The wearables market in the MENA region is quickly evolving. According to figures shared by the International Data Corporation (IDC), a global provider of market intelligence, advisory services, and events for the ICT markets, shipments of wearables were up by 30 percent year on year (YoY) in the MEA region.
Healthtech is grabbing a big fraction of the wearables market. According to Arab Health, one of the largest gatherings of healthcare and trade professionals in the MENA, 45 percent of GCC residents find wearable tech, such as fitness trackers or smart watches, an effective way to monitor their personal health.
People in the Middle East are becoming increasingly health-conscious and actively taking steps towards improving their health because of the prevalence of lifestyle diseases affecting a large portion of the population, said Hamish Clark, partner in the health industries in the Middle East at PwC. According to the company’s statistics, half of the number of people dying from diabetes in the Middle East are below 60 years old, with Diabetes Type 2 being increasingly seen in younger adults.
“Today’s consumers are not only more educated but also interested in personalized and accessible data whereby they can track their fitness, nutrition and even sleep patterns in order to make important decisions regarding their health,” he said. As reported in PwC’s 2016 survey Care Anywhere, the explosion of technology and the increasing ubiquity of the Internet of Things (IoT) is bringing breakthroughs that are erasing healthcare boundaries and enabling care anywhere and everywhere. Another critical factor increasing the usage of wearables is smartphone connectivity, as 78 percent of people with a wearable that connects to their smartphone reported using it more frequently solely because of that connectivity.
Lack of homegrown hardware
Two regional stars were among the few that shined in this domain. The Lebanese entrepreneur Ziad Sankari, in collaboration with Microsoft Azure technologies, developed a wearable device, CardioDiagnostics, which uses mobile telemetry, allowing cardiologists to monitor patients remotely and for extended period of times, thus detecting any problems at an early stage and helping save lives. Lebanese entrepreneur Hind Hobeika has also brought Instabeat, a patented swimming monitor that can be attached to a swimmer’s goggles and monitors heart rate, tracks laps, turns and timing.
Despite the growing demand, the market seems to remain dominated by international labels, such as Samsung, Apple, and Fitbit, which retain, 13, 12, and 11 percent market share respectively, according to IDC’s figures. Homegrown hardware and wearable tech startups are not as numerous as other software and service-related startups.
Erkki Aaltonen, executive director at startAD, an innovation and entrepreneurship platform that supports startups in the UAE at every stage of their development, explained to Wamda that entry barriers are holding back the growth of homegrown wearables startups.
Though multiplying, the region still needs additional makerspaces and fablabs to foster hardware startups development. “This is why startAD is providing free access to our prototyping lab, Al Warsha. Anyone in the UAE can build their prototypes and learn about 3D printing, programming, and acquire all the basic technical skills required to build wearable startups.”
Capital requirement is another burden. “Early stage teams can’t build their product without seed funding as you always need at least some level of funding to build something physical. In comparison, for software, all you need to know is how to write a bit of code,” he added. Additionally, hardware startups are often more expensive initially to build compared to software startups. People often think that it is easy to copy a physical product, but the reality could not be more wrong, as indicated Aaltonen. “It always takes lots of time to build something, and it is most often not just a piece of hardware, but has an integral software component as well. All this requires a special skill set that is not easy or fast to copy,” he said.
Growing regional hardware hubs
Anchored at New York University Abu Dhabi (NYUAD), startAD invited innovative startups to apply for UAE’s first hardware Venture Launchpad, an immersive 10-day entrepreneurship program at NYUAD that will help startups develop a scalable, repeatable, and capital efficient venture. The program took place from December 4 to 13, 2017. The program was open to any early-stage hardware startup.
Over 20 teams from emerging hardware companies participated in the program and showcased their concepts to investors. Three teams walked away with a prototyping grant that will enable them to further develop their products. Among the winners, team Stealthy was rewarded for its medtech wearable hardware concept; a jewellery collection designed for women pre and post pregnancy aimed at enhancing their wellbeing. The sensor integrated cognitive jewellery ensures vitamin D and folic acid levels are monitored, safeguarding women against deficiency. The Stealthy app integrates all these features along with encouraging the practice of communal wellness activities. The team responsible for this innovative concept included CEO Nadiya-Keya Siddique and chief medical officer Dr. Zakiya-Luna Siddique.
Siddique told Wamda that wearables have not traditionally been fashion led. The early popular market entrants such as the Apple Watch, Fitbit and Garmin products were traditionally designed for a male aesthetic using materials more suited for sports. “As more women have adapted to wearables coupled with an increased consciousness on health and wellbeing, there is an increasing trend shift and desire for design led pieces. Stealthy serves both the practical and aesthetic needs of these health and fashion conscious women. It is no longer fashionable to be unhealthy – customers are empowered with the knowledge of the health problems associated with Vitamin D and Stealthy empowers women to take back control digesting Vitamin D in its most natural form – sunshine,” she explained. When it comes to challenges, Siddique said that they reside in the main pain points and some stigma associated with a hardware startup. “Hardware startups are capital intensive at the early stages, however, we believe Stealthy is not solely a one-time hardware product. Stealthy is creating a community of women committed to achieving better health and wellbeing goals. Our primary focus is addressing the silent epidemic of Vitamin D deficiency in fertile women pre, during and after pregnancy but also addressing other health issues because of Vitamin D deficiency,” she said.
According to Aaltonen, wearables are one of the most interesting and versatile areas in startups today. “Your smartphones can only measure certain things to a certain limit, and because of that, we need multiple products with various different sensors. FitBits and similar products are just the beginning. There are endless opportunities to integrate new sensors. For instance, in textiles you can have sensors on dehydration, vitamin deficiency, heart rate, blood pressure, body temperature, etcetera. Basically, all of your vital sign can be monitored. This can also open up markets for self-diagnostics, and help doctors to evaluate patients remotely, thus reducing costs and improving results at the same time,” he explained to Wamda.
In March, the doors of Brinc-Batelco IoT Hub will open in central Manama. Besides the hardware acceleration program it will bring, the project will boast a high-tech coworking with a makerspace, kitted out with a 3D printer, a laser cutter, and tools for electronic prototyping. It will be the first hardware lab of its kind in the Kingdom of Bahrain, as said Bryony Cooper, a startup consultant and program manager at Brinc. Due to their Headquarters in Hong Kong and program in the Greater Bay area, the global reach of Brinc’s connected hardware accelerator creates a bridge to China for manufacturing of IoT products at scale.
Cooper told Wamda that the next big opportunity in the Middle East in wearables/IoT is in personal well being and health. “The opportunities are in the health sector, Brinc is leveraging our experience having worked with many IoT founders such as with health tech startups such as Pill Drill to revolutionize niches in the medical industry. We believe these niches are the future,” she said.
Aaltonen believes that similar spaces and programs will boost hardware startups’ activities in the region. “Hardware is one of our focus areas, and our Al Warsha offering especially is aimed at boosting the hardware startup actives. All startups needs support from incubators and accelerators, and makerspaces, and hardware startups are no exception. As part of our Hardware Venture Launchpad program, we have also been giving prototyping grants to further help the teams. We have partners in Shenzhen, with whom we connect startups that needs to scale their production. We also have our own seed fund, startAD Seed, where we invest up to $250,000 per startup in high potential ventures.”
Who would invest?
Many believe that wearables are less appealing to investors, because they are hardwares, which are less produced in the region. However, startAD’s Aaltonen had different perspectives. “There is nothing mystical about wearable startups. Investors assess those as any other startups. They also need to have their product market fit, and a great team to execute the plan. The main difference when compared to non-hardware startups comes from the upfront capital requirements to build something, which puts even greater emphasis on the team and how they evaluate the market need,” he said, adding that it is mandatory that the team does extensive customer interviews and have a deep understanding of the market needs before starting building their physical product. “With software startups, its relatively fast and cheap to make new software versions of your product, but with hardware, each iteration round actually takes time and costs money,” he said. He also added that often, startups can build the first version of the product cost-efficiently and wearables are also often good candidates to raise money from crowdfunding campaigns, which are essentially proof of market traction.
AI and robotics to drive growth
The emergence of robotics and AI would also be another driver for investors. According to PwC, wearables are a small component of artificial intelligence in healthcare which is witnessing increasing interest and uptake globally. The What Doctor 2016 PwC survey reported that 55 percent of 11,000 participants in Europe, the Middle East and Africa (EMEA) are willing to engage with AI and robotics for their healthcare needs. “If people are showing that level of willingness to engage with something as advanced as AI, it is easy to understand why wearables have become so popular,” said Clark.
“The world is changing very rapidly, and UAE can and will be in the front row of that development. Robotics and related AI will change every minute aspect such as how we commute, do our daily tasks, and it will have fundamental impact on certain industries. All this will attract more investors to look into investing in hardware as well,” Aaltonen concluded.
The potential for wearables is vast and there is a plethora of research that is being published on the various uses of wearables both within the health sector as well as other sectors. A PwC survey revealed that safe-driver insurance discounts based on wearable tech, thermoelectric pulses to heat, cool, and soothe the body using a bracelet that senses temperature, pain, and stress, and tracking a child’s health, safety, or location via wearables will be helpful in the future. The elderly segment is another segment where wearables would present turnkey solutions.
According to Clark, the corporate scene in the GCC is another area that wearables are likely to be seen making an entry into, whether for health or efficiency and effectiveness purposes. In the former, employers are launching corporate wellness programs and investing by providing their staff with fitness trackers to incentivize them to adopt healthier lifestyles by offering monetary benefits with the aim of improving productivity and morale. In the latter, companies are introducing wearable devices that help employers in their daily tasks.