Sounds like a novel you read as a young teen, but it represents the evolution of mobile devices that we can use to make our daily lives easier.  Of course this comes with a dependency that has become ‘the silent epidemic’, but that is for another day, while right now we seem to be on the verge of a potential transition to the next level of mobile ‘convenience’ devices, the smart ring.  While smart rings are currently available from a number of brands, most of which are not recognizable names and are privately funded, but the big boys are just around the corner, sort of.
Apple (AAPL) filed its first ‘ring’ patent back in 2015, followed by Samsung Electronics (005930.KS) just two month later, with both adding follow-up filings over the years, but both were beaten by Amazon (AMZN) who released the “Echo Loop” in September 2019, only to kill the product before year-end 2020.  Apple’s ring development is said to be linked to its potential XR device while Samsung’s development path is more toward being a ‘control’ center for a variety of devices, but the ‘rings’ that are currently available are more like smart watches in that they typically measure and track a number of body functions, and potentially offer advice as to how to ‘live your best life’, meaning staying healthy, while others are far more specific to the needs of specific user types.
For instance, the Oura (pvt) Gen 3, a $349 device made from titanium and weighing between 4g to 6g, comes with 6 month of free ‘membership’ ($5.99/month thereafter) and includes an optical heart rate sensor, a blood oxygen sensor, a skin temperature sensor, and a PPG sensor that measures HRV (Heart rate variability aka Photoplethysmography), a substitute for ECG that has recently been incorporated in a number of commercially available devices, along with an accelerometer.  The devices lasts between 4 and 7 days before recharging and the membership software, aside from the data itself, gives you an in-depth sleep analysis every morning, personalized health insights and recommendations, live heart rate monitoring, and skin temperature readings to let you know if you are sick or heading into a menstrual cycle.

While the Oura is at the top of ring pricing, there are a number of other less expensive ring devices that offer more specific functions, such as the $100 McLear (pvt) ring that is designed to execute “RingPay” transactions, essentially a wallet that allows the user to make contactless purchases as if they were using a contactless card.  The company offers cash back rewards to users, which increase if you become a member, and allows multiple ‘rings’ and the ability to transfer between them, but no sensors for bodily function measurements.  One step further from the ‘measurement rings is the $58 ArcX (pvt) ring that serves as a Bluetooth joystick that allows you to control a smartphone, camera, and similar devices, while keeping the controlled device in a pocket or backpack.  You can use it to control music during a workout and even accept calls, all using one hand.

But Samsung and likely Apple seem to be taking the ring concept further and a 2021 South Korean filing by Samsung shows a far more sophisticated ring device that includes a display and is oriented toward being a control center for a variety of devices, and while it could have a variety of sensors, including photodiodes, LEDs, and a PPG sensor, the objective is to give the user easy access and control over their devices, without touching the device, through various touch and mechanical switches and dials built into the ring.  According to the patent documents the ring is able to pass on any sensor information to other devices when necessary or to evaluate sensor data and can be charged wirelessly.
The smartwatch market, the most similar to the rings described above was roughly $30b last year, so the development of any device that can feed into such a market is a given for major CE companies, and with the current crop of smart watches ranging from $60 (OnePlus (pvt)) to ~$800 (Apple Ultra), there seems to be enough interest in what is now a small and underserved market to attract some spending.  We expect much of the market evaluation at major CE companies is based on whether the smart ring market will eat into the smart watch market, but we believe the evaluation is much more complex and is oriented toward the impact it might have on the smartphone market, a cash cow for many CE companies. 
As brands face the constant battle to differentiate their smartphones, features become an important part of that differentiation, but as smartphones mature, it becomes more of a game to find something ‘new’, such as Samsung’s focus on foldable devices.  If smart rings can perform smart watch functions and allow you to keep your smartphone in your pocket for much of the day, it lessens the value of those two devices, not something major CE companies want to face.  That said, a good marketing department could latch on to a smart ring as an adjunct to a smartphone sale, as a $50 or $100 accessory.  Tablets were feared to have the potential to destroy the laptop market and yet they both exist, and foldable smartphones have been said to be the demise of tablets, but all still exist and find a niche where they provide the user with convenience, they key to CE popularity.  As we noted, a good marketing department can find a purpose for even the most worthless of CE products and based on what we have seen so far, there are certainly applications where smart rings make more sense than watches or even smartphones in some cases.

The benefits of ultrasound imaging are well-known, especially when you find out you will be the parents of a baby or multiple babies, but typical ultrasound procedures require a trained sonographer whose abilities can help or hinder the imaging of the body’s soft tissue, with relatively short time limits on how long the session can last and where it can be done, which is usually in a doctor’s office or hospital.  A group of researchers at MIT have come up with a way to make such ultrasound imaging as simple as applying a stick-on patch, which is able to transmit ultrasound images wirelessly for up to 48 hours.
Those who have blood sugar issues are quite familiar with adhesive monitoring patches made by Dexcom (DXCM) or Medtronic (MDT), which allow continuous monitoring of blood sugar levels for ~14 days, but the MIT engineers have taken the patch idea to another level as these patches, which are placed on the skin over a small dab of gel, can send continuous high resolution ultrasound images to a monitor, allowing monitoring o recording those images while the patient is performing a normal routine.  As the capabilities of the patches are improved they can be tailored to placement on various parts of the body, transmitting to a smartphone that is able to analyze the image and notify the patient or doctor when an anomaly occurs.
The patches are a vast improvement over the low resolution devices that have been tried in the past, with a flexible adhesive layer made of a hydrogel/elastomer sandwich and a more rigid transducer array being combined to allow the patch to conform to the skin’s surface while remaining at a precise location with the elastomer keeping the hydrogel hydrated, which is necessary for the sound waves to penetrate internal organs.  The entire patch is roughly the size of a postage stamp and is ~3mm thick.  During voluntary human tests the researchers were able to see the diameter of blood vessels change when moving from a sitting to a standing position, changes to the shape of the heart during exercise, and revealed patterns in muscles during weight lifting that could indicate temporary micro-damage, essentially telling the user when the workout was beginning to cause damage.
While the project continues to work toward full wireless functionality and better algorithms for image diagnosis, the idea of wearable ultrasound imaging has many uses for monitoring fetal development or the growth or shrinkage of tumors and with a relatively inexpensive device, can be used by patients and clinicians to monitor bodily functions in real time and then disposed of, without the need for hospital based imaging systems, with the ultimate goal of making such devices as accessible to doctors and consumers as continuous blood sugar monitors have become.  There is a short (2:08) video below.
https://youtu.be/Kn2J8W4csNc
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Samsung is big on foldables and has taken that to include rollables, meaning those devices where the screen can be coiled inside of the device.  Taking it to another level, Samsung has filed a patent for another rollable device; this time a watch.  With typical watch displays ranging from ~1.4” to 1.9”, Samsung seems to feel that the user might need more room to see what time it is and has developed (IP) the mechanism for a rollable watch display that can increase in size just by pulling the top part of the watch frame.  The increase in size was not specified but from the drawings it would seem to have double the area.
But Samsung did not stop with just a rollable display, but also includes S-Pen capabilities and the ability to turn the display from vertical orientation to horizontal without removing it from your wrist and being a ‘smart’ device, the watch itself can adjust it size according to the user’s content.  So if you want to see the time, the display would stay normal size, but when reviewing an e-mail or text, the display would elongate to show more of the message or allow for larger type.  When extended, the user will be able to use the under-display camera, allowing the watch to be used for taking pictures (“Bond, James Bond”) and of course, there will be no need to pair the device with a smartphone as it will operate as a standalone cellular device.
While Samsung is pushing the limits of current technology with such a device, they are not the first to patent such an idea as China’s Oppo (pvt) received a patent for a foldable watch all the way back in 2019, although it was a very different display set-up.  Given the complexity of such a device (the patent is 113 pages), we expect it might be some time before Samsung makes such a watch available to consumers however the patent drawings were quite specific on how the mechanical components might work, likely more to keep others from duplicating the idea than Samsung having proved out the mechanics on a scalable basis.  Interesting idea though.

An audiologist must have a doctoral degree, complete 9 months of clinical experience and be well-versed in a wide variety of medical, clinical, and social topics in order to pass the certification exam necessary to hang out a shingle.  That said, many audiologists not only diagnose hearing problems but also provide corrective ‘appliances’ commonly known as hearing aids.  These little items, which are only covered by expensive insurance policies, can range from a few hundred dollars to a few thousand dollars, and given that they are essentially mobile devices, they need battery changes regularly, with many batteries costing over $25.  Some audiologists replace batteries for only the cost of the battery, while others charge rates almost as high as an office visit.
As with any consumer product there are those that take advantage of consumers, and in the case of hearing aids, the market is oriented toward an older crowd, many of whom have fixed incomes or limited financial resources.  Experiences with elderly family members being charged outrageous fees for ‘fittings’, ‘adjustments’, and repairs are quite common, all of which are added to the initial price of the devices.  Long gone are the days of hearing aids that sat in your breast pocket and were connected to a device that was the size of a pack of Lucky’s, but rather than prices going down as electronics miniaturization made modern hearing aids smaller than wireless earbuds, prices remained high because you could not buy hearing aids from anyone other than an audiologist or associated vendor.
In October, the FDA issued a proposal to allow millions of US citizens access to low-cost hearing aid technology by creating definitions for a category of OTC hearing aids, repealing the ‘conditions of sale’ that had previously limited access, and amending the existing labeling requirements for these devices, essentially granting public access to such non-prescription hearing aids.  The ruling, which has yet to be finalized, would not remove the classification of prescription hearing aids but would add a category that would allow access without an examination by an audiologist or require a prescription.  The FDA is asking for public comments by 1/18/22.
Over 30m people in the US are affected by some sort of hearing loss yet only 20% of that population seek ‘intervention’.  When queried the typical hesitancy comes from high cost, the stigma associated with being seen as old or debilitated, and the cost relative to the benefits received, and while there will still be the “I hear what I want to hear”, and the “…Yes dear..” crowd that will still reject the idea, the cost of such devices will likely become a competitive battleground, benefitting consumers.  The FDA will have to maintain a careful eye over OTC products, which will still be under their purview, but we expect a wide variety of prices and options to become available once the rule is approved and in this case the FDA rules preempt any state regulations that differ from or add to the new FDA rules. 
While audiologists might lobby to have the potential rules eliminated, it is certainly time to eliminate the high cost of hearing aids for those unwilling or unable to spend thousands to regain their ability to engage socially or just hear the birds chirping in the AM.  Once the field of OTC hearing aids is opened, R&D in new product development and new technology will become financially viable given the potential market and remotely controllable hearing aids, based on a smartphone app, would be relatively simple to operate and allow the user to gain as much control over the timbre and tone of what they hear, as they would like.  They can still turn it off when the grandkids start screaming or when the wife starts nagging, but at least they can listen to “When the Swallows Come Back to Capistrano” or “Pennsylvania 6-5000” on the old Victrola.

​With Google’s (GOOG) $2.1b purchase of Fitbit (pvt) in January, there was little question as to the company’s commitment to the WearO/S, the operating system that captured ~17% share of global smartwatches in 3Q, 2nd only to Apple’s (AAPL) Watch O/S.  Much of the share gains seen for Wear O/S (3% share in 3Q ’20) have come from Google’s collaboration with Samsung, essentially merging Wear O/S and Samsung’s Tizen O/S, which was used in the Galaxy Watch 4, but rumors abound that some Google employees have been seen wearing a Google developed “Pixel Watch” that is being tested for eventual release.  Google’s hardware honchos have commented earlier this year that an in-house Wear O/S wearable was being developed, although the Fitbit team was still in the early stages of integration.
The “Pixel Watch” would be Google’s first entry into the smartwatch world, which is dominated by Apple, with a number of other smaller brands with shares below 10%, a number of whom have their own operating systems.  While the Google Wear O/S has been around since 2014, Google has stayed away from the smartwatch market itself, although it was said to have helped in the development of an LG (066570.KS) watch a few years back that was to be sold as a Google branded product, but was rejected by Google and remained with LG’s line. 
While Fitbit’s watch line is oriented more toward a pricing tier of $200 or less, Google’s watch is expected to be priced around $300, putting it more in competition with both Apple and Samsung, so we expect much marketing from Google to attract some of the less budget conscious smartwatch buyers.  Samsung’s Watch 4, which has been  well received, falls right into that $300 price tier, so would likely face the most direct competition from a Google watch offering, while much of the Apple watch line is a bit higher in price.  We expect it will take some time for Google to gain significant traction in the smartwatch space, but a well-developed O/S should help them offer some interesting features, especially as the Fitbit development team becomes an integral part of the process.  Expectations are for a release in March or April 2022 if the version being tested does not require major revisions.

​Canada runs at a slower pace than the US, but should that mean Canadian time is different than US time?  If you were an iPhone user yesterday, it seems that you woke up an hour earlier than usual.  Cellular based Apple (AAPL) devices decided that they could not wait until next Sunday and set themselves back an hour, anticipating the end of daylight savings time by almost a week.  The issue came not from iOS or WatchOS, which have had DST problems in the past, but from a number (unknown) of Canadian cellular carriers, particularly Bell of Canada (BCE), where the company indicated that it had discovered and was investigating the problem at 7:42 AM, with the company righting the problem by 7:50.
Some other carriers were affected but more sporadically, with the problem being traced back to Bell substituting a -5 in front of Greenwich Mean Time, rather than a -4, which told phones that it was six days later and had them reset to that incorrect time.  Some folks found that company managements were not particularly sympathetic to their lateness, given they were unaware of the problem, while others did not consider any excuse a viable one for being an hour late.  It is possible to turn off the automatic date and time updating on an iPhone, and it will still correct for DST as that is embedded in iOS, but the phone will no longer update if you cross a time zone.  The alternative is to get an old alarm clock, as they did not update automatically and avoid any battery complications by plugging it in.  We live in a complex world.

Your doctor told you that you need to get more exercise so you bought yourself a smartwatch that tells you how many steps you have taken each day and all sorts of other information that can either incentivize you to take better care of yourself, or scare you into seeing your doctor more often.  There is one problem with smartwatches and that is the battery, as the more you use the functions that the watch provides, the shorter the battery life and the more often you have to recharge.  A good smartwatch is likely going to advertise that it can last ‘days’ before it needs a charge, but again that depends on what apps are running and how often you access the information or connected sites. 
With average use a decent smartwatch like the Samsung (005930.KS) Galaxy Watch 4 should last two days on a charge, but using the watch during an hour at the gym, keeping notifications on, and tracking your sleep will bring that down to an hour or two over 1 day.  Even with fast charging that means over an hour when your watch is charging, and if you have an early magnetic charger model, which will likely fall off at least once during the charge, it could take many hours, which defeats the purpose of a watch that is also a body function tracker.
Samsung seems to have approached the battery life problem a little differently in a recently published US patent Office application that charges a smartwatch battery via solar cells built into a polymer device called a “Luminescent Solar Concentrator” that is part of the watch wristband.  The problem with using solar cells to charge anything is they need to be as close as possible to the direction of the light source (“incident to”) to produce enough energy to make a difference.  While stationary solar cells can be positioned to receive as much direct light as possible, a smartwatch is going to be moving at almost all times and will never be in the best position to produce power. 
This is where the LSC comes it as it is a polymer containing quantum dots with solar cells attached on the sides and bottom.  Light entering the top will be coming from a number of different angles, with only some of the light incident to the solar cells.  The quantum dots will absorb the light that is not incident to the solar cells and re-emit the light in a direction that is incident to the solar cells, therefore capturing light that might have been too weak to power the cells.  Taking it a bit further, the solar cells can be designed to be sensitive to a particular frequency of light (color) so one cell could be sensitive to warm (yellow) light while another cold (blue) light, allowing the watch to be charged under almost any lighting circumstances.
As always with patents, there is no guarantee that the technology in the patent will ever be used commercially, however the idea in a lesser form (no quantum dots) with little success.  Perhaps this new iteration might reduce the need to charge as often and make smartwatches not only helpful but also ‘green’.  We will keep an eye open for any hints toward the Samsung Galaxy Watch 5 due out next May.

​Apple (AAPL) is certainly the leader in the smartwatch segment, with a share over 50% in the last few quarters, and while Samsung’s (005930.KS) share is around 15% the do hold the number two slot after Apple, and their next iteration of their smartwatch has just been certified by the FCC, hinting that its release is relatively soon.  While no official date for the release of the Galaxy Watch 4 or the Galaxy Watch 4 Active has not been set, expectations are that at least one or both will be announced in August, given that the original Galaxy watch was released in August (2018), as was the Galaxy Watch 3 (there was no Galaxy Watch 2), and the Galaxy Watch Active 2.
That said, there are expectations that this Galaxy Watch will be different than previous versions in that Samsung will offer a combination of its own Tizen OS, along with Google’s (GOOG) Wear OS for the first time.  While Samsung has been promoting its Tizen OS for years, it does not have the following in the application developer community that Google does, and when it comes to wearables, the applications available to the user are second only to the look of the device.  If Samsung does offer this OS combination, it would represent an acknowledgement that Google’s application development universe is 2nd to none and it plays a key role in selling wearables.  From the user’s standpoint, an updated Samsung One UI interface will make the OS look almost identical to what users have seen before, but now including Wear OS apps.
There is some indication that these expectations are not just idle speculation, as Google has mentioned that it has modified Wear OS ‘with Samsung’s help’, which is unusual in that any modifications to the OS are usually made by the company releasing the wearable, but in this case, in order to gain the Samsung watch user base, it seems Google has made modifications for Samsung, giving it a better chance of competing against Apple’s Watch OS.  Apple does not let Android smartphone users pair with an Apple Watch, but iPhone users are able to use a Wear OS smartwatch, so you can keep your iPhone but migrate to a non-Apple smartwatch.  In the past, Wear OS and Tizen OS applications that worked with the iPhone were very limited, and we expect the improvements made to the Wear OS will open up many of its applications to iPhone users, giving Samsung a more attractive entry point to Apple’s smartphone user base.
There are some points that go beyond the potential for Samsung’s adoption of Wear OS on the Galaxy Watch 4, such as a glucometer that would measure blood sugar levels or a faster chipset, potentially produced using a 5nm process (previous version was 10nm), and the return of battery supplier CATL (300750.CH), who was the supplier of the battery in the ill-fated Samsung Galaxy Note 7 that caused the phones to catch fire and caused a global recall, and while a glucometer and a faster chipset might be selling points, we expect adding Wear OS, should that be the case, would have a greater impact on sales over time.

The Apple Watch 6 Series, released last September, costs anywhere from $400 to $900 depending on the case material, the case finish, and the band, but the cost to produce the watch itself, along with the assembly, testing, and packaging are a bit less.  Given the three case material choices, the nine case finish choices, and the six band types, along with special editions from Nike (NKE) and Hermes (RMS.FP), there are almost an infinite number of possible combinations to evaluate, but the folks at Counterpoint have done their best to breakdown what would be an almost generic Apple Watch 6 to give an idea of the BOM.
The most costly component category is processor/memory, which includes Apple’s S6 SIP (System in Package), Apple’s W3 wireless chip, which handles Wi-Fi, Bluetooth, and cellular, and SK Hynix’s (000660.KS) RAM and on-board memory.  The display, an LTPO based 1.78” OLED assumedly produced by LG Display (LPL) and is covered with Apple’s ION-X glass, which we believe is produced by Corning (GLW), but potentially strengthened by an outside source.  Apple also provides the option for a sapphire cover glass model, but in this case the BOM is for ION-X rather than the more expensive sapphire. 
The watch body also has options but in this study the body is a combination of aluminum and stainless steel, while the back is ceramic and sapphire.  The casing itself is the 2nd most costly category, which in this device is more costly than the display, which in most CE devices is the most expensive component category.  Since Apple promotes the sensor capabilities of the Apple Watch 6, which include the usual accelerometers and gyroscopes (movement and fall detection), barometers, altimeters, and compass (location?), the sensor category is substantial, and also includes well-promoted blood oxygen and heart-rate sensors.  The UWB (Ultra-wide Band) sensor, the key to Apple’s location tracking system however, is not part of the sensor category and adds to the processor/memory cost.
All in, the BOM for such a generic Apple Watch 6 is $136, leaving Apple and retailers considerable profit margin.  Given Apple’s dominant share (33.5% in 1Q ’21) and the strong y/y growth in the category (35% t/t), the higher cost of miniaturizing Apple Watch components seems to have little effect on profitability.  As we get closer to the usual Apple Watch release date (typically in September) there have been rumors of both additional sensors (Blood Glucose and or blood pressure) and extended battery life, and the potential for a micro-LED display, which has been rumored since late 2018, but regardless of the features, we expect Apple will maintain a similar BOM or at least margin, regardless of the feature set.