Wearable Electronics for Healthcare – Future Development

1. Wearable Electronics for Healthcare – Future Development Dr. Enboa Wu (吳恩柏), VPGD ASTRI 20 March 2015

2. Future Job Replaced/Created • 40% Fortune 500 to be replaced by new exponential companies in 10 years. •Example: Kodak bankrupt in 2012 vs. Instagram acquired by Facebook for $1B . • 50% of US workforce will be displaced by robots in 10 years. •Factories will dramatically reduce the workforce with current skill set. • Cisco forecast ($19T) IoE could create 170M global jobs by 2020. • Majority of new jobs will be for knowledge workers. • Major retraining will be needed. • Location of jobs may mirror Apple’s iPhone 4s breakdown of ASP: • 3% ($14): cost of assembly (China) • 32% ($178): cost of components (global) • 66% ($368): Apple’s share (US) 100% ($560) Source: Peter Diamandis and Singularity University forecasts:

3. By 2020+, 5G is going to replace 4G Source: http://www.imt-2020.org.cn • 1B smart phones sold in 2014 • By 2017, 10B internet devices, 77B Apps… (DigiTimes, 10/2014, 3/2015)

4. Internet of Things (IoT) Enabled Smart City Automotive Navigation & Parking Healthcare & Wearable devices Smart Homes Tracking & Tracing Consumer Electronics Payment

5. Education: Stanford U. as one example • Top three universities on entrepreneurs: Stanford, Harvard, UC Berkeley (http://www.dailycal.org/2013/08/18/uc-berkeley-third-largest-producer-of-entrepreneurs-report-says) • Stanford created 18,000enterprises, $1.27 trillion USD/year revenue • What are the key success factors?

6. mHealth (eHealth, Digital Health) Represents the emerging market for mobile fitness, wellness and healthcare devices and services. • Enabled by emergence of low cost sensors. • Expected to save 35% treatment cost of chronic medical conditions in coming years. • US Healthcare spending is about 19% of GDP. • Expected to bring healthcare to everybody on Earth. • Expected to dramatically redefine medical industry and the function and responsibility of doctors. • Large number of traditional medical/equipment medical companies will cease to exist. • First “death sentence” was “issued” to $5B EKG industry. • Diagnostics will shift to AI computers (such as Dr. Watson). • Doctors will need to learn how to use Big Data generated by sensors and processed by supercomputers in patients’ hands. • Two challenges: (i) users mis-interpret data; (ii) privacy issues. • Three models : Selling (i) services; (ii) subscriptions to premium content and advice; (iii) data. • Easier to be adopted in developing countries. Inc Magazine (February 2014); The Economist Intelligence Unit (2015)

7. Global Wearable Market : 20B USD by 2018 • Wrist Band and Watch: 18M units in 2014, and 51M units in 2015 Source: Inc Magazine, Juniper Research, DigiTimes (3/2015)

8. From Silicon Valley: Early Stage VC Source: CB Insights

9. Global Ageing Population • In 2014: China has 200M population at 60 years or older, and 3M new cancer patients. 9 DigiTimes (3/2015)

10. How About Hong Kong? Hong Kong is now a member of Age-Friendly Cities (AFC). Source: MPF Authority 10

11. Value Chain – Who Pays the Bills ? Clinics Operators Gateway (Big Data/Knowledge-based analysis Service Platform (Partners) Devices & Sensors (Clinical & Behavioral Data)

12. Smart Healthcare for Elderly • Reduce public medical expenditure/burden • Huge demand in aging population • Lower risk and less regulation

13. What does Product Innovation mean… By JAWBONE US$125 RMB$79 • Innovation should be more than this…. • To JAWBONE: Competitive edge is not significant. • To XiaoMi: What is the strategy behind? • What if a product could monitor • Activity, heart rate, blood oxygen, mental stress, sleeping quality, apnea, dementia risk, continuous blood pressure, etc., • And predict long-term physical, psychological and cognitive risk…. • Can Apple make it?

14. Self-monitoring of Blood Glucose (SMBG) – A 20 Year Odyssey • Most diabetes patients may need to test 3 - 4 times per day • foods • portions • exercise • medication doses • History of non-Invasive measurement of blood glucose Source: UpToDate, Inc, diabetiker-mailbox.com

15. “Cloud Can (云罐)” vs. “Watson” • Tsinghua Tongfang (清華同方)： • 1997 IPO, 24B RMB market cap, cover IT, security, energy, investment, science park, etc. 544 overseas patent applications. • Cloud Can:669RMB, integrating entertainment, education, medical, security, finance for home use. • IBM: • 160B USD market cap, the leader in computer, IT integrated solution, granted 6800 US patents in 2013. Suffering setback due to industry paradigm shift… • Watson: beat human being at Jeopardy! in 2011, HW cost of $3MUSD, aim for providing medical/ healthcare, investment/finance services. 15

16. ASTRI’s Healthcare Electronics Good arterial stiffness Blood glucose level before/after meal Physiological Psychological ISO13485 Certified & Satisfied with FDA requirements A balanced system

17. Jointed Effort: RFID System for Better Elderly Care Audible Alert Audible Alert RFID Reader RFID Garment Alert Notification Interface Control Centre Care Centre Entrance/EXIT Co-developed by 3 R&D Centres: ASTRI, HKRITA & LSCM

18. China: Past Success vs. Future Prosperity • In past 30 years, success was due to… • Low labor cost: no more • Huge domestic market: yes • Adoption of foreign tech: will be getting harder • Government investment: Concern on RoI • Looking into Future, how to avoid Mid-class Income Trap…. • Treasure talents, respect & accumulate IPs • Innovation on technology, product, and business model • M&A to accelerate technologies & brands enhancement Source：财新《中国改革》 2012年第10期, 资委副主任、党委副书记 邵宁 • It is an era of intelligence, IoE, and BD, how to prepare yourself well for the paradigm shift, the opportunity, and challenges, especially for mHealth? 18／117