Design – Page 3 – Creative Connectivity

Wearables – Novelty or Necessity?

This year at CES – the market defining Consumer Electronics Show in Las Vegas, the general consensus was that 2014 would be the year when wearable technology took off. There were some dissenting views – some thought it would be the year of Home Automation, particularly when Google went and splashed out $3.2billion for Nest, whilst some felt that maybe the Internet of Things would move from being a playground for geeks to a mainstream business. But if you look at what is actually going into production, it looks like wearables was the best bet. That was reinforced at the Mobile World Congress in Barcelona. Phones and hardware were distinctly passé, the excitement was in what you could wear.

The reason the industry is having this debate is that it’s entering new territory. It’s generally agreed that we are in the post-PC era. Whilst PCs and laptops aren’t dead, they’re a declining market. It’s a long time since anything happened that made people go out and buy a new laptop. Most people don’t change their laptops any more. They wait for them to die and them replace them, just like light bulbs and fridges. Smartphones are facing the same fate. It’s no longer cool for most people to have a new smartphone and there is increasingly little to differentiate between them except price. They’ve reached that plateau where the only thing for manufacturers to do is to make them cheaper and try to saturate the market. Even tablets are entering the same territory, with Android tablets turning them from must-have accessory into commodities.

It’s a problem both for big brand names and also for the ODMs and factories which are churning them out. The latter are desperate to find the “next big thing” to the point that they’re courting new startups for small scale production runs which they would not have countenanced a few years ago. Wearables are the top of the list as the next desirable product. The question is whether that reflects reality, or whether the industry is at risk of believing its own PR?

Why Google swapped Motorola for Nest.

You can normally expect CES to set the technobabble agenda for the first few months of any year, but this year, despite the hubbub about Wearable Devices, Home Automation and the Internet of Things, CES played second fiddle to the much bigger announcement of Google paying $3.2bn for Nest. On the face of it, it’s an outrageous amount to pay for a hardware company. The announcement a few weeks later that they were selling off Motorola Mobility for around the same amount made it look like some giant game of cards.

The initial reaction to the Nest acquisition from many commentators was that this just validated their view that CES was heralding the start of the Home Automation market. Long term players, like Control4, saw their share price rocket overnight. Most start-ups in this space have been complaining that their VCs dedicated their next board to persuading the CEO to redesign their business plan in the hope of emulating the Nest sale. On the other side, doomsayers predicted the demise of anyone else in the field as the Mountain View leviathan would take over Home Automation.

Most of what has been written feels like a knee-jerk reaction. What surprised me most was the speed with which Google rushed to say that it would not be using the data from Nest’s thermostats. That announcement came too quickly to be a reaction to media speculation about the data behemoth’s new-found ability to learn even more about users. It made no sense given Nest’s purchase value. It was like a top restaurant hiring Heston Blumenthal and then saying they were only employing him to go out and collect their lunchtime sandwiches. Google is about data. Why pay $3.2bn and then throw the associated data opportunity away? It implies that there’s a lot more behind this acquisition.

Smart Wrist Good. Smart Home Bad.

Or so it appears if you look at where the funding’s going. This week Jawbone, maker of the Bluetooth headset and more recently of the UP wristband, managed to raise $93 million in debt financing based on sales of its new products, with the rumour of a further $20 million in VC funding to come. It’s not alone. Earlier this year Fitbit, founded on clip-on devices, but now another player in wrist real estate had VCs falling over themselves to give it an additional $43 million.

In contrast, the smart home market has begun to look decidedly unexciting. After the Nest love-in, which raised them $80 million at the start of the year, their German rival tado only managed a measly $2.6 million from its previous investors. I’d always tended to discount the Nest fundraise, not because of the product, but because of their heritage. Ex-Apple staffed start-ups in California with slick products seem to get VCs wetting themselves in much the same way as followers of the cult of Apple do at the launch of a new iPhone.

If you take a look at the media coverage, it’s also pretty obvious where everyone considers the action to be. It not what we live in – it’s what we wear on our wrist. Investing in Smart Home looks rather dumb.

Potatoes win Prizes – Gamification, Loyalty and Viggle

Over the past few years I’ve been working in the mHealth and smart energy sectors. Both have a common belief, which is that consumers will do things that are in their own interest – namely spend time and effort in order to save themselves money and keep themselves fit.

That mantra has seen a raft of new companies appear in each sector, directly targeting the public with products that attempt to change consumer behaviour or lock them into a brand. In the mHealth sector most have realised that medical or clinical approaches are too difficult, so have euphemistically renamed exercise and dieting as health and fitness. Meanwhile, energy utilities are attempting to improve their image by rolling out customer engagement programs, whether that’s in the form of green button apps in the US, or in home energy displays in the UK. Both hope that this will result in customer loyalty for their brand, attracting new customers and retaining existing ones.

In recent months both sectors have latched onto gamification, often as a result of hiring strategic marketing people from web and mobile phone companies. They’ve taken to gamification like enthusiastic bricks to water, hoping it will change the way consumers value their products and buy from them. I think they’re sadly mistaken. As proof, I’d cite the success of Viggle, which illustrates exactly what the average consumer wants from gamification. Viggle let’s you win points by watching TV. It’s nothing to do with better health or savings on your energy bill – it’s the couch potato dream of free pizza for mindless inactivity.

3D Printing, Kickstarter and the TSB

Today, the UK’s Technology Strategy Board (TSB) announced a funding competition to develop new 3D printing technology. It’s called “Inspiring new design freedoms in additive manufacturing / 3d printing” and is offering funding from £100k to £1.5milion for collaborative, business-led design projects to overcome some of the “dirty secrets” of 3D printing, or additive manufacturing, with a total funding pot of £7 million.

Over the last year I’ve been watching the rise of 3D printing projects on Kickstarter, as they’ve progressed from fairly simple ones to the more recent, high profiles successes, such as the Formlabs Form 1 3D printer, which is a project to commercialise a printer, software and compounds. That one project alone has attracted just under $3 million in funding from over 2,000 backers, over 1,000 of whom will end up with 3D printers by next May.

Which made me wonder what the TSB is going to use my tax-payer’s money for in this competition, as it looks as if there is already a perfectly workable funding model to develop 3D printers. Or do they think that 3D stands for Dead Duck Donations?

Will you still text me, will you connect me, when I’m sixty four?

Now that the networks are growing out of their teens, is it time for them to think about a market they’ve largely ignored? Given the current pain that they are suffering from the youth segment’s bandwidth-obese usage of their “eat all you can consume” data plans, you’d think that they might want attract a target audience that offers the prospect of a more reliable revenue stream.

There’s an important conference coming up in London on 26th October that promises to address the issues that have limited success so far – Mobile Phones for the Senior Market. It’s important because there are some fundamental lessons to be learned and things that need to be changed if the networks are to approach the older generation with the same degree of attention that they currently lavishing on their twenty-something users. The resulting challenges need to be addressed, not just by the networks, but also by product designers and retailers.

The mobile phone business is now the largest volume segment of the consumer goods industry. Despite that achievement, it is an industry that is still remarkably young. It’s debatable whether it is actually mature enough to have addressed real segmentation yet – instead it’s still at the stage of development where it tends to concentrate most on customers of its own age – late teens. That could be a costly mistake. By ignoring the specific needs of older users, the mobile industry is missing a major market.