Start-ups – AI pollution

• The best part of every trade show be it CES, MWC or similar is the opportunity to descend into the bowels of the show and filter through thousands of start-ups which have a huge range in terms of quality.
• The problem this year is that 70% of the start-ups have put AI somewhere in their name or their one-sentence description meaning that the obviously mediocre offerings have become much more difficult to identify.
• To fix this problem, I ignored every company that used the AI term and focused on those that did not and here I found the quality to be far better.
• I suspect that this is because to get noticed without the AI moniker one has to have something that stands on its own merit.
• One theme that I found particularly interesting is gestures as an input method which Apple has brought back into the limelight with the release of the Apple Vision Pro.
• Two companies in particular stood out.
  • First, Doublepoint: which is based in Finland and uses the sensors available on Android Wear devices to enable pinch to click as well as flick to scroll.
  • One can also use hand movements to act as a mouse on an iPad with a pinch as the mouse click.
  • The secret sauce here is error detection as Doublepoint can tell when fingers are pinched deliberately as opposed to when they are not.
  • Apple got around this problem by requiring a double pinch which almost never happens by accident.
  • Android Wear is a bit limiting in terms of what it allows the company to do but with its prototype device on one’s wrist, one can point at lights and turn them on and off by pinching which is a pointless, but very cool gimmick.
  • It is worth remembering that pointless gimmicks often cause devices to sell in their millions.
  • Second, Neuranics which is a company that uses magnetic fluctuations in the body to read body signs and it claims this can also be used to decode gestures.
  • The company is currently demonstrating a prototype device that can work anywhere on the left side of the chest which can very accurately (presumably to medical grade) provide a full ECG.
  • The company says that this is good enough to get FDA clearance, but I see this more as a proof of concept of what the company can do as medical devices is not its goal.
  • A device on the wrist will be able to measure heart rate and HRV which offers an alternative to light which can struggle to work well on people with darker skin.
  • Most interestingly the company thinks that this could also be used for gesture-based input which could be both very accurate and detailed.
• This is a long-term theme as Apple has demonstrated that when it is implemented well, it is a perfectly good system for input although typing is an issue.
• Using these solutions rather than very expensive sensors offers a way to get pricing down in terms of sensors, power consumption and weight.
• It is an emerging theme which has a new lease on life and one worth keeping an eye on.

ORAN – ORAN? What ORAN?

• Missing in action at this year’s show is OpenRAN (ORAN) which was all the rage last year but has been completely sidelined by AI in 2024.
• ORAN is the idea of having all of the interfaces between different pieces of network equipment open and available meaning that operators can pick and choose different vendors for each piece.
• I was expecting this to be a big deal this year as for years ORAN has suffered from poor performance but with a recent update, this problem was largely solved.
• Hence operators should be going gangbusters on mixing and matching equipment and getting excellent prices, but at the show this year, ORAN is hardly anywhere.
• No one is talking about it, there are no banners anywhere leaving it to the existing ORAN supporters to wave the flag.
• It seems to me that AT&T’s deal with Ericsson should have pushed this to the top of the agenda but the nature of this deal has done precisely the opposite.
• This is because instead of picking and choosing components from different vendors, AT&T has taken the whole lot from Ericsson making this look just like any other deal for network infrastructure.
• In my opinion, this really undermines the whole proposition of ORAN as it makes it look just like any other network deal that uses closed interfaces.
• The only real winners here are 3^rd parties who offer network software as they will still be able to plug into the network even if the whole lot has come from one vendor.
• AT&T could theoretically use 3^rd parties for capacity upgrades but there is no indication that it will do this, and I suspect that Ericsson will do everything it can to ensure that it keeps the business.
• This means that ORAN could still take a piece of the market, but it does not look like the equipment vendors that specialise in the mix-and-match idea will get much of a look in.
• Hence, it looks like tough times will continue for them despite the large boost in confidence that ORAN has just received.

• Apple has received an unwelcome Christmas present as it faces a ban on importing Apple Watch products in The USA as a result of infringing Masimo’s blood oxygen patents but I am pretty sure that it already has a workaround ready to go.
• The ITC has issued a “limited exclusion order” against the Apple Watch Series 9 and the Ultra 2 following a January finding that these products infringe patents owned by medical device maker Masimo.
• Apple can always settle with Masimo but its historically pugilistic attitude towards patent infringement usually means that it won’t settle unless it has no other choice.
• This is precisely what happened in 2019 when Apple settled with Qualcomm and resumed paying royalties on the iPhone as it could not source the 5G chips it needed from anywhere else.
• I suspect that this situation will hinge on whether or not the ban actually goes into force and whether or not Apple has a decent workaround ready to go.
  • First, the ban is supposed to go into force on December 25^th but Apple has pre-emptively ceased online shipments and will halt sales from its stores on December 24^th.
  • This pretty much ensures that the all-important Christmas sales season will have gone as planned but now it has to worry about calendar Q1 2024.
  • The ban currently sits on the desk of the US President who has the power to veto it, but an intervention at this level is unusual but not unheard of.
  • Assuming there is no veto, Apple will need to disable the feature in order to be able to resume shipments or issue a workaround.
  • Second, The workaround. Given that the prospect of an ITC ban has been very real for 11 months, I am pretty sure that Apple has a workaround ready to go.
  • In the first instance, this will involve a software update that will change the methodology of blood oxygen monitoring such that Masimo’s patents are no longer infringed.
  • However, Masimo claims that to workaround its patents will require a hardware change which complicates the situation significantly as existing devices cannot be rectified.
  • I think that the worst-case scenario is an update that temporarily disables the feature in USA devices.
  • It is unclear whether the infringement includes hardware, but I am pretty sure that Apple will have a go with software before it makes a hardware change.
• Apple is pursuing a range of “legal and technical options” which means that in addition to the workaround, it will also be seeking to have the ban stayed pending its appeal of the infringement ruling.
• These are not unusual as an import ban can be very damaging to a company even if it wins on appeal.
• Hence, I suspect that if Apple fails to win a stay, and the software update does not work, it will probably settle with Masimo and pay it a per-unit royalty.
• Consequently, while the Series 9 and Ultra 2 may not be available during the holiday period when business kicks off again in January, Apple is likely to have found a solution to this problem.
• The share price is barely registering the impact of a ban of the Apple Watch into The USA reflecting my view that Apple will find a solution before there is a meaningful halt in device shipments.
• That being said at 29.9x 2024 PER, the stock is already pricing in a rosy recovery following the downturn triggered by high interest rates and inflation.
• There are plenty of other places to look in the technology sector especially if one places importance on AI as a differentiator in the future.

• It looks as if Apple is delaying its plans to include blood pressure monitoring in the Apple Watch for two or three years, once again indicating how difficult this is to get right and how important it could be once it is finally ready for the market.
• When it comes to wellness, blood pressure and blood glucose are the Holy Grail of wearables as these conditions affect over 2bn people worldwide and are badly monitored at best.
• Measurement is still conducted either with a cuff that crushes the arm or a needle in the skin and is both invasive and does not always give a clear picture of what is happening inside the user’s body.
• This means that anyone who can measure these reasonably accurately and un-invasively stands to make a lot of money as well as upend an entire industry.
• It also offers the possibility of moving from single points of data to continuous monitoring which could greatly improve insight although a lot of very careful data management and analysis will be required to make it work well.
• It is not for want of trying and I am aware of several companies who all violently disagree with each other, but who are all trying to measure one or both of these biometrics using some form of light.
• Some are using lasers, others are using LEDs. Some make their own sensors while others use off the shelf sensors and rely on their software to interpret the signal.
• However, all of them are trying to measure blood pressure and/or blood glucose through the absorption of a green light that is integrated into a wearable of some kind.
• The one exception is Leman Micro Devices which relies on squeezing the finger into a groove and then measuring when the capillary collapses to estimate blood pressure.
• This sounds easy but there is clearly much more to it as I have been aware of this approach for many years, but it is only very slowly inching towards being ready for market.
• Apple was hoping to include blood pressure in the 8^th version of the Apple Watch (see here) which should be launched this year but it looks as if Apple has been struggling with accuracy and that the feature will be delayed for some time.
• Blood pressure is the least controversial of the two biometrics and there is one company that has FDA approval for a device called BioBeat that it intends to sell for inpatients that are not constantly monitored and are outside of the ICU.
• The goal is to be able to replicate a cuff reading to within 8mm of mercury but this is very difficult to verify.
• This is because whenever one moves one’s arm, the pressure of the blood in the arm changes and it also changes depending on activity, diet and time of day.
• This complicates the issue so much that a proper measure of blood pressure is measured medically by a reading in the morning and a reading in the afternoon taken in a specific way and averaged over four days.
• The other problem that one faces is what I refer to as the “too much data problem” which is that constant monitoring could spike anxiety as normal changes during the day are misinterpreted by the user.
• Apple’s delay gives the other offerings time to get their products into the market and if they are able to succeed where Apple has failed, then they are likely to become the subject of a bidding war.
• Blood glucose takes this one step further where a constant measurement within a 15% margin of error is required but where most players think that this accuracy will never be achieved from a wrist-mounted device.
• Two that disagree are Rockley Photonics which has been working with Apple on research in this area and LifePlus which is about to come to market with a device that will measure both metrics.
• I continue to think that this is an area with a lot of promise and one where when / if someone cracks it, a lot of money will be made but it may still be a long wait.

• Much is being made for the potential for the Galaxy Watch 4 and the Apple Watch 7 to measure blood glucose but their inability to conquer the easier task of blood pressure highlights just how hard these goals are to reach.
• The realistic outlook is that these devices will provide very vague wellness and fitness indicators at best.
• Two of the biggest lifestyle-related conditions that cause ill-health and death today are hypertension (high blood pressure) and Diabetes (inability to control blood sugar levels).
• Furthermore, the monitoring of these conditions is invasive and uncomfortable in both cases making constant monitoring over a long period of time impractical.
• Constant monitoring results in by far the best outcome for the patient rather than monitoring at specific times of the day as a much more accurate picture of how the patient responds to his or her environment is revealed.
• Hence, a non-invasive system for measuring blood pressure and blood glucose to a medical standard is a holy grail that will reward both the inventor and the health of those that suffer from these conditions.
• Many claims have been made, but as of yet, none have made the grade.
• For example, the gold standard of blood pressure is a measurement that repeatedly gets within 8mm of mercury (Hg) when compared to the benchmark.
• The benchmark is a trained physician with a stethoscope listening for the characteristic sound when the vein collapses under the pressure from the cuff.
• Not even the digitised cuffs sold by Omron and others are as good as this but for all intents and purposes, they are good enough.
• No one is reliably close to this for a number of reasons:
  • First, Correlation: Most companies are trying to correlate fluctuations in green light absorption by capillaries with blood pressure and blood glucose levels.
  • This is easy to do for pulse where absorption is a direct consequence of the heartbeat but the other two are degrees of freedom away.
  • This makes correlation very difficult and it has yet to be achieved to a consistent and reproducible medical grade.
  • Second, Biological variation: Humans are different from one another and respond to stimuli differently.
  • This means that the absorption of green light and how that correlates to both blood pressure and blood glucose varies substantially from one person to the next.
  • This complicates the situation significantly although some progress has been made in using machine learning to correlate factors such as age, weight and sex to green light absorption and blood pressure.
  • This has been affected with some success by Valencell, but it is still very far from what could be considered as a solution to using cuffs.
  • Samsung’s offering requires calibration using an arm cuff every week or so as the accuracy of its measurement deteriorates quickly with time.
  • Furthermore, none of these measurements makes the grade when it comes to offering a useful alternative to the current invasive techniques.
  • Third, wrist: From the user’s perspective, the wrist is the most convenient place to affect this monitoring.
  • This is because it causes the least inconvenience, as well as users, are quite used to wearing devices in this location for long periods of time, if not constantly.
  • However, compared to the outer ear or the fingertip, this is a suboptimal place to monitor given the extra signal noise created by external hairs (men mostly), ligaments, tendons and other internal characteristics that are in constant motion.
  • Furthermore, arm movements also change the characteristics which make separating the signal from the noise even more challenging.
  • Hence, I suspect that the ear with a sensor integrated into inner ear headphones could be one of the first to produce a really good prototype.
  • Fourth, data mining: When one is looking for signal in a large amount of noise, data mining becomes a potential problem.
  • This issue refers to the outcome where one keeps on digging and eventually one ends up with a completely spurious relationship because one has been digging too long.
  • There is a lot of this going on by those seeking to find correlations in the data they are generating and consequently, I suspect that there will be a number of spurious relationships generated.
• The net result is that the medical device companies are not going to go out of business in the near future.
• However, they should make hay while the sun shines because sooner or later, these issues are going to be solved and then the business of charging vast amounts of money for medical equipment will come crashing to a halt.
• This sector has a bright future, but I still have no clear idea of when the sun is going to poke its head above the horizon.

• The inevitable (see here) acquisition of Fitbit by Google is creating a fuss around user wellness data but the reality is that Google, to all intents and purposes, already had it.
• The news is full of users abandoning their Fitbit devices and deleting their accounts as they do not want their wellness data to be analysed and tracked by Google.
• I suspect that these anecdotal stories are not representative of reality and that the vast majority of users do not care one way or the other.
• This is evidenced by the fact that if the news stories around Facebook represented reality, its financial performance would be in meltdown when in fact Q3 19 (see here) demonstrated precisely the opposite.
• However, these disgruntled users are probably not aware that their data has actually already been with Google for some considerable time.
• It was this fact that led me to believe that an acquisition by Google at some point was inevitable (see here).
• About 18 months ago Fitbit entered into an alliance with Google where it would use the Google Healthcare API to access the healthcare system and make the data accessible by doctors and hospitals.
• Fitbit also moved all of its operations onto Google Cloud which allowed it to scale more quickly as well as have access to Google’s best in class AI systems.
• This effectively marked the end of any ecosystem ambitions that Fitbit might have had and is exactly what it tried so hard to avoid when it declined to use Apple’s HealthKit API.
• RFM research has long shown that when different pieces of independent but related data are put together, far better insights can be gleaned, making data in aggregate far more valuable than the sum of the individual pieces.
• This is the value that Fitbit conceded to Google and why I held the view at the time that this marked the end of any real value that Fitbit may have been able to create for its shareholders.
• The net result was that Fitbit went from being a potential aggregator of wellness information to merely a provider of data that is aggregated and understood by Google.
• This was a win for Google in its efforts to compete with the Apple ecosystem which eventually led to Fitbit’s acquisition because it was too small to survive on its own.
• It is clear that Fitbit will now adopt Android Wear right across its range, but I suspect that the very low-end trackers may well stay on their current RTOS and move to Fuchsia when it launches.
• I suspect that this also means that Google will launch with a Fitbit branded device, in an attempt to take on the dominant Apple Watch.
• To get the optimum performance, the user will need to be fully committed to the Google ecosystem of hardware products (like Apple Watch) and the issue here is that very few users are.
• Even then, I suspect users will be asked to pay Apple and Samsung prices which will also serve to dissuade users.
• The net result is that Apple will be losing no sleep at all over this move and may even see a few new users as a result.
• Given Alphabet management’s apparent disdain for hardware, I suspect the long-suffering Dr. Porat will be signing away another $2.1bn with gritted teeth.

• Doctor Porat has been able to do very little to treat Google’s chronic case of engineering disease (see here), the bill for which is about to rise to $16bn (hardware acquisitions minus divestments) and where the outlook remains very difficult.
• Fitbit has done what I always thought it would to do (see here) and has sold out to Google for $2.1bn.
• However, adding Fitbit to Google’s hardware division is not about to cause Apple any problems at all as I don’t see what extra value being inside Google will bring to Fitbit users and vice versa.
• Google intends to acquire Fitbit for $7.35 per share ($2.1bn total) which is less than half the valuation at which it went public in 2015 but even that does not look very cheap.
• This is because, Fitbit is not faring well as it seems to be only able to grow revenues by making cheaper and cheaper devices which are not able to collect really meaningful data and often end up in a desk drawer after several months.
• To be fair to Fitbit, its devices remain on the wrist of the user up to 3 times longer than those of Huawei, Samsung or Xiaomi, but I do not believe that the user base that Google is buying is actually very valuable.
• This is for 2 reasons
  • First, size: In 2017 Fitbit had 25m users which if I am extremely generous might now be somewhere around 35m to 40m now.
  • This means that at the midpoint of that estimate (37.5m) Google is paying around $56 per user to acquire Fitbits user base and its data.
  • The value of this is somewhat undermined as Fitbit has already signed up to use the Google Health API meaning that Google may already have access to a lot of this data.
  • Furthermore, the user base is well adrift of what I would consider critical mass (circa 100m) meaning that without great execution on Google’s part, it could easily disintegrate.
  • Second, engagement and data: User engagement with wearables (outside of the Apple Watch) is a major issue.
  • Very often the user gets tired of the device after a few months and it disappears into a desk draw, never to see the light of day again.
  • Fitbit’s engagement is much better than most, but it is mainly for the trackers that simply track steps and very little more.
  • This means that the data collected by Fitbit is pretty thin, and in many cases, probably inconsistent.
  • If anyone can use AI to make sense of it, its Google but I struggle to believe that, even with Google super insights, this data is worth $56 per user.
• It is clear that Fitbit will now adopt Android Wear right across its range, but I suspect that the very low-end trackers may well stay on their current RTOS and move to Fuchsia when it launches.
• I suspect that this also means that Google will launch with a Fitbit branded device, in an attempt to take on the dominant Apple Watch.
• To get the optimum performance, the user will need to be fully committed to the Google ecosystem of hardware products (like Apple Watch) and the issue here is that very few users are.
• Even then, I suspect users will be asked to pay Apple and Samsung prices which will also serve to dissuade users.
• The net result is that Apple will be losing no sleep at all over this move.
• Given Alphabet management’s apparent disdain for hardware, I suspect Dr. Porat will sign away another $2.1bn with gritted teeth.

• Google has purchased the right to use and disseminate core IP from Fossil for $40m (stoking rumours of a Pixel Watch) but I can’t see anything that Fossil has that will allow Google to close the gap on Apple.
• Smartwatches are the most important sub-segment of the endlessly disappointing wearables segment where Apple clearly leads the pack.
• This is because Apple has done a good job of integrating a series of nice-to-have functions into a device that works extremely well and makes a good companion device for an iPhone.
• Apple Watch 4 is the first version that is triggering a round of upgrades from Apple Watch 1 as the ECG function and the larger screen are enough of an enhancement to entice Apple fans to once again dig for their wallets.
• Against this backdrop, the rest of the smartwatch industry has really struggled as Android Wear fails to deliver a compelling user experience, resulting in the device quickly ending up forgotten in a desk drawer.
• Fossil and Tag Heuer both have innovative offerings:
  • Fossil offers hybrid watches that look like regular watches and have some smart functionality.
  • Tag Heuer seels smartwatches where the guts of the smartwatch can be replaced with a new one or a regular mechanism.
• Fossil has been quick to stress that the IP that Google has paid $40m for is not in the market but currently under development.
• This means that Google is not about to start making a Pixel Hybrid smartwatch but will be aiming to delight prospective buyers with something else.
• Sadly, I do not think that Fossil has the kind of technology that could make a Pixel Watch a must-have.
• This is because what I am looking for to set this segment on fire is medical grade health monitoring.
• The two biggest targets for this are blood pressure and blood glucose which represent two of the biggest health problems in the developed world today.
• Furthermore, both require constant monitoring which is invasive and unpleasant today and can be fairly easily treated with lifestyle changes
• Hence, I have long believed that non-invasive monitoring of these two characteristics could trigger a wide-ranging take-up of wearable devices.
• This could create a user base already engaged with a product into which more innovation could be delivered.
• This is exactly what happened with the iPhone where everyone bought it because of its cool user interface creating a big enough user pool for developers to be incentivised to experiment and innovate.
• I don’t think that Fossil has created a technology anything like this and so I suspect that Google will come out with some cool gimmick, the novelty of which will wear off after a short period.
• Hence, this is not going to kick-start a mass adoption cycle and so 2019 looks set to be another disappointing year of Apple Watch doing reasonably and not much more.
• Hence, I would continue to steer clear of this segment until there is a real reason to get involved which will be before H2 2019 at the earliest.

Healthcare is its one and long shot.

• Fitbit now wants to be known as a health care company but in order to do that, it will have to offer devices that have highly accurate sensors as well a thriving ecosystem of third parties involved in health care.
• Fitbit has followed up the somewhat clunky and unattractive Fitbit Ionic with a much better looking and more svelte device called the Fitbit Versa.
• This takes the functionality of the Ionic together with its proprietary Fitbit OS (which is open to third party developers) and crammed it into a much better-looking product.
• In effect this is an Apple Watch for those that either do not own an iPhone (83% of global users) or do not want to be locked into Apple’s iOS ecosystem.
• The use of a proprietary OS has allowed Fitbit to really increase battery life which is by far the stand-out feature of the Versa.
• The larger Ionic could go for 5 days or more on average usage which I suspect to be about the same in the Versa. (Smaller battery offset by lack of GPS which is one of the biggest drains on the battery).
• The Versa is cheaper than the Apple Watch but the lack of a LTE modem (pointless in my opinion (see here)) and GPS means that it cannot offer such a wide range of functionality.
• The real problem when comparing the Versa against the Apple Watch is the relative degree of support from third parties.
• With 8m Apple Watch units sold in Q4 17, every iOS developer that has an applicable app is likely to extend its functionality to that device but the same cannot be said for Fitbit.
• Fitbit OS has launched with apps from Starbucks and Strava and I suspect that Fitbit had to pay those companies to support its OS.
• This is the classic chicken and egg problem that all new platforms have to contend with and my confidence that Fitbit will able to crack this nut in recreational fitness it not high.
• This is why the healthcare angle is so important.
• If Fitbit can build an ecosystem of healthcare providers and services around the Fitbit OS, then this platform might have a chance to carve out a niche for itself.
• However, this will require Fitbit to improve the quality of its sensors to provide medical grade data, potentially seek FDA approval and appeal to consumers’ wallets.
• This will involve using a Fitbit device as a tracker and allowing a healthcare provider to track one’s activity in exchange for a lower insurance premium.
• This is a use case that I think could really take-off and help reverse the devastating impact that lifestyle related diseases have the cost of providing health care.
• However, Apple has also cottoned onto this and I suspect that its installed base alone is likely to give it an overwhelming advantage.
• However, Apple has yet to come up with sensors that can provide reliable, medical grade data.
• This is why I suspect the accuracy of both sensors and the algorithms that interpret the data they generate will be the deciding factor on whether this pivot works out for Fitbit.
• It has a chance. but the odds are against it given the size and scale of its competition.
• This makes the shares extremely risky and best avoided in my opinion.

Another plan that failed.

• With the reorganisation of its hardware division, Snap Inc. is admitting that it made a wrong turn with its spectacles which despite being cool, no one bought.
• Steve Horowitz will now become president of technology and report to the chief strategy officer rather than the CEO in what can only be a significant demotion.
• A large part of the marketing effort has also been terminated with the COO of hardware, Mark Randall presiding over the vestigial remains.
• Despite being viewed as pretty much the coolest wearable device available, Snap Spectacles only managed to rack up around $5m in revenues during Q2 17.
• This clearly indicates that hardware was running at a substantial loss and with no turnaround in sight inevitably resulted in the cuts we have just witnessed.
• All references to becoming a camera company have now been quietly deleted leaving the company at a dead end when it comes to hardware.
• As Google and Facebook are finding, doing hardware when one is a software company is much more difficult than it sounds and I would not be surprised to see Snap quietly drop this idea completely.
• This leaves Snap with little differentiation over Facebook which remains its biggest problem.
• Instagram has a habit of copying all of Snap’s best innovations and pushing them out to its much larger user base pretty quickly.
• This makes it extremely hard for Snap to compete as apps that offer communication are all about the network of users.
• Metcalf’s Law of Networking states that the utility or value of a network increases by the square of the number of devices attached to it.
• This would imply that Instagram should be at least 16x more valuable than Snap meaning that at Snap’s valuation, Instagram makes up more than half of the valuation of Facebook.
• Instagram is an important part of Facebook but I don’t think it is contributing more than 50% of Facebook’s value.
• Hence, I would be inclined to believe that Snap remains meaningfully over-valued.
• I think that fair value for Snap remains around $12.40 per share which is still 10% below where the shares are today.
• I still think that negative sentiment could push the shares closer to $10 at which point acquirors could start to take interest.
• Until then I still see no reason to get involved and would strongly prefer Twitter to Snap Inc. (see here)

Adding LTE to Apple Watch is pointless.

• The problem with wearables that I described nearly 4 years ago (see here) of a solution looking for a problem continues to plague wearables with Fitbit struggling along, sector consolidation and even Apple seems out of ideas.
• If the rumour machine citing endless anonymous sources is to believed Apple’s next version of the Apple Watch will feature a LTE modem.
• This will give the device independence from the iPhone, meaning that the user won’t have to have the iPhone in immediate proximity for the device to work.
• I think that putting a LTE modem is pointless and could even harm what little appeal the product has.
• This is for two reasons:
  • First: In the US (I suspect Europe is similar) users are now glued to their smartphones for an average of 300 minutes per day (Flurry).
  • This essentially means that users keep their smartphones in their immediate vicinity at all times and will go to great inconvenience to ensure that that remains the case.
  • As a result, there is only a tiny period (if any) of time when the smartphone is out of Bluetooth range of the user and hence any wearable that he has on him.
  • Therefore, the inclusion of a cellular modem will be able to improve the functionality of the Apple Watch for only a tiny percentage of the user’s day.
  • This renders it effectively useless in my opinion.
  • Second: A LTE modem (even with a soft SIM) is going to cost money, take up space that could be something used for something else and will be a net drain on the battery.
  • Battery life is a major issue for all wearables (including the Apple Watch) and the addition of a modem will place a further drain on already very limited resources.
  • Hence, I think that a modem will cause deterioration of the user experience for no perceptible improvement.
• What Apple should really be working on is a use case or function for this product that makes it a must have causing everyone to rush out and buy it.
• This is the genius for which Apple has been known in the past but of which there has not been much sign over the last few years and certainly not with this product.
• Consequently, I hope that like the large screen TV and the vehicle, this product never sees the light of day.
• Instead, I am looking for a use case that can really kick start the wearable market as without this spark of genius, it is likely to continue bumbling along with little real interest or volume.