Feb. 27 (Bloomberg) -- Move over, Frodo. A Japanese startup is designing a smartring to lord over other gadgets.
Trace a dollar sign in the air and pay for your coffee. Write “TV” with your finger and your television set turns on. Charge a subway fare. These are just a few of the applications envisioned by Logbar Inc., the Tokyo-based startup developing the device scheduled for release this year.
While Apple Inc. and Google Inc. are building smartwatches and eyewear that will likely sell millions of units, startups like Logbar are developing niche products. As consumers seek new ways to integrate computers into everyday life, the market for wearable technologies will jump about 14-fold in five years to $19 billion, Hampshire, England-based wireless analysis company Juniper Research estimated in October.
“Making things has become easier,” said Benjamin Joffe, a managing director at Haxlr8r, a venture fund that helps finance hardware startups and organizes boot camps in Shenzhen, China, and San Francisco. “The cost and timeframe have been compressed to the point that some startups can go to market with a new product in less than a year, way before a large company.”
Logbar hasn’t accepted venture capital funding, Chief Executive Officer Takuro Yoshida said. The company plans to offer the ring to developers from the middle of this year. Finger apps will allow users to make gestures triggering commands executed through devices such as smartphones, he said.
Yoshida, who previously built an iPad app for a bar he ran that helped patrons interact by displaying what drinks they ordered, said he wanted to create a device that fostered communication. He declined to say what the smartring will be made from or provide more details about the gadget’s apps.
“I’ve been focusing on connecting people in the real world, beyond the digital one,” Yoshida said last month. “It’s difficult to build personal connections at an application level, so I turned to hardware.”
The number of smart devices that connect and talk to each other through Wi-Fi is expected to grow to 200 billion by 2020 from 2 billion in 2006, according to Intel Corp. That growth will be fueled by the ease with which gadgets can link up with phones and tablets through operating systems like Google’s Android and Apple’s iOS, said Anand Srinivasan, an analyst at Bloomberg Industries.
“It has become easy for a startup to design a wearable to address a specific issue and have it connect to a very defined ecosystem such as Android or iOS,” Srinivasan said.
Large technology companies including Samsung Electronics Co. and Google are also developing wearable devices and promoting operating systems they hope will anchor a growing constellation of smart gadgets.
Suwon, South Korea-based Samsung this month unveiled new Gear smartwatches using the Tizen operating system it helped develop with Intel Corp. The advantage of the platform over others is that it was built to make devices more compatible with each other, Yi Woo Bok, a principal engineer at Samsung’s software R&D Center, said in November.
Samsung, Asia’s largest technology company, said Nov. 1 it shipped more than 800,000 Galaxy Gear units within two months after the timepiece went on sale. The company registered a design in South Korea in October for eyeglasses that can show information from a smartphone and enable users to take calls.
NTT Docomo Inc., Japan’s largest wireless carrier, plans to release eyewear that can translate mobile texts or menus into other languages in time for the 2020 Tokyo Summer Olympics.
Sony Corp. is seeking a U.S. patent for a “SmartWig” hairpiece that could help navigate roads, check blood pressure or flip through slides in a presentation. Sony hasn’t decided whether to commercialize the technology, according to Saori Takahashi, a Tokyo-based company spokeswoman.
Big companies such as Sony and Apple can’t afford to develop too many different products at once, Joffe said.
“The products they make have to either do something for the bottom line or invest in the future,” Joffe said. “Making a bet on an entirely new product is very costly and risky.”
While large companies are looking for products that will sell millions of units, startups are able to focus on niche markets, Srinivasan said.
The smaller production scale and the declining cost of developing and manufacturing also are making financing easier. Startups that once turned to venture capital firms for backing are shifting to crowd-sourced funding sites like those operated by Kickstarter Inc. and Indiegogo Inc., or less formal networks such as friends.
Los Angeles-based startup Melon created a headband that records electrical activity along the scalp to measure brainwaves, recorded through a smartphone app. The company pre-sold more than 2,200 of the devices on Kickstarter and raised more than $290,000.
San Francisco-based Pebble Technology introduced a smartwatch that receives emails and text messages a year before Samsung released its $299 Galaxy Gear. Pebble raised more than $10 million on Kickstarter for a $150 smartwatch compatible with both Android and iOS.
So far, Logbar is self-financed through Yoshida’s savings, although venture capital companies from Japan, Singapore and the U.S. have expressed interest in taking stakes, he said. Logbar is seeking partnerships with companies that control operating systems, such as Apple and Google, he said.
The attractiveness of wearable devices is increasing as consumers become more aware of the technology, Nitin Bhas, an analyst with Juniper Research, said in an e-mail.
“For next-generation wearables to go mainstream and for smaller players to succeed, the segment needs the backing of players such as Apple, Samsung and Google,” Bhas said.
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