How wearable component, device, IT, application, business service providers respond to Wearable market under the Individual Enterprise era

1. Wearable for the individual enterprise
Richard Jo,
16th June 2015,
Conference 2015, Seoul

2. 11 June 20152
Table of contents
Where to find out opportunity
Implication for entry & growth strategy
Strategy direction for wearable players

3. 11 June 20153
Current Wearable market is not sizeable, but it is expected to
grow
6 19 42 65 93 112
1,019
1,288
1,445
1,600
1,741
1,874
0.6%
1.5%
2.9%
4.1%
5.3%
6.0%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2013 2014 2015 2016 2017 2018
Wearable
Smartphone
Wearable vs. Smartphone Not sizeable, but growing fast
Wearable device market is 19M unit and 2.9B value in 2014
Wearable device market is relatively smaller than
smartphone, 1.5% of smartphone device market
It is in the early growing stage, expected to grow faster
 Consumer interest and willingness to buy is higher,
but currently low penetration (6% up to 60%)
 Supplier investment trend
 IoT as the new computing driver
Source: IBM analysis, IDC
(m) Unit % of Wearable/
Smartphone
shipment

4. 11 June 20154
Wearable can be categorized into General Computing and
Specific Use
Specific UseGeneral Computing
Connectivity Mixed SyncingAlways Connected
Device mfg.
Apparel Firms and
Smaller Tech Firms
Tech Giants
Form Factor
Wristband, Clip-on,
EmbeddedWatch / Glasses
Functionality Single FunctionMulti-Function
Email Maps
User Consumer
Consumer/
Enterprise
Source: IBM analysis, IDC, Deloitte

5. 11 June 20155
General Computing category will exceed Specific Use category
and to lead the market growth
Wearable device volume by category
5
15
30
41
48 50
2 4
12
24
45
62
-
10
20
30
40
50
60
70
2013 2014 2015 2016 2017 2018
Specific
General
Wearable device value by category
0.5
1.7
3.3 4.3 4.8 4.7
0.5 1.2
2.9
5.3
11.3
15.9
-
5.0
10.0
15.0
20.0
2013 2014 2015 2016 2017 2018
Specific
General
Comment
Innovator’s wearable devices take the majority of the
market, which is mostly in Specific Use category
Value of General Computing will exceed that of Specific
Use in 2016, as the ASP is higher
General Computing category will grow faster than
Specific Use with the strategic focus from the tech giant,
including Smartphone manufacturers, IT service
providers, Telco, and App developers
Source: IBM analysis, IDC
(m) Unit
(b) USD

6. 11 June 20156
While Consumer take more, Enterprise segment will grow
faster, because multiple functions will be used at work
Unit Share by user type
93% 95% 93% 91% 88% 86%
7% 5% 7% 9% 12% 14%
0%
20%
40%
60%
80%
100%
2013 2014 2015 2016 2017 2018
Consumer
Enterprise
Value share by user type
86% 87% 86% 83%
74% 70%
14% 13% 14% 17%
26% 30%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2013 2014 2015 2016 2017 2018
Consumer
Enterprise
Comment
Multiple function support (e.g. email, scheduling) will be
adopted by the Enterprise as Smartphone used at work
Currently, smartphone using rate at work both employee
liable and corporate liable is about 25% from the total
(this figure considered for user type share calculation)
As the market grows led by General Computing category
and personal devices are encouraged to use at work
(e.g. BYOD), Enterprise will be the growing user type in
mid to long term
Source: IBM analysis, IDC

7. 11 June 20157
Mega trend is that Enterprise have integrated various devices
into the workplace and expanding rapidly
Key Fact Mega Trend
Smart
Device
Computing
Mobile
Applications
for Enterprise
Bring
Your
Own
Device
While prices of smartphones and tablets are
declining1 (8%), their capabilities and
applications continue to increase
Market growing at CAGR 27%2 - $28b in
2013 to $58b in 2016
BYOD and Enterprise Mobility3 market will
grow from $72b in 2013 to $284b in 2019
Availability of this standard hardware and
software platform for variety of use cases is
fueling enterprise adoption
70% of enterprises4 are deploying
applications for businesses
Research states benefits from BYOD include
improved employee satisfaction, employee
productivity, and greater workforce mobility5
Source: Deloitte, IDC, VisionMobile, Greyhound Research, Capgemini

8. 11 June 20158
Meanwhile, the emerging of On-demand economy and the
double technology revolution of Mobile and Analytics sparks
the Individual Enterprise
Systems of
Engagement
Systems of
Insight
Systems of
Records
Insightful Enterprise
 Intelligent organizations
 Automated processes
 Empowered individuals
Individual Enterprise
 Integrated ecosystems
 Insight at the point of
engagement
 Contextual actions in the
moment
Functional Enterprise
 Efficient organizations
 Streamlined processes
 Focused individuals
Situational Enterprise
 Networked organizations
 Dynamic processes
 Responsive individuals
Tablets, Phones,
and Wearable
Desktops and
Laptops
Mainframes
and Minis
Analytics
Mobile
Increase of Personal
contributor
Increase of Mobile
workers
Increase the real-
time business
Technology
development
Mobile Only
On demand
economy
Source: IBM analysis

9. 11 June 20159
Individual Enterprise can add the innovative business value,
thus the enterprise will focus and invest its enabling systems
Create new business value
Mobility compresses time between situations and action
Mobility step changes productivity growth
Mobility allows enterprise redesign
Powered by analytics
Mobile analytics drive real-time situational understanding
Mobile analytics brings in-the-moment intelligence
Mobile analytics accelerates the ROI of information
Designed first for mobile
Mobility redefines operating models
Mobility is the foundation of new models of engagement
Mobility optimizes for the end-user
Unleash empowered employees
Mobility reconfigures individual workflows
Mobility stimulates skill acquisition
Mobility empowers individuals to create their own work experience
Characteristics of Individual Enterprise
Source: IBM analysis

10. 11 June 201510
Strategic focus will need to be the General computing for
Enterprise, although Consumer watch market establishing first
MarketAttractiveness(Growth,Size)
Very High
Not at all
Moderate
High
Low
Technology Newness (Time to market)
Totally Not at allVery Moderately Slightly
Watch for
Consumer
1
Watch for
Enterprise
2
General Computing
Specific Use
Glass/ Helmet
for Enterprise
3
Band for
Consumer
Band for
Enterprise
Glass/ Helmet
for Consumer
Embedded for
Enterprise
Embedded for
Consumer
Comment
General computing need to be the focus
area, from Watch to Glass
Consumer Watch segment can be the very
short term focus, while Enterprise Watch
segment need to be the top priority
For Enterprise segment it is critical to
provide the use case at work in order to take
the market opportunities
Offering-Market opportunity map
Source: IBM analysis

11. 11 June 201511
Table of contents
Where to find out opportunity
Implication for entry & growth strategy
Strategy direction for wearable players

12. 11 June 201512
Finance and Healthcare will be the most feasible vertical
market for Individual Enterprise General Computing
Comment
Market feasibility is higher in Finance and
Healthcare in terms of the revenue size, value
added impact, and the relationship with General
Computing
Financial market spans mainly Banks and
Insurance. With the proliferation of Sales Force
Automation in this area, the type of Individual
Enterprise increase rapidly. Watches for
supporting SFA will be used
Work at hospital requires wearable devices for
the accuracy, productivity and convenience. As
well Healthcare vertical is familiar with wearables
as it already started collect and analyse the data
from the patient’s wearable devices
Source: IBM analysis, IDC, Frost & Sullivan, Morgan Stanley
HighLow
Overall
Commercial
Industrial
Consumer
Related to
General Computing
Impact of value
added by Display
Market feasibility assessment by industry
The size of each
circle represents the
business value
Feasibility by 2018

13. 11 June 201513
As no one dominate the value chain, the Enterprise Specialist
will be the best revenue model providing end to end solutions
Value Chain structure
HW SW Contents Dist. Access
Processor Sensor Display Device OS NW proto. App. Media/Data Retailer Cloud CSP
General
Computing
Specific Use
Many Telco
N/A
Personal Data
N/A
HW SW Contents Dist. Access
Processor Sensor Display Device OS NW proto. App. Media/Data Retailer Cloud CSP
General
Computing
Specific Use
Many Telco
N/A
Personal Data
N/A
Health
care
TBD N/A
Other
Vertical
TBD TBD TBDEnterprise Specialist model
Enterprise
Specialist
As a service
model
CurrentNearFuture
Source: IBM analysis, Deloitte

14. 11 June 201514
Especially, sustainable and robust use case will be the key
success factor in the enterprise market entry & growth
Individual enterprise based on Smart Watch
Use case as the Key buying factor for Enterprise
Use cases for Smartwatch are definitely needed
(Watch 15% and Smartphone 14% are replaceable by Wearable purchases)
Definite needs of Use case at work
 Healthcare
- Patient Care
 Finance
- SFA w/ salesforce.com
19%
21%
47%
34%
Share health or other data
Monitor Health metrics
Keep track of exercise
Work Purpose
37%Track of everyday activities
61%
40%
12%
11%
Too expensive
Waiting to see new products
Uncomfortable to wear
Not useful
11%Design not discrete enough
Top wearable use case
Reasons for NOT purchasing Wearable
Source: Morgan Stanley 2014

15. 11 June 201515
Quality use Case stems from Strong Eco-system (vertical), rich
experience (back-end service) and Always on technology
Strong
Eco-
system
Rich
Experience
Always-On
 Platforms that can operate with a number
of devices, allowing customers to use
their smartphones for a growing array of
Wearable Technology
 Integration of several sensors (such as
accelerometer, camera, etc.) allowing
rich customer experience.
 Back-end services (Multidimensional
Analytics and connectivity with other
sensors) enhance customer experience
 Technologies like Bluetooth 4.0 enable device to instantly connect, allowing
wearable device to work under time critical conditions such as healthcare
Key Attribute of Wearable use case
Source: Deloitte

16. 11 June 201516
Table of contents
Where to find out opportunity
Implication for entry & growth strategy
Strategy direction for wearable players

17. 11 June 201517
Three Strategic direction is recommended to the display
business
Strategic Alliance with Smart
device general computing
makers
Align closely with Enterprise
Killer Apps or IT service
provider both in technology
and business
Select vertical markets and
aggressively establish and
participate the eco system
 Tech Giant, smart device
manufacturer will take the
HW leadership including OS
and other components
 Eco play is the key to
success, component vendor
also can lead the eco system
by aligning with App
developers or IT service
providers
 To choose the vertical is
critical because it defined
what to delivery and who to
work with
 Healthcare, Field
maintenance, and Public
safety can be the candidate

18. 11 June 201518
Firstly, select the vertical markets and aggressively join or
create the eco system
Field maintenance Public SafetyHealthcare
 A step-by-step
prompts for repairs
and personal
detailed training to
field service
 A building blueprint,
hazardous materials
and health tracking
information to
firefighters
 To access patient
and relevant
information when
perform surgery or
care the patient
 Employer sponsored
wellness program
Finance
 Prompt information
alert with sales
analytics, sales &
marketing Sales
process,
 Employee
authentication for
access control
Retail & Logistics
 Inventory tracking
and restock
notification at store
 Glass or Watch with
real-time medical
information analytics
 Glass with real-time
personalized
contents (e.g.
manuals, videos)
 Helmet with the heat
sensors and
embedded biometric
with endurable
materials
 Watch with real-time
analytics and
biometric support
 Watch or Glass with
real-time processing
computing
 Augmedix with
Goole
 Medtronic, Philips
 Vuzik with Epson,  N/A
 Salesforce.com, IBM
 Apple, Samsung, LG
 SAP with Vuzik
helmet
Use Case
Tech.
Require.
Players
(examples)
Source: IBM analysis, Morgan Stanley 2014

19. 11 June 201519
Secondly, work closely with the enterprise wearable Apps.
developer and/or IT SVC provider both in business use case
and technology
Cloud &
Backend
Service
CSP
Contents
Provider
App.
developer
Operating
System
Sensors
Processor
NW
Display
Others
Device
Manufacturer
Enterprise
Device
Vendor
Enterprise Wearable Eco system Eco Play example
Sensor vendor develop the use case and to align with App.
Developer and Device manufacturer by leading the business
innovation for patient care in the hospital
 Healthcare
IT SVC provider to align with Device vendor for Enterprise market
entry with the new service development
 Salesforce.com to work with Apple for wearable apps.
Development
Use case innovation can be stem from display business
especially for healthcare or public safety hands free required
while complex information need to be shown on display
Source: IBM analysis

20. Lastly, align strategically with Smart device general computing
makers
Introduction Early Growth Late Growth Early Mature
 Large OS
installed base
 Wide alliance
with App.
Developers
 Can position as
the IT service
providers
Market share of Top3
in Wearable device
general computing
Competition for Wearable General computingMarket growth & Top3 M/S
 First mover
advantages
 Ability for price
competition
 Brand
 Seamless
integration
 More user base
in EnterpriseAdvantage
Product
Market share of
Innovators

21. Thank you