If you have reviewed my recent Seeking Alpha article "The Small Private Company That Is Disrupting The Industrial AR Market," you will be aware of my opinion that RealWear’s HMT-1 head worn wearable device is about to disrupt the Industrial AR market. I recently had a chance to connect with Andy Lowery, CEO of RealWear Inc. to discuss his view of the Industrial AR market and how RealWear
aims to scale quickly and grow rapidly in this new segment.
On the heels of what sounds like a successful showing at EWTS 2017 for RealWear, Andy was kind enough to spend about an hour with me discussing the state of the head-worn AR market and how RealWear plans to take part in the significant growth I expect will occur over the next 5 years. What follows are some highlights from our discussion in a Q&A format …
The industry is seeing a de-coupling of wearables and AR, they are becoming
separate streams; Industrial AR market is about to get big very fast
RealWear HMT-1 was the “belle of the ball” at EWTS 2017 – many vendors were showcasing the HMT-1 to highlight software applications and use cases
For head-worn wearables, the UI has to be hands free; the UI has to be voice and
no one does voice better than RealWear
The target market for the RealWear HMT-1 is the large ruggedized tablet market,
NOT the wearables headset market
Andy Lowery, CEO of RealWear Inc.
"In terms of market size, I’ve heard the number 15 million enterprise tablets already deployed. If you want to target a slice of that, are we talking tens of thousands of units, hundreds of thousands of units, or millions if units? How big could this market be by 2020?"
Andy: "When we look at the business, we take a very conservative and pragmatic approach: how fast can we scale, how fast can we grow, we ask ourselves all these questions. I am looking to quickly get to tens of thousands of units shipped annually within the first 18 months. Within a few years, hundreds of thousands of units, if not low millions of units shipped annually is an attainable number.
In Retail, if you put 3 or 4 devices in each store, well, there’s nearly six figures of head worn tablets right there! The potential is so broad, across so many enterprises.
If you think about the equation, which is simply this:
If the answer to these questions is yes, would it be better or more convenient:
If the answer to the last two is yes, now we have a potential RealWear customer. Those customers could be McDonalds, Enterprise car rentals, Exxon, Shell and many other oil & gas companies we originally targeted. What we are quickly finding out is that our space isn’t a vertical sector, our space is a very broad and thin horizontal segment that cuts across many, many industries and geographies and modal paradigms.
We are trying to focus on doing one thing really well: delivering the hardware with an operating system and a user interface that sets a new bar. If we do that really well, we can let the ecosystem grow and let the system integrators deploy our device.
Having said all of that, we could quickly see ourselves into the millions of deployed units within just a few years."
"Can you really get the HMT-1 to market at around $1,000 per device? Lets say under $1,500?"
"I am very curious about who shares your vision and has committed early seed funding?"
Andy: "We are in the process of our first significant priced round right now. Many discussions are underway. We have not closed on any terms sheets. There are a number of interested parties including potential customers. I cannot name names, as we are under NDA.
To date, RealWear has been funded by a combination of executive team self-funding, friends and family as well as by strategic manufacturing partner and Chinese company, RealMax.
Folks that are working closely with us are saying, “Let me put my own money in.” That is a testament to the team and the culture and what people see as the company that will break the mold on wearable computing and make it much more ubiquitous."
"In terms of conversion rates from Pilot to Deployment, what are you seeing from your customers?"
Andy: "A lot of folks are in process or just completing the Pilots they have conducted with their HMT-1 device. Primarily remote connectivity, remote mentor type implementations. There are some more complex pilots. Pilots are exceeding expectations.
Depends on size of customer. As an example, a large retailer with 6,000 to 7,000 stores globally deploying 3 or 4 units per store becomes the largest rollout of any wearable product ever in history. A tiny blip for the customer, but a big deal for wearables."
"Smart glasses are vying for industry standard position with RealWear HMT-1 on the high end, but I see your device transitioning into the middle of the segment and becoming the industry standard displacing the smart glass form factor. I see the HMT-1 becoming the device of choice like iPhone has become – if you’re going to do a wearable headset, the HMT-1 is the gold standard …"
Andy: "It is quickly evolving into that. If you were here at EWTS, you would have seen most software partners showcasing the HMT-1. It seems like we have a high degree of potential to be exactly what you talk about. As a result of RealMax investment, watch China as an area of opportunity for RealWear.
The HMT-1 will be the iPhone of IoT 4.0."
Follow these links to take a closer look at what the HMT-1 is all about
through video content from RealWear:
Andy: "Yes. If you want to buy one device you will pay somewhere around $1,500. But, as you get to scaled quantities and you’re buying 500 to 1,000 devices, the price will decrease to roughly $1,000. If you’re are prepared to scale, the price will be comparable to a ruggedized handheld Android tablet. The main focus for RealWear isn’t wearables competitors, its handheld Android tablets. That’s my main competitor. That segment has the right scale to make RealWear a successful company."
RealWear HMT-1 device