High Abandonment Rates Indicate the Need for More Compelling Value Propositions to Drive Greater Adoption
I believe GoPro has done this well for this long – soaring more than 180% since its June initial public offering – because it is the poster child for a market sector that is set for a major boom. According to the IDC forecasters, wearable tech will grow 78.4% through the end of 2018. If we want to get on the road to wealth that tech provides, then this is a sector we must cash in on. But I don’t want us to get hurt by messing with a risky stock like GoPro.
That’s why today I’m going to show you how to invest in wearable tech – the entire sector – with a single investment that offers both safety and big profits…
Way Beyond Action Cameras
Don’t get me wrong. I love GoPro Inc. (Nasdaq: GPRO) as a company. I like its story and I’m a fan of its technology – wearable cameras that “extreme” cyclists, surfers, and skiers use to capture and post their incredible stunts. In this market, however, we just can’t justify paying 80 times forward earnings. And besides being a risky stock, GoPro is just a start to the world of wearable technology.
That became abundantly clear Sept. 9 when Apple Inc. (Nasdaq: AAPL) introduced the Apple Watch. Due out next year, the smartwatch can be integrated with the iPhone, used with the new Apple Pay mobile-payments system, and loaded up with dozens of goods from the App Store. More to the point, I think it will be a huge success.
Morgan Stanley agrees, saying that the Cupertino, Calif.-based tech giant could sell 30 million to 60 million Apple Watches in the first year alone.
According to the researchers at ON World, consumers purchased just 4 million smartwatches last year. But ON World predicts shipments will hit 330 million in 2018 – a stunning 8,150% increase in just five years.
And that’s only one segment of the wearable tech market. Wearables also include medical devices, fitness and health monitors, GPS trackers, and virtual-reality headsets.
Google Inc. (Nasdaq: GOOG, GOOGL) has several fingers in the wearables glove. You know Google Glass. Worn as eyeglasses, the system displays text messages and maps, takes notes, records video, takes pictures, and displays video.
And Google is using its Android operating system to make an ecosystem play. Android Wear is designed to work with wearable devices from several developers and makers. As much as I like GoPro, Apple, and Google, there’s a much better way to play wearable tech, as I’ll explain. You see, it’s important to note that we’re still at the dawn wearable tech.
It’s a bit early to try picking the winners from the losers. What we’re looking for now is a way to capture as much upside as possible from the whole sector.
That’s where the Vanguard Information Technology ETF (NYSE Arca: VGT) comes in. It’s an exchange-traded fund composed of 90% technology stocks, most of which are based in the United States. Vanguard Info Tech has some 413 holdings, but more than half of its assets are in the fund’s top 10 stocks. For instance, Apple and Google make up 22.6% of the ETF’s holdings. That right there gives us two major wearable plays. But Vanguard Info Tech holds at least four other wearable leaders. Take a look…
Wearable Tech Vanguard No. 1:
After nearly striking out on the mobile revolution, VGT holding Intel Corp.(Nasdaq: INTC) wants badly to sell its Edison semiconductor chips to wearable developers. And to bolster and promote the entire sector, Intel is sponsoring the Make It Wearable contest, with a $500,000 grand prize for the most innovative product. Besides selling chips, Intel is also making some moves into consumer products.
Earlier this year, the world’s leading semiconductor firm acquired Basis Science Inc. That $100 million play gives Intel a line of wearable fitness devices. Intel plans to further expand into wearables with a line of MICA smart bracelets. The fashion-centric line is the highlight of Intel’s recent partnership with watchmaker Fossil Group Inc. (Nasdaq: FOSL) and clothing retailer Opening Ceremony. The Santa Clara, Calif.-based company also offers Jarvis, a smart headset that functions similarly to digital assistants like Apple’s Siri and Google Now.
Wearable Tech Vanguard No. 2:
Meanwhile, Microsoft Corp. (Nasdaq: MSFT) is focused on the software aspect of wearables. Like Intel, Microsoft largely missed the mobile revolution, but it has no intention of making that mistake with wearables.
Microsoft recently released a software suite for wearable devices, primarily smartwatches. OneNote, a free app designed for Android Wear, is being offered through Google Play.
At the same time, Microsoft will soon release its own smartwatch. The sensor-laden device will serve as a fitness tracker and will sync with iPhones, Android phones, and Microsoft’s own Windows Phone system.
Wearable Tech Vanguard No. 3:
Primarily known for navigation devices, Garmin Ltd. (Nasdaq: GRMN) is not only leveraging off its GPS expertise. With wearables, it’s also focused on fitness and health, which is the company’s fastest-growing division. For instance, Garmin’s fitness bands allow users to track their physical activity, including daily number of calories burned and steps taken as well as sleep patterns.
The company clearly picked a growth segment. According to market forecaster Canalys, we bought 1.8 million smart bands like those made by Garmin last year. That number will likely climb to more than 45 million by 2017. Garmin also makes several sport watches that feature GPS tracking and fitness monitoring. And its Forerunner watches feature touchscreen technology that helps swimmers improve their stroke.
Wearable Tech Vanguard No. 4:
Ambarella makes the video-processing chips that make GoPro’s cameras such a success. And the company goes well beyond the wearable market. It makes video-processing chips used in just about every digital camera we own – auto backup cameras, surveillance cameras, smartphone cameras, TV broadcast cameras. And that, in turn, reinforces one of the great selling points of Vanguard Info Tech – diversification. This ETF not only gives us a broad play on wearables, but also covers a wide swath of other technology, including software, semiconductors, cloud computing, Big Data, and mobile.
Trading at roughly $98.50 a share, Vanguard Info Tech is well ahead of the overall market. Over the past six months, it has doubled the S&P 500‘s 3% return, and it’s nearly 40% ahead of the market over the past year. With its lineup of top tech names – and a concentration in tech’s fastest-growing sector – this is a great long-term play. Vanguard Info Tech is an investment that captures the quick profit potential in wearables while still helping you build a solid investing foundation.
Throw in market-beating performance and you have a real winner on your hands.
Presenter Qinggang Yue demonstrated his team’s remarkable new attack in Las Vegas. Using video footage, they claim to be able to automatically recognize 90 percent of passodes up to nine feet from the target. It’s a simple idea: break passcodes by watching what victims’ press. The difference is that this new technique is much more accurate, and fully automated.
Yue started off his presentation by saying that the title could be changed to, “my iphone sees your password or my smartwatch sees your password.” Anything with a camera will do the job, but what’s on the screen doesn’t need to be visible.
To “see” taps on the screen, the Yue’s team tracks the relative motion of victims’ fingers over touchscreens using a variety of means. They start by analyzing shadow formation around the fingertip as it strikes the touch screen, along with other computer vision techniques. To map the taps, they use planar homography and a reference image of the software keyboard used on the victims’ device.
The technical sophistication of this is really remarkable. Yue explained how using a variety of visual processing techniques, he and his team were able to determine the position of the victim’s finger over the screen with greater and greater accuracy. For example, the different lighting of parts of the victim’s finger helped determine the direction of the tap. Yue even looked at the finger’s reflection to determine its position.
One surprising finding is that people tend to not move the rest of their fingers while tapping in a code. This gave Yue’s team the ability to track several points on the hand at once.
More startling is that this attack will work for any standard keyboard configuration, just a numpad.
How Bad is It?
Yue explained that at close range, smartphones and even smart watches could be used to capture the video necessary to determine a victim’s passcode. Webcams worked slightly better, and the larger keyboard of the iPad was very easy to view.
When Yue used a camcorder, he was able to capture victim’s password from up to 44 meters away. The scenario, which Yue said his team tested, had an attacker with a camcorder on the fourth floor of a building and across the street from the victim. At this distance, he achieved a 100 percent success rate.
Change the Keyboard, Change the Game
If this sounds terrifying, never fear. The presenters came with a new weapon against their own creation: the Privacy Enhancing Keyboard. This context-aware keyboard determines when you’re entering sensitive data and displayes a randomized keyboard for Android phones. Their vision-based scheme makes certain assumptions about keyboard layout. Simply change the keyboard, and the attack won’t work.
Another limitation of the attack is knowledge of the device and the shape of its keyboard. Perhaps iPad users won’t feel so bad about knock-off devices.
If all that doesn’t sound like it’s enough to keep yourself safe, Yue had some simple, practical advice. He suggested entering personal information in private, or simply covering your screen while typing.
|Poll Question||Response, For!||%||Response, Against||%||# Polled||RESULT ANALYSIS|
|GO HERE: http://1drv.ms/1vv87FH|
|If You Own A Smartwatch, How Was Your SERVICE Experience?||Great Technical Support||39%||Horrible Upset Person||61%||36||Almost 2X Dissatisfied buyers, due to Customer Support of Watch Mfg. – This lack of Quality Customer Support could in fact impact future of smartwatch adoption, (esp with small mfg), in an adverse / “bad taste in the buyers mouth” “bad experiences in CSupport are FIXABLE and Highly Important to a Prod/Businesses success.|
|How Would You Prefer a GSM Smartwatch be Shipped?||Manufacturer’s Activated & Setup||38%||You Activate & Setup||62%||87||Buyers seem to Prefer to Setup SIM-Enabled smartwatches vs. receiving the watch pre-setup by mfg. – by only 2/3|
|If a Smartwatch Has Talk/Data Service, Would You Want 2 Buy?||Bluetooth & WiFi||72%||Talk/Data Service 4G||28%||87||Quite obvious here.. Majority 3/4 of those polled, do not see/recognize much benefit to adding SIM-Components into smartwatches, and prefer (or have not experienced standalone) companion devices.|
|IWatch CONNET to PHONE *or* Galaxy Gear S w/3G + NO PHONE?||iWatch w/Phone||85%||Galaxy Gear S w/NO Phone||15%||48|
|More Desirable Plug & Play Feature in a Smartwatch:||2D/3D Virtual Glasses||13%||Tracking with NFC Tags||87%||474|
|Which GSM Android WEAR Watch Would You Buy?||Galaxy Gear “S”||12%||Apple i-Watch||88%||33|
|Which FEATURE is MOST desirable on a Smartwatch?||Home Automation||73%||Car automation||27%||481|
|Do you wear a watch, regularly?||Yes, I Wear a Watch||33%||No, Hardly Ever||67%||589|
|What did you pay or what pay do you expect for smartwatch?||Over $200 w/Wireless||33%||Under $200 w/Wireless||67%||440|
A global survey BI Intelligence conducted among Business Insider readers during October 2014 illustrates what consumers are looking for in a smartwatch, and whether they intend to purchase one. We generated over 2,000 responses from Business Insider readers, who tend to be young, affluent professionals — ostensibly the target market for a smartwatch.
Will people buy smartwatches?
What is it about smartwatches that interest them?
Here are the main takeaways:
The smartwatch only appeals to a minority of possible purchasers.
Of 1,678 respondents who said they planned to buy a new phone in the next six months, just one-fifth said they are interested in buying a smartwatch to pair with their phone.
- Apple has done a better job than competitors selling the smartwatch.
Prospective iPhone buyers were significantly more interested in a companion watch than likely Android purchasers. About 31% of those who said they would buy an iPhone in the next six months plan to buy a smartwatch, more than double the proportion among those buying Android phones.
- These are the top use cases among likely purchasers:
Almost 40% of nearly 400 likely smartwatch buyers told us that the most important benefit of the device is its ability to funnel phone notifications, information, and other content if users happen to be away from their smartphone. Another one-fourth of our respondents said they already wear a watch and the added functionality of a connected watch appeals to them. Health- and fitness-tracking was another popular reason.
- But there is no killer app, and hence most people don’t see the point.
Overall a majority of people still don’t see the point of these devices. This is the reason 51% of those uninterested in smartwatches gave us for why they wouldn’t buy the device. At a distant second, 13% of respondents said they just didn’t like wearing a watch. Until consumers see a clear reason why smartwatches will improve their lives and productivity, the smartwatch category will remain small.
Of course, the next six months could bring about new applications for smartwatches generally and the Apple Watch in particular, but the data shows that the smartwatch still has a long way to go before it is seen as an essential consumer electronics device.