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Imoo leads the Global Kids' Smartwatch Market With 26% Market Share

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

April 7th, 2020

China dominates kids’ smartwatch market with 62% of global shipments in 2019.

Cellular connectivity included in 71% of global Kids Smartwatch shipments in 2019 driven by 4G connectivity

Global kids’ smartwatch shipments grew 8% year-on-year (YoY) in 2019, according to the latest research from Counterpoint’s IoT service.

Commenting on the competitive landscape in the market, Counterpoint Research Analyst, Satyajit Sinha, noted, “China continues to dominate the global market for kids’ smartwatches accounting for more than three out of every five devices sold. It’s also Chinese brands such as Imoo and Huawei that lead in terms of vendor market share. These Chinese brands have further expanded to Southeast Asian countries like Indonesia, Thailand, and Malaysia. As a result of which the Asia Pacific region excluding China and India is the second-largest, with 11% of the global shipments.”

Mr Sinha added further, “Operators also consider this segment attractive; there are significant net additions by operators like China Mobile, Vodafone, Verizon, AIS Thailand and Maxis in Malaysia. All have added kids’ smartwatches to their portfolios to boost new connections and additional revenue streams.”

Exhibit: Global Kids Smartwatch Shipment by Brand Market Share in 2018 vs 2019

Source: Global Smartwatch Shipment by Model Tracker 2019

Commenting on kids’ smartwatch application, Counterpoint Senior Analyst, Ethan Qi, added, “Smartphones remain the best way to communicate. However, providing an expensive smartphone to a child is risky. The kids’ smartwatches are not only a communication device but also report a child’s location together with a history of movements. 71% of kids’ smartwatches shipped in 2019 were cellular. Hence, apart from calling, features like an SOS button for emergency communication, geofencing with SMS alerts on entry/exit, and the ability to hear what is happening next to the child, are possible. Among the cellular kids’ watches, 65% were 4G based, which opens the potential for video calling, educational interactive and other games.”

Mr Qi further added, “Privacy and security are major challenges for the kids’ watch market. A few countries in Europe have been scrutinizing kids’ smartwatches with tracking features (GPS) due to security concerns. This is especially the case in the new GDPR environment. So, robust security and user experience will be key to success for this segment.”

The comprehensive and in-depth report on “ Global Smartwatch by Model Quarterly Tracker Q1 2018- Q4 2019 is a part of our IoT service. This report is available for download here.

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Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Satyajit Sinha

Ethan Qi

Neil Shah

Counterpoint Research
press(at)counterpointresearch.com

Key Takeaways from the 2019 Latin American Telecommunications Congress

The 2019 edition of the Congresso Latinoamericano de Telecomunicaciones (CLT), the annual Latin American forum on public policy for information and communication technology (ICT) was held in Cordoba, Argentina recently. The four-day event saw the attendance of most of the important regulators, including Ajit Pai, the chairman of the US’ Federal Communications Commission (FCC). Counterpoint Research also attended the event.

Deliberations mainly centered around four key issues that will have an impact on the future of the telecom landscape in the region over the coming years – the need to have more efficient and effective spectrum management and auctions, connecting the disconnected, regulations, as well as security, privacy, and data protection. Below are the key takeaways of the deliberations at the event.

Spectrum Management and Auction (4G-IoT-5G)

The incoming 5G technology will need much more spectrum than any of the previous generations. But before getting to 5G, efficient and effective sprectrum management and auction needs to start right now with 4G and IoT, as LATAM lags in the rollout of 4G and has not yet started the meaningful rollout of cellular-IoT.

There are delays in 4G spectrum auction in many countries, and several operators are still waiting for spectrum to increase their network coverage. The introduction of 5G will require even more spectrum to cover the low, mid, and high bands. Concrete action is required to ensure that LATAM countries do not fall behind in obtaining the spectrum required for IoT and 5G. So far, Brazil, Colombia, and Mexico have announced their intention to auction 5G spectrum.

Exhibit 1: LATAM 5G Spectrum Adoption Announced

Source: ANATEL, ANA, IFT

Discussions at the 2019 CLT was on whether spectrum auction should be a tradeoff between cash or service. Some countries treat spectrum as a cash cow and believe auctions will bring much-needed funds to government coffers. Others, such as Chile, understand that it will be more efficient if the distribution of spectrum requires the operator to compete in tenders instead of paying a fixed fee. This methods sets targets for the operator for network rollout to increase coverage as well as supply of access devices.

Connecting the Disconnected

There are around 100 million people in LATAM that still don’t have access to the internet and an additional 80 million that don’t have adequate access to the internet. According to regulators, associations, like ASIET (Inter-American Association of Telecommunications Companies) and many private companies acknowledge that access to the internet will provide economic benefit. However, there is still not an adequate understanding of the digital divide.

The gap is not due to a lack of supply. Some form of internet, wired or wireless, covers almost 85% of LATAM population. But only 55% is connected. The problem lies in the lack of the ability of the population to pay for the service.

Most LATAM regulators have a budget to decrease the access gap. There is an El Servicio Universal (Universal Access) fund in most LATAM countries. However, these funds are highly underutilized. The main problem is regulatory as the public sector does not know how or where to deploy the money. Further, the public sector is slow to formulate any type of regulation, and as a result, not much gets done. LATAM regulators know that they need to speed up ideation and implementation.

In Brazil, for example, the telecom regulator Anatel is working on driving “Gobierno Digital” to attract more investment and connect the 30% of the population that does not have internet access. Brazil has set a target to bring down the percentage of the population without internet access to 10% in 2025. Another example is Colombia, which is sitting on almost US$90 million for providing internet access. While the government gets the interest from the fund, current laws prevent the regulator from doing much about putting to use the fund for increasing internet access.

Regulations

There is a need for new and updated policies, that would not only regulate current telecom operators but would also include other players in today’s communication ecosystem. Companies such as Facebook, one of the sponsors of this event, are as incumbent as a traditional operator. Therefore, LATAM countries need a more modern, flexible, and convergent regulation.

The other issue is multiple regulators. Currently, most countries have more than one regulatory entity in charge of all regulatory process. Further, each municipal area has its own rules. This makes the network rollout a hideous bureaucratic burden for the operator. There is a need for unifying regulatory entities within a country to align the national, provincial, and municipal processes. Recently in Argentina, a judge ruled that a municipal body cannot overrule the national order allowing the building of antennas. This was a good precedent and other countries, such as Colombia and Brazil, agree with the need to bring in such practices into their countries.

Privacy

Security and privacy are necessary across all verticals. This issue came up as IoT is still in its infancy in LATAM, and 5G might take few years before it enters LATAM. There is a lot to do about it as security and privacy are key for IoT and 5G success. Many regulators already acknowledge that this is an important issue and are taking the companies and industry associations.

Besides the four major issues, the event also saw discussions around harmonization of the network to make roaming easier across LATAM. Many LATAM countries are in favor of slowly working on removing roaming charges. This would require even more harmonization in the frequency used. Further, interesting deliberations also took place on the need to close the gender gap in terms of access to appropriate technology as well as encouraging girls in Science Tech and Mathematics (STEM) careers. While there is a necessity to connect those at the bottom, it is equally important to bridge the gender gap when it comes to internet access.

The theme of the 2019 CLT was ‘Accelerating the Digital Transformation of Latin America’. To achieve this, LATAM needs to learn from its past mistakes. Most LATAM countries have enough experience to understand that they not only need to work together, but also with the technology leaders to accelerate digital transformation in the region.

Top 10 IoT Security and Privacy Trends and Predictions for 2019

2018 was the year of realisation for all players in the IoT ecosystem, including consumers, that security cannot be neglected. This is especially the case for devices that gather and store personal data. Both data security and data privacy will take center stage in 2019. After GDPR, we expect the US will also introduce unified regulations to protect citizens’ data. India is also introducing similar legislation in its IDPR.

Advanced IoT security tools such as Blockchain and AI are capable of securing data at rest and data in flow respectively. However, 2019 will see a slow transition from traditional to advanced IoT security tools with a niche adoption rate.

We expect a significant increase in overall investment and capital expenses in IoT security industry towards securing IoT products, platforms, the cloud, and services.

The following are the top 10 trends and prediction of 2019 :

Threat Escalation in 2019

Collaboration and more partnership among hackers and cybercriminals: Hackers have been categorized into different groups such as traditional hackers, ideological hackers, state-sponsored attackers and hackers-for-hire. Going forward we expect these groups will start to overlap and eventually collaborate for ease of operation. Furthermore, we also expect to see some strategic alliances among these groups of hackers which will take advantage of each other’s products and services.
Attack-as-a-service (AaaS): Malware-as-a-service and Ransomware-as-a-service are not new concepts. Their adoption was very niche but highly successful. In 2019, we are expecting malware, specifically ransomware, to increasingly use the remote desktop protocol as an entry point for infection. Furthermore, hackers may create and sell pre-attack packages of malware, exploits, botnets, and other services, which will give cybercriminals the option to choose various off-the-shelf products. Irrespective of cybercriminal experience, they can easily launch attacks with these pre-attack packages.
ML as the next weapon: In the past few years, we have seen malware using evasion techniques to bypass machine learning engines. One of the recent examples from 2018 was Plucky ransomware that used InnoSetup to package the malware and avoid machine learning detection. Hence, bypassing the machine learning is already on the criminal to-do list. By the end of 2019, we expect hackers to leverage advanced machine learning tools to automate target selection by exploring and exploiting the vulnerabilities to find less secure systems.
Data theft is the new cash-cow for Hackers: 2018 had landmark examples for the biggest data breach in the history of mankind, such as Facebook (87+ Million), MyHeritage (92 Million), Under Armour (150 Million), and allegedly 1.1 Billon records from Aadhaar Program (India’s unique identity mission project). In the past few years, both the digital transformation and IoT has pushed more corporate and personal data to the cloud. In 2019, we expect a significant increase in data breaches, especially at the cloud level.
Smart home devices and edge devices will be more vulnerable to attack in 2019: Smart home devices are easy targets to attack and deploy ransomware as they record and store personal data and are, generally, less well protected. Furthermore, edge devices are equipped with limited resources, mostly running on elementary operating systems. Hence, these IoT edge devices are unable to provide any self-defence features, such as the creation of a secure zone to protect stored data and embedded software. Edge devices were found to be vulnerable to sync attacks, false data injection, passive attacks, and malicious nodes.

Security Solution to Secure IoT Ecosystem in 2019

Collaboration and more partnerships among cybersecurity solution providers: Cyber Threat Alliance is one of the best examples of these collaborations that formed to improve the cybersecurity of the global digital ecosystem. These collaborations bring unique resources that bundle the talents and skills of IoT security companies to bring their best solutions together to create more concerted offerings that can not only fight back against malware and botnets but even learn and evolve.
Multi-factor authentication and device identity intelligence: Identity is a fundamental component in securing IoT. Secure identification between the device and human or vice versa was one of the past hurdles. Securing identity between device-to-device interactions and avoiding malicious duplicity is the key to securing IoT in 2019. The identity model has shifted from user-centric in traditional IT systems to machine-centric for IoT systems. Furthermore, multifactor authentication and identity intelligence by complementing each other will become the preferred methods to provide IoT security in 2019.
ML as Shield: In the last year, the adoption of machine learning in IoT security has increased significantly. Currently, machine learning solutions are often used to monitor activity and act if unusual behaviors are detected. Moreover, machine learning will not only process and analyse data much quicker than traditional tools but also will provide predictive analysis of threats and attacks. This means that breach detection times can be reduced significantly, minimizing the potential disruption. It also means that the information security team can prioritize work more effectively. However, the scope for AI will go beyond monitoring user activity on the system. AI as an IoT security tool will not reach its full potential in 2019, but its use will accelerate.

Chip to cloud, security embedded in hardware: We have already seen the adoption of IoT hardware security features such as a hardware security modules (HSM), Physical Unclonable Function (PUF) and TPM 2.0 (Trusted Platform Module). However, embedding security at the MCU-level to create a secure zone that can extend from the chip to the cloud level by integrating players from both ends of the IoT value chain was one of the most promising solutions. Security at the MCU-level will help solve cloning and counterfeit issues and will also establish secure authentication along with a unique identity. Semiconductor players like Microchip, NXP, Renesas, Cypress, STMicroelectronics, and Texas Instrument have already launched different versions of this product type.
Increasing demand for security personnel in governments and private sector: GDPR ensured that all organizations directly or indirectly involved with data management concerning EU citizens are obliged to comply with the regulations, irrespective of where they are based. This has created a ripple effect of demand for skilled security personnel among both government and private sector which, in turn, has resulted in increased organizational budgeting for staff and training on data protection. We expect this trend to multiply in 2019.

GDPR: Restoring Faith in Data Privacy

Data protection is a hot topic, especially after the Facebook and Equifax debacles. However, it has always been the subject of serious attention by enterprise security executives and compliance officers.

The Facebook and Cambridge Analytica scandal is a good example of the consequences of mis-utilisation of data and also reminds us of the need for strong data regulation laws rather than self-regulation or guidelines. The dilemma of government control vs. private control on public data has always been a matter of debate and will continue to be so. However, GDPR will bring a multitude of checks and a control on organisations who are responsible for holding public data.

GDPR (General Data Protection Regulation) will play a crucial role for both the organisation and consumer by helping restore the faith lost in organisations that use personal data. It means implementing strict rules for organisations and backs this up with potentially serious consequences in cases of noncompliance and violation. GDPR compliance demands more than basic data-loss prevention or just post-data-loss reporting. It also demands that organisations set pre-defined protocols and precautionary measures to prevent data-loss in the first place. It also advises organisations on using predictive tools to anticipate attacks and take appropriate action against the exploitation of potential vulnerabilities.

GDPR enforcement: When and on Whom?

Starting 25th May 2018, GDPR will be enforced on all organisations who have offices operating in the European Union (EU), do business in countries in the EU, even if based elsewhere, or firms that are directly or indirectly involved with data management concerning EU citizens. Basically, all organisations that are involved in processing, storing, or transmitting personal data of EU citizens will be obliged to comply with GDPR irrespective of where they are based.
In addition, this regulation replaces Data Protection Directive 95/46/EC and adds various clauses, checkpoints which are far stricter than earlier Data Protection Directives.
It also broadens the definition of data protection and the type of data that is regulated to include genetic, medical, economic, cultural, and social data.
GDPR will evaluate data protection and the overall level of security to determine whether the organisation is covered by the GDPR regulation.

Key GDPR challenges

Key challenges with the new GDPR regulations:

Under GDPR, regulations are complex, with close to 500 requirements that will affect governance and cyber-security.
It is mandatory for organisations to notify authorities within 72 hours of becoming aware of any breach. This demands better data breach detection and fast response capabilities. However, many organisations are currently struggling to identify and investigate data breaches within the given time frame, which leads to visibility gaps that delay investigations. Also, non-standardised processes and lack of efficient analytics to detect anomalies further impact the time frame.
Implementation of GDPR must start from the initial development stage of applications. It will be mandatory for all developers to add an extra layer, to test for vulnerabilities, as application vulnerabilities could lead to accidental or unintentional data loss. Application developers need to reconsider risk and privacy during the design process, and security professionals need to find better ways to protect applications in use today.
Violations enforced by GDPR across 28 different EU countries will be up to €20 million or 4 percent of the company’s worldwide annual revenue, whichever is greater. Hence, small-scale companies will face concerns on potential fines in case of violations. In addition, penalties have been discussed separately in the GDPR, which also include:
1. Penalties for noncompliance of customer consent clause.
2. Penalties for noncompliance of maintenance of records.
3. Penalties also apply to both controllers¹ and processors². Hence, cloud providers are not exempt as they can be data processors.
The adoption of these regulations will not only increase the overall data management and cloud services costs to organisation, but can also increase things like the IoT services cost per device, which, up until this point, have been relatively low. Chinese global players especially will need to ensure IoT modules are embedded with keys (hardware security) to ensure authentication and strong cloud security.

Consumer Consent: A lawsuit against Vizio for snooping on users’ viewing habits and settled only for $2.2 Million. However, under GDPR penalties and implications of such scenarios will be far higher.

Starting in 2014, Vizio made TVs that automatically tracked what consumers were watching and transmitted that data back to its servers. Vizio went one step ahead and retrofitted older models by installing its tracking software remotely. All of this, the FTC and AG allege, was done without informing consumers or getting their consent.
Vizio collected a selection of pixels on the screen that it matched to a database of TV, movie, and commercial content. Vizio also identified viewing data from cable or broadband service providers, set-top boxes, streaming devices, DVD players, and over-the-air broadcasts which contributed to as many as 100 billion data points each day from millions of TVs.
Vizio sold the consumers’ viewing histories to advertisers and personal viewing habits to content providers. The company even provided consumers’ IP addresses to data aggregators, who then matched the address with an individual consumer or household. Vizio’s contracts with third parties prohibited the re-identification of consumers and households by name but allowed a host of other personal details – for example, sex, age, income, marital status, household size, education, and home-ownership. Vizio allowed these companies to track and target its consumers across devices.
Vizio had to pay $2.2 million to settle a lawsuit, which alleged that the company was secretly collecting user data and selling it to third parties.
Were this case to have been in the EU and under GDPR, the penalties would have been more severe.

Source: Federal Trade Commission v. Vizio Inc. (No. 2:17-cv-00758) 2017

What does GDPR bring to the table?

IoT applications and solutions will generate huge data, some of which can be personal data. The sustainable growth of the IoT ecosystem will depend on securing this data. The implementation of GDPR will play a crucial role in the smooth growth of the IoT ecosystem.
GDPR is changing the level of awareness on customer data protection and increasing accountability on collecting customer data. As well, boosting confidence within the consumer community and reputation of the organisation.
Standardisation of security policies with a strictness on data protection practices that will lead to organisations’ preparedness with requirements and preparation for core-business plans. However, the major goal of GDPR is not only to provide “ready to use” guidelines for the organisation, but also keep day to day checks on the organisation to ensure that they opt for notification of data loss over the good press.
The race of digitalization has already pushed many organisations to adopt cloud-based data management. However, most of this data is stored either without encryption or lack of multi-factor authentication to access cloud services. However, after the GDPR implementation, all these organisations will be accountable, not only in case of loss of data, but on protocols and methodology of data protection.
GDPR will not only develop a governance framework for the program and assist with technology implementation activities, but it will also become a marketing and advertising buzzword for cyber-security solution providers.

Outlook:

Data use has the power to potentially change the viewpoint of a nation and influence personal choices that go beyond the concern of privacy. Going forward, data will be among the most valuable assets and its protection will be mandatory. The rate of attacks for data acquisition will always tend to increase. However, regulations like GDPR ensure that organisations will pay attention to security. Together with GDPR and other compliance regulations, governments and industry authorities, such as the National Institute of Standards and Technology (NIST), are stepping up to enforce privacy, safety and security regulations on IoT manufacturers. Moreover, the enforcement of GDPR has already created a ripple effect across the world, for example, China’s Personal Information Security Specification has already been implemented from 1st May 2018 and the formulation of India’s Data Protection regulation law is already in motion.

The industry is analysing advantages and disadvantages of GDPR. However, we believe it will push organisations to add an extra level of security, which some considered an unnecessary expense. The major changes in terms of organisational budgeting of data security and staff training on data protection will be mandatory. Overall, GDPR will keep organisations on their toes – the potential costs of getting it wrong have just become much greater.

1 Controller means the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law.

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Insights Tag： Data Privacy

Imoo leads the Global Kids' Smartwatch Market With 26% Market Share

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Key Takeaways from the 2019 Latin American Telecommunications Congress