Offer a convenient voice user interface with VPAs and cloud services, such as Amazon Alexa's
access to Amazon Voice Services, or similar, on wearable products. Provide a mode in which
 the solution is "always listening" for the wake word; or for lower power consumption, access
VPAs from the wearable with a tap to "wake up" the VPA.
■ Ensure wearables provide an excellent experience as they replace smartphones as user
interface devices by including hardware features, such as beam-forming microphones to reduce
errors in speech recognition due to background noise and cellular capability through embedded
subscriber identity module (eSIM) cards.

Table of Contents

Strategic Planning Assumption............................................................................................................... 2

Analysis.................................................................................................................................................. 2
What You Need to Know.................................................................................................................. 2
LifeBEAM......................................................................................................................................... 3
Omate.............................................................................................................................................. 4
Wearsafe.......................................................................................................................................... 6
Where Are They Now?......................................................................................................................7
Pebble........................................................................................................................................7
Gartner Recommended Reading............................................................................................................ 9

Strategic Planning Assumption

By 2022, early adopters will have, on average, four virtual personal assistants (VPAs) they turn to for
advice.

Analysis
This research does not constitute an exhaustive list of vendors in any given technology area, but
rather is designed to highlight interesting, new and innovative vendors, products and services.
Gartner disclaims all warranties, express or implied, with respect to this research, including any
warranties of merchantability or fitness for a particular purpose.

What You Need to Know

The companies highlighted in this report offer wearable devices as the primary user interfaces to
cloud services, and utilize voice and audio as the main modes of interaction. The wearables
become an extension of the cloud and are a step toward the postapp era. Apps on the smartphone
are viewed less and the smartphone remains in the bag, pocket, or in some cases, at home, more
often. The wearable solutions use voice for directly interacting with a virtual personal assistant;
Amazon services, such as for streamed music and purchases; for communicating with group
members; or for providing context about the user's surroundings.

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 Technology product managers are challenged to maintain market growth for their wearable devices
due to a perceived lack of value versus just using the smartphone. To maintain market growth,
technology product managers must ensure their wearable devices offer greater value by making
them more convenient to interact with cloud services and to communicate. Solutions that enable
voice interaction have the potential to deliver better user experiences on wearable devices than
screen-centric solutions. For example, wearables are becoming an alternative user interface to
talking into the smartphone when interacting with VPAs. Individuals are increasingly talking to VPAs
instead of typing text because the quality of speech recognition has improved with advancements in
artificial intelligence (AI). Further use cases for wearables will emerge as VPAs interact with apps
and services on our behalf.

The following providers offer innovative solutions for wearable devices that have voice as a key
element in a variety of use cases:

LifeBEAM: First smart coach VPA solutions for physical training that use AI to provide real-time,
personalized advice via a natural-language speech user interface over wireless earbuds.

Omate: First 3G-enabled smartwatch that provides direct voice communication with Amazon Alexa,
so users can connect with the VPA and cloud services, leaving the smartphone at home.

Wearsafe: First personal safety service that lets users trigger an alarm by tapping their
smartwatches, which sends key details to a select group of peers (friends, family), which determines
the course of action. The $5 monthly fee is disruptive to the business models of traditional mobile
personal emergency services.

LifeBEAM
Tel Aviv, Israel (www.getvi.com, www.lifebeam.com)

Analysis by Anshul Gupta and Anthony Mullen

Why Cool: LifeBEAM offers Vi — an AI trainer for body and mind that is transformative because it
provides adaptive training advice based not only on current versus past performance, but also
contextual data via a conversational user experience. For example, to optimize physical
conditioning, Vi suggests a specific pace in a hillier section of a new running course; advice is
inferred in part from past heart rate data when the runner ran up similar slopes. LifeBEAM's
biometric technology and use of AI engines make it one of the first to provide a virtual smart trainer
for fitness via a hands-free natural-language speech user interface. LifeBEAM has designed
biosensing headphones linked to a trainer (named Vi) driven by AI. The headphones assist in
physical training by providing real-time, personalized advice through audio by seamlessly
connecting through the smartphone to an AI trainer with VPA capabilities. Customized advice is
generated using data integrated from past workouts, such as the users' biometric data,
performance data, exercise regimen and running routes.

Users interact with Vi via an AI-driven natural-language interface that uses Nuance speech
recognition. The audio and speech user interface enables users to stay more focused on their
exercise without interruption to interact with a display on a phone or watch. The real-time, hands-

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 free nature of the product and personalized recommendations deepen engagement and value for
users in comparison with postactivity analysis.

Challenges: Vi is designed to support multiple sports, but its use cases are currently limited to
certain sets of activities, which include running, cycling and walking. Vi's capabilities could improve
over time with further machine learning and algorithms that extend support to other activities.

LifeBEAM's success will be determined by the ability of third-party, cloud-based AI engines to

continuously improve regarding physical training analytics and natural-language speech. LifeBEAM
is designed for individuals and does not offer broader management and functions to support team
activities. A bridge toward multiuser experiences could be made via social matching and pairing of
running, cyclists and more.

LifeBEAM's differentiation around a virtual coach may be difficult to maintain as more wearable
products offer similar solutions in the future. Currently, Oakley Radar Pace offers a smart virtual
coach through sunglasses with earbuds attached. LifeBEAM also faces challenges of improving the
usefulness of recommendations by integrating data from sensors on other wearable devices and
sports equipment. In addition, the interactive user experiences through natural-language speech are
offered only in English, limiting the targeted market outside of North America, the U.K. and Australia,
and background noise can reduce the accuracy of speech recognition. The Vi wireless earbuds cost
$249, including the virtual coach, which is $100 more than Sony Xperia Ear, which also enables
voice commands, but has no virtual coach.

Who Should Care: Technology product management leaders for providers of fitness and wellness
equipment and wearable devices can increase the usefulness of their products and their capability
to provide long-term value by incorporating:

■ Hands-free voice interaction capable of natural-language speech for a more convenient user
interface option with their products.
■ Virtual coaches that use AI engines to make personalized recommendations about training and
then deliver when they can be easily acted on.

Omate
Shenzhen, China (www.omate.com)

Analysis by: Annette Zimmermann

Why Cool: Omate's VPA-enabled smartwatch delivers a truly differentiated experience to users as it
allows direct voice interaction with Alexa and Amazon Cloud Services on a wearable device without
the smartphone. This smartwatch sets itself apart from existing VPA-enabled watches such as
Apple Watch, allowing users to leave their phone at home, making this a truly different experience.

What is especially cool about Omate is its wearable-as-a-service (WaaS) strategy that allows it to
team up with insurance companies (Credit Mutuel Arkea, Groupama) operators (Taiwan Mobile,
China Unicom, Far EasTone Telecommunications, Telenor Group), service providers (SafeMotion,
Limmex) and brands looking for wearable tech and Internet of Things (IoT) devices. Hence, Omate

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 differentiates itself from other smartwatch providers due to its business model as an original design
manufacturer (ODM), which creates innovative designs to test the market and demonstrate the
feasibility of new product concepts.

This strategy has the advantage that Omate avoids direct competition with premium brands such as
Apple and Samsung on smartwatches. Omate opens up its technology and capabilities to partners
that license the technology, especially through well-recognized consumer brands that can provide
additional sales channels.

The combination of a 3G-enabled watch and access to Alexa is source of competitive advantage for
Omate. Key points include:

■ The Omate Rise allows the user to interact with Alexa at any place (3G), including in situations
when the phone is not close (for example, when running or in the gym).
■ The same 2,000 skills that are available on the Alexa Echo in the U.S. work on the smartwatch;
hence, users can place orders (on Amazon or other vendors) or ask for information in the same
way they would interact with an Echo.
■ Alexa, on the Omate Rise, allows two-way voice communication, which is currently not possible
on the Apple Watch. Overall, Siri has a more limited experience on the Apple Watch than on the
iPhone.
■ The user can get things done directly on the watch, such as asking Alexa, for example, to read
out the next appointments, while Siri will defer the user in many cases back to the phone.

Omate has a powerful AI partner in Amazon, and we expect the vendor to further enhance the Alexa
experience and add enterprise-relevant features in the future. The Omate Rise with Alexa (certified
by Amazon) was launched as an Indiegogo project in 2015 and was funded with $269,779, which
was 760% of its original funding target. Crowdfunding projects such as the Omate Rise are an
additional revenue source on the side, but not the main focus for getting revenue.

The vendor concentrates its efforts in 3G devices for two specific target audiences/use cases: kids
and seniors. In its products for the senior target group, Alexa comes into play, leveraging cellular
connectivity to interact with the VPA. It does not sell high volumes to consumers, but instead
partners with CSPs, other service providers, distributors and enterprise organizations that integrate
Omate's technology in their products that are then labeled "engineered by Omate."

Omate's go-to-market strategy is different from many other consumer wearables vendors. It is
foremost an original design manufacturer. It creates relatively small production runs of innovative
designs to test the market and demonstrate the feasibility of new product concepts. This strategy
has the advantage that Omate avoids direct competition with premium brands such as Apple and
Samsung on smartwatches by opening up its technology and capabilities to partners that can help
increase revenue through their sales channels and brand recognition.

Challenges: We can expect that Google and Apple will drive up competition by developing Google
Assistant and Siri to make them more useful on wearables. LG just launched its new smartwatches
with Android Wear 2.0, which brings Google Assistant to the wrist. Sony has its assistant software

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 platform that integrates different messaging services and lets users hear reminders and say
commands on the Xperia Ear. Availability and reach of the Omate Rise is a challenge in that — even
though high-volume device sales are not the focus for Omate — it misses the revenue opportunity
from marketing the "VPA on wrist" to the mainstream consumer market because the Omate Rise is
only a limited edition with less than 10,000 units.

By the end of 2017, SIM cards in wearables, as is in the Rise, will start to be replaced with eSIM. If
Omate does not include eSIM in the next version of the Rise, it will have more difficulty attracting
OEMs. Few users may find enough utility in the Omate Rise to purchase a cellular voice and data
plan for the watch. An example of such a plan is AT&T's fee of $15 per month for connectivity to the
Samsung Gear S3. Without a cellular connection, users would rely on Wi-Fi or a Bluetooth
connection that uses the smartphone as the connection point.

Who Should Care: As a good VPA experience will become key in the next few years, partners such
as CSPs and distributors should take note of what Omate's capabilities are in this space.
Technology product management leaders wishing to offer a smartwatch should evaluate Omate's
technology for integration into their own wearable offerings. Competing smartwatch providers
should assess whether to enable direct contact with Alexa or other VPAs directly through the
device.

Wearsafe
Hartford, CT (www.wearsafe.com)

Analysis by Angela McIntyre and Werner Goertz

Why Cool: Wearsafe's personal safety solution fills an unmet consumer need for a low-cost service
that leverages social networks and popular wearable devices to get users help in an emergency.
Wearsafe has the first peer-driven personal safety service that enables the display on smartwatches
and sports watches to function as a panic button instead of people needing to bring an extra device
or touch their phone to activate an alarm. Wearsafe is unique because its offering combines:

■ Wearable safety-as-a-service on Apple Watch, Garmin-connected sports watches and others

■ Peer-to-peer safety in which the user designates groups of friends, family or others who are
trusted to take appropriate action if an alert is sent
■ A disruptive business model providing service at $5 per month versus $30 to $50 for call
centers

Wearsafe's approach fills an unserved market need for people, especially in the 13-to-26 age range,
to directly alert trusted friends or others (peers), who determine how to help when a person's
physical (or mental/social) well-being is threatened. The alert is sent to the smartphones of
designated contacts (not a monitoring service) along with streamed audio from the smartphone (so
they can hear the context of what is happening) and the GPS location. The peers can coordinate a
response together using IM or press the 911 icon on the app. Users can create different contact
groups and preselect them depending on the situation. For example, the contact list can be different
if going running, versus going to a party, versus working alone.

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 When an emergency situation requires a professional response, the peers can provide all of the
information created from an alert to emergency responder organizations by sharing a unique code.
First responders enter the code into a secure website via most browsers. First responders have
access to streamed audio of the situation, a photo and description of the victim (including medical
conditions), and a mapped location of the victim. First responders can also send secure IM
messages to the victim and all other responders, including the peers. There is no charge to use the
web-access version of Wearsafe for first responders, nor does it require the licensing of additional
software or the purchase of additional hardware.

Wearsafe offers a geofence feature for enterprise clients that directs all alerts to the employer's
designated security contacts when it identifies an employee is "on company premises," enabling
employers to follow their protocols for response. Enterprise clients also have the option of directing
alerts to a professional monitoring service at a price point far below the typical $30 to $50 offerings.

Challenges: Innovative approaches for mobile personal emergency response solutions that target
similar market segments of consumers, university students and lone workers are also available from
Aware360, LiveSafe, RapidSOS and WiseWear, posing competitive threats more than opportunities
for partnerships. At least one other mobile personal emergency response solution, from LifeLine
Response, offers a low fee and the ability to trigger alerts with Apple Watch and Garmin sports
watches, but it does not offer the peer-driven aspect of the service that carries the potential for viral
growth among consumers.

Who Should Care: The Wearsafe solution has implications for product managers at technology
service providers and IT leaders:

■ Product managers of instant messaging solutions should investigate licensing Wearsafe

technology as a new feature or service.
■ CTOs of security organizations for higher education institutions and emergency responder
organizations, including 911 dispatchers, should evaluate integration with the Wearsafe
platform.
■ Chief safety officers of enterprise retailers and businesses that have traveling workforces or lone
workers, such as for taxi and ride-share drivers, personal care and health aides, real estate
agents and farm workers, should inform their employees about Wearsafe.
■ Student safety officers at universities should let their students know about Wearsafe.
■ Retailers of consumer electronics or sporting equipment should consider providing the
Wearsafe fob.

Where Are They Now?

Pebble
Palo Alto, CA (www.getpebble.com)

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 Analysis by Rob Smith

Appeared in "Cool Vendors in Wearable Electronics, 2014"

Why Cool Then: Pebble was one of the first companies to define the contemporary smartwatch
category with a viable product. Pebble was an early market leader, having sold more than one
million units from 2013 through 2016. Pebble smartwatches distinguished themselves from their
competition with a slimmer design, a longer battery life, the ability to interact with iOS and Android,
as well as a large number of apps to increase features and functionality. The Pebble smartwatch
also integrated with smartphones to check messages, screen caller IDs and control music playback.
The final version of the Pebble, the Time Round, offered a color display, a two-day battery life, and
the look and feel of a more traditional watch.

Although Pebble's technology was cool, the way it arranged early funding was especially notable.
Instead of going the traditional investor or venture capital route, Pebble was an early user of
Kickstarter, where entrepreneurs use the internet to crowdsource Pebble's funding from individual
investors. The Pebble Kickstarter project was a record-breaking success. Within less than a week,
the money raised had exceeded any previous Kickstarter project. The final amount raised from
nearly 69,000 individual investors was more than $10 million, becoming the most successful
Kickstarter project ever. Not only did the amount of money raised exceed everyone's wildest
expectations, but the founders also did not have to give up a single share of equity in return. In
doing so, not only did Pebble make itself cool, it redefined the startup sector by showing the world
that there was an entirely new way to fund a company.

Where They Are Now: Once the darling of the wearable technologies sector with a valuation $740
million at its peak, Pebble could no longer compete against much bigger vendors such as Apple
and Samsung. In December 2016, Pebble closed its doors and sold certain assets to Fitbit,
including intellectual property (IP) related to software and firmware development, for the amount of
$23 million — just more than 3% of its formal valuation.

Pebble devices continue to work with original functionality; however, warranty support for Pebble
customers is no longer available. For users that have defective equipment, their choices are to buy
one of the remaining Pebbles still in stock, hope the policy of the retailer where they purchased the
Pebble allows them to return it, or to switch to another brand of smartwatch. It is also important to
note that Fitbit did not purchase the Pebble hardware and will not develop the product further, but
has the option to incorporate portions of the Pebble technology assets it acquired into future
devices.

Who Should Care: Technology product managers, component suppliers and venture capital firms
deciding whether to invest in wearable technology should use the story of Pebble as a caution.

Pebble did not engage in a strong consumer marketing effort to increase brand awareness. The
margins on Pebble smartwatches were relatively low because it was not one of the few well-known
consumer smartwatch brands, such as the Apple Watch.

Pebble's design decisions focused on early technology adopters instead of designing features, user
interfaces and apps targeted on use cases appealing to mainstream consumers. Pebble relied too

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 much on organic growth of apps from third-party developers, which resulted in an ad hoc app
strategy.

Leading-edge smartwatch features evolved rapidly, making it difficult for suppliers to meet quality
standards and resulting in product delays. Pebble released two generations of hardware within
months of each other, creating surplus inventory.

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"Improve Customer Experience for Wearables With Artificial Intelligence"

"User Survey Analysis: Wearables Need to Be More Useful"

"Market Insight: Conversational Commerce — Hype or Reality?"

"Architecture of Conversational Platforms"

"Market Trends: Voice as a UI on Consumer Devices — What Do Users Want?"

"Hype Cycle for Wearable Devices, 2016"

This document is published in the following Market Insights:

Computing Hardware Worldwide
Mobile Devices Worldwide

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