Intelligent Hardware / 智能硬件Trend in China

April, 2015

Lucas Wang, CEO of HWTrek

@ WI Harper ASM 2015

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THE WORLD

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Reimagining Everyday Objects by Matt Witheiler

hardware products that bring new consumer experiences to products we interact with on a regular basis, transforming the every day

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Gartner defines "makers" as inventors, tinkerers

and entrepreneurs who create and manufacture

products using traditional tools and new digital

design and rapid prototyping and manufacturing

technologies. "Startups" are fledgling businesses

that are often technology-focused and have the

potential for high growth.

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Gartner Says By 2017, 50% of Internet of Things

Solutions Will Originate in Startups That Are Less

Than Three Years Old

Smaller Quantity but Diversified categories

• USD1,900B -> 7,100B IoT market size 17.5% CAGR from 2013 to2020 by IDC

• IDC defines the Internet of Things as a network of networks of uniquely identifiable

endpoints (or “things”) that communicate without human interaction using IP

connectivity – be it “locally” or globally

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CHINA: HUGE AS THE SAME FOR

EVERYTHING ELSE

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IOT market to target RMB$750B in 2015, and 22%

growth rate

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Smart Home market to reach RMB$43B with 42%

growth rate in 2015. Comparing to Globe's US$68B

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Wearable to have 35M units shipped, 170% growth in

2015 to be a market of RMB$10.6B

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• Almost 50% people could accept RMB$501~2000 wearable goods

• 7% could go higher, and, 30% stocks with RMB$201~500

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Yes, people are affordable

Mixed echo system supported with locals and overseas

players still

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Local “New generation” of hardware startups are

emerging too

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Now, copycat no more. Ninebot to buy Segway

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All similar product strategies among giants:

Cloud/APIs, echo system, routers, TVs and kids

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HOW TO PERCEIVE THIS MARKET

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It starts with a twit by US embassy about Beijing air

condition in 2011

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A less 1% penetration market of air purifier, suddenly

crowed with “Internet Companies”

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Issues Here

• High marketing & sales cost

– Immature market requires more education costs

– Crowdfunding, pre-order or flash sell creates high risk of production management

– Fewer retail channels available

• Failed to capture the real demand

– Too much emphasize on marketing and fancy features

– Not so much “intelligent”

• Few differentiation

– No “star” product with unique features, more similar goods on the market

– Easily to get tired customers without motivation to purchase

• Incomplete industry standard

– Google is NOT working here

– Home appliances allies vs. Internet gangs vs. traditional PC families

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THE RESOURCES: VC & CROWDFUND

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Money is flowing into “Smart Home” and “wearable

related” projects and sectors

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Crowdfund concept brought in China around 2012, but got huge attention in 2014 which

results in 23+ crowdfund sites. Even with professional media to release their version and

TV shows about it. For the leader now, JD Crowdfund, it is online on July, 2014 and

accumulated 300+ successful projects with RMB$140M raised. And, hardware ate up

56% of that money

In 2014, total

10,000

crowdfunding

projects including

equity and reward

basis with

RMB$1,031M raised.

Among them,

reward basis

projects generated

RMB$ 349M by

near 6,000 projects

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HWTREK: BRIDGE THE IDEAS TO GOODS

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Mismatch of Resource and Demand

Demand side:

• Fashion alike product profile, short lifecycle and faster revision

• Decentralized innovation, 8/2 => 5/5 with longer long tail

• Service/software as the core of teams

Resource side

• Need for new topics: PC market is not coming back

• ODM model is design for millions of quantity production with matured product design and team

• SMEs vs. SMEs: inefficient of management and communication

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HWTrek: Build to Deliver

• HWTrek is a trusted hardware innovation platform started in late 2013 aims to accelerate the development of new hardware projects. HWTrek creates an end to end ecosystem from prototyping to mass production partners which hardware creators could find the seamless support of “build to deliver”.

• We are a team of hardware lovers with background in hardware manufacturing, semiconductors, mobile Internet and social networks, a combination of software and hardware

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Matching and Bridging

• Up to date, HWTrek connects to over 300 hardware supply chain Experts and

over 500 manufacture related companies. 120+ projects got bridge to the best

manufacture partners for last 10 months.

• Successfully reaching to creator communities in San Francisco, Berlin,

Barcelona, London Beijing, and Taipei, over 2,200 creators registered and look

for partners

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Connect All: Collaboration Hub

Collaboration Hub (PDH): A core project management software to bring Experts, Creators and HWTrek together helping on schedule and resource allocation. A hardware development focus oriented with intelligent learning, like a Navigation system to guide the project. We will track all progress and patterns even the project fails!

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HWTrek’s Competitive Edge

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• Open & transparent Community, 2,200+ Creators, 400% CMGR on monthly reach. 700+ project listed

• Multi to multi platform, end to end ecosystem served, 300+ hardware Experts

• Seasoned project managers from Internet, hardware, manufacture and investment

• Solid and incomparable manufacture network, 500+ supply chain partners

• Project management and intelligent system to connect all

• Asia operation cost

HWTrek will solve the missing piece in the new hardware ecosystem

What Creators say about HWTrek

It’s also great to be able to network with the other hardware companies

going through the same processes as us right now, and it’s great that

HWTrek is able to connect companies like us with the manufacturers to

potentially make partnerships.

Mike Kasparian, CTO of Atlas Wearables

We needed some serious electronics and HWTrek was able to meet our rigorous

requirements, providing unparalleled support for the RFQ process to source for

the right supply chain partners, and helping to more effectively keep track of

the product’s progress through every stage of development.

Anthony Matanna, Founder of Hooke

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There are 700+ more on going…

Traditional vs HWTrek, from Offline to Internet

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HWTrek duplicates the offline activities to Internet basis as aiming to change the way how supply chain communication works since last 10 years