Software is becoming the wearable kingmaker

One of my favorite software innovations is the mouse.

Nope, it’s not much of a hardware innovation. Devising a user interface and user experience that could be driven by a trackball is where the magic came from (HT: David A. Wheeler).

Wearables are the new mice. That is to say, in the wearables arena from 2016 and beyond, innovation is increasingly going to come from software. We’ve seen exceptional hardware innovation recently in areas like accelerometers, optical heart rate detection, and stretchable sensors. Now we need software to tell us what these existing and new sensors are for.

What is a heart rate sensor really for? I can assure you that “To tell me my heart rate” is not a good enough answer. But if accurate heart rate in conjunction with other sensors, machine learning, and an expert system can tell me that my fatigue levels require a recovery session, or that my nervous system is nearing its peak performance for training, then I’m starting to get impressed. Or imagine an application that truly squeezes value out of a barometer, accelerometer, and GPS, by telling you that your stride length is 25% too long for the hill that you’re climbing if you are seeking to build muscular endurance. Now you have a reason to pay a premium for those sensors.

These examples only scratch the surface. As health insurers start to sense the possibilities for using wearables to measure and promote behaviors that reduce risk factors for our most common diseases, they are pushing for the development of additional wearable sensors such as EKG, exercise blood pressure, and heart rate variability detectors. But the outputs of these sensors will be even more incomprehensible to laypeople than those of the current generation of sensors. Usability and usefulness will depend almost entirely on interpretive software, supported by medical professionals.

So the primary reason for wearable hardware vendors to embrace software is to create a user experience where the data inputs are made meaningful and given purpose. Users are given a genuine, life-enhancing reason to stick the hardware in their ears or on their wrists and clothing. But there are other reasons we are about to see this trend take off.

Firstly, clever use of software shortens the cycle for hardware vendors to bring something new and distinctive to market. A minor change in hardware form factor accompanied by software that delivers a radically improved user experience is sufficient to justify a new product release. We saw this in the way that new operating systems would drive the uptake of PCs.

Secondly, an experience-driven approach that relies on software can radically reduce R&D spend for each release. A new feature is much cheaper to code than a new button is to engineer. The automotive industry has recognised this, and more than half of its overall R&D spend is now directed towards software, rather than design and engineering. Modern vehicles exploit millions of lines of code in order to deliver many of the performance features than are used to market them.

The rewards of exceptional chemistry between software and hardware can be very high. In 2012 Flexera calculated that the latest iPhone and and the latest Nokia cost about the same to manufacture, but the iPhone commanded a price premium of 40% over its competitor. And we all know who won that race. The Nokia was a good piece of kit, but its software and application ecosystem were no match for the iPhone’s.