Let’s admit it, the smartwatch market has failed to live up to expectations. But, that is not necessarily a bad thing. You need to learn to walk before you can run.
I have been a sceptic about the viability of the “one size fits all” smartwatches from brands like Apple, Samsung, the struggling Fitbit, and the now defunct Pebble. And I’m not alone. Intel, an early backer of smartwatches and fitness trackers, recently killed off its wearables division.
Don’t get me wrong – I still believe smartwatches will be successful, but only after the manufacturers realise smartwatches need to target specific user groups or user profiles instead of trying to be all things to all people.
Some device manufacturers adopt this approach and develop smartwatches targeted at recreational athletes, children, and, most interesting to me, the elderly. The technology is now at a stage where it can assist governments, healthcare organisations, insurance companies and families in elderly care management. We all realise there is a need for such a service, the challenge has been determining who will pay it, who will support it, and how we can get it into the hands of people that need it.
In this, the second instalment of IoT Watch List, I will discuss a new service launch from Omate, a start-up device manufacturer, and its partners, SafeMotion and Crédit Mutuel Arkéa, to provide a Wearables-as-a-Service model to support the Elderly Care Management industry in France.
Omate is a device manufacturer that makes everything from smartwatches to connected robots to connected toothbrushes. Omate has partnered with the creators of the SafeMotion Assistance System to provide a service for individuals that require increased security, monitoring and support. While this service can support a variety of user profiles, including children, lone workers, and others who may be vulnerable, for this blog I will look at its applicability to elderly care management.
This initiative is supported by several Omate smartwatches, including the O4VC (Omate 4G Video Call smartwatch), O3VC and O3. Combining the watch with the SafeMotion Assistance System platform creates a robust elderly care management solution that includes:
- Embedded SIM to give the user the capability to make calls to carers or contacts
- Alert functionality that allows the user to trigger an alert to their alert chain
- User location tracking through the online platform
- Capability to set up “safe movement zone” alerts, notifying members in the “alert chain” if a user moves outside a designated area
- Notifications to remind the user to take medication, to drink water, or remind them of personal and/or medical appointments
This isn’t the only service with similar functionality. However, what sets this apart is they have launched a Wearable-as-a-Service (WaaS) model through Arkéa, a French banking and insurance company, that allows end users or institutions “rent” the device and service – “as a service”. This eliminates the need for the up-front purchase of the smartwatch device, which can be an additional hurdle in the sales process.
1. Asia’s Ageing Population Crisis
The increase in life expectancy combined with lower fertility rates, increased migration levels and a change in family structures and values means that older people increasingly are left to fend for themselves. And this will only get worse.
According to the United Nations, Asia-Pacific is already home to 60% of the world’s population of older people, defined as people 60 years or older. In 2016, that equated to 547 million people, with that number rising to 1.3 billion people by 2050, with 260 million of those being 80 years of age or older.
But the crisis isn’t that we are living longer, it’s that we have fewer people to support those aging people. By 2050, Hong Kong and South Korea will have over 60 retirees for every 100 adult workers, and that numbers rises to over 70 for Japan. This will lead to increased pressure on the finances of both families and governments.
So what’s the economic impact of this trend? In a recent report from Marsh & McLennan, the cumulative costs of managing the elderly in Asia between now and 2030 will be in the region of USD 20 trillion. And no, that isn’t a typo. It is trillion.
2. We agree there is an elderly care problem, what’s the solution?
When it comes to elderly care, we know we face a crisis, but technology can help us address that crisis. There will be challenges, including data privacy, regulatory requirements, and user acceptance, but we need to start testing solutions sooner rather than later. And recent technological advancements around mobile networks, devices (smartwatches), and platforms mean now is the perfect time to start.
Note: If you are reading this blog and you live until 2050, you will be one of the “older people” who will be impacted.
3. A new approach to smartwatches is required
Most mass market smartwatches try to do all things for all people – and that model is not meeting expectations. The market needs to stop connecting things just because we can. We need to provide solutions, not gadgets.
The smartwatch market will take off when manufacturers create smartwatches that deliver value by solving a problem a specific market segment faces. This joint offering from Omate/SafeMotion/Arkéa is a step in that direction.
This partnership and service models are new for both the smartwatch and elderly care industries, but the market opportunity does not stop there. Here’s why I think this initiative can be a game changer:
1. Innovative Partnership Model
There is nothing new about a partnership between a device manufacturer (Omate) and platform provider (SafeMotion). However, adding Arkéa to the mix is new.
Why is this interesting? First, Arkéa has over 3.2 million customers in France, which equates to approximately 5% of the population, meaning they have strong ties to the demand side of the market equation. Second, they are an insurance company so they should be able to upsell this solution into their existing customer base. Finally, they can leverage their banking capabilities to finance the WaaS model. It would be hard to find a better positioned partner for the French market.
The challenge Omate now faces is how to identify similar partnerships that can help them move into other markets, including the US and Asia.
2. Wearables as a Service (WaaS)
The solution provides a platform for organisations or individuals to trial an innovative elderly care management solution in a cost-effective way. Most organisations face Capex challenges, meaning the Omate/SafeMotion/Arkéa Opex pricing model should be an attractive option to test the device and platform, as well as assess user acceptance.
The average price for the service is EUR 30.00 (USD 35.40) per month and includes the rental of the device and network data. Also, in France, 50% of the monthly cost is tax deductible, meaning the effective cost is EUR 15.00 (USD 17.70) per month.
To put this in perspective, Marsh & McLennan forecasts healthcare expenditure for EACH senior in Singapore will rise from USD 8,196 to USD 37,427 by 2030, nearly a fivefold increase. Suddenly, a USD 35.40 per month seems like a bargain and a great way for governments like Singapore to better manage elderly care management costs and improve the lives of its citizens.
On the wider scale, I believe the WaaS model also can help kickstart wearables in the enterprise, particularly around those use cases with the significant pent up demand (e.g. safety/security). Now it is up to the wearables manufacturers to find the right partnerships to deliver it.
3. Elderly Care Management is just the beginning
Advancements in technology led us to the Omate/SafeMotion/Arkéa solution partnership and we can begin to transform people’s lives. But this is just the beginning wearables in healthcare. In the near term, this model will move beyond elderly care and expand into the remote monitoring of outpatients and individuals with chronic medical conditions. As for the longer term, I will leave those forecasts to the medical and technological experts.
I find this offering interesting because of the technology, the partnership and the financial model. But, being honest, there’s more to it than that – this is personal. I hope I am lucky enough to be alive in 2050. And if I am, I hope we have many more solutions like this to help me manage and extend my life.