The future is exciting – that comes with the territory when you work in electronics distribution, and it benefits distributors to understand where the industry is headed, to anticipate which applications will experience growth, and monitor demand for the components that underpin them. As a result, an attentive distributor can gain an unusually broad insight into emerging industry trends.
There are many fascinating areas that will show growth over the next few years; 3D printing, robotics, etc. but few are as fascinating as the field of medical and health/fitness devices.
As sensors and wireless semiconductors become smaller and more cost effective, and pressures upon various health services increase, we’re seeing the increasing penetration of such sensors into wearable devices. Items such as wristbands, watches, shoes, sunglasses, etc., can be used to monitor fitness, but also have the potential to detect e.g. heart attacks, epileptic seizures and stress in autistic individuals to name a few. Victoria’s Secret has already launched a Smart Fitness bra, and L’Oréal has partnered with a Lab to develop flexible patches for the detection of skin conditions.
In trying to decipher which ‘low risk’ medical devices need to be regulated, the line is a little fuzzy. Device makers are currently seeking clarity on where this regulatory line sits. However, as it stands, health and fitness wearables generally do not currently require medical-grade FDA approval. Hence this lower-risk ‘health’ devices arena is one that is likely to see particular growth.
IHS has previously predicted that general wearable technology will rise from 96m shipments and $8.5bn revenue in 2012 to 230 million shipments and $32bn revenue by 2019. On the distribution side, I believe this growth seems likely to fuel a significant increase in demand for components such as wireless transceivers, NFC chips, smart sensors, signal boosters and low power accelerometers. Overall ON World has predicted that by 2017 we will see 515 million sensors for wearable, implantable and mobile health and fitness devices, (up from 107 million in 2012).
So there’s clearly significant growth. But what sort of distributor is best suited to service it?
If you consider health and fitness devices in isolation, there is generally no need for dedicated medical expertise at the distributor end, nor the ability to give regulatory consultancy. This opens up the field somewhat.
If you consider such devices holistically, and the range of parts that need to go into them, finding a reputable global firm with access to a wide range of authorized, franchised product line is a clear advantage. Manufacturers need access to a complete range of products, from processors to connectors, electromechanical components to memory and sensors. And the ability to get the maximum range of these components from a single distributor aligns well with the cost-sensitivity of this category of devices.
However, in deciding on a distributor, health and fitness device designers have to consider their wider sourcing profile, and exactly how much priority any given distributor is going to offer them.
Naturally the medical health market features a number of large and well-known players, and many companies will find themselves servicing sizeable consumer-level production runs. However, for many, component orders will be large, and well-suited to tier one distributors.
However, a great deal of the companies I’ve seen entering the wireless fitness and health device market have, in fact, been what you’d call ‘mid-sized’ companies with ‘mid sized’ requirements. They’ve also tended to have relatively High Mix Low Volume requirements, (for devices that generate relatively low margins for the distributor).
In this case you suddenly narrow the number of distributors who can service your health and fitness device requirements effectively. Chances are the tier ones won’t be an appropriate choice for you, as they are neither interested in HMLV requirements nor inclined to give due priority to mid-sized accounts.
Additionally, given the notable constraints involved in the design of such devices, companies designing health and fitness products will often require additional consultancy in order to design or re-spec their devices to maintain their desired BOM, power and size envelope. You generally won’t find full-blown ‘Design for Manufacturability’ consultancy or in-house design assistance at this level of distributor.
However, if you can find a distributor with sufficient contacts in both the franchise and open market worlds, a willingness to make introductions, and an open and collaborative approach to its relationships, there is significant potential for them to introduce you to partners with an interest in helping you redesign your health/fitness device.
Filed Under: M2M (machine to machine)
