Huami’s Fireside Chat: Connecting health with technology

Huami (NYSE: HMI), a cloud-based healthcare services provider, held a Fireside Chat conference call with American investors on July 21 to discuss the company’s mission, strategies, products and operational plan. Main speakers included its Chairman and CEO Wang Huang, CFO David Cui, and COO Mike Yeung.

Huang, the CEO kicked off the call by sharing the company’s mission and vision of “connecting health with technology.” The company will continue to realize this primarily through its smart wearable products, which are able to collect personalized data that is used to improve healthcare services including health monitoring, diagnosis and treatment. However, Huang outlined several key challenges that the wearables industry has yet to overcome, such as quality of data collection, validity and accuracy of data analysis, and users’ adoption rates of monitoring technology and long-term engagement.

“Huami’s mission is to address many of these challenges with its growing products and services portfolio, to achieve our vision objective of improving health through the application of technology,” he said.

AI chip and data quality

During the call, Huang explained that the company has been working to address these issues, including by improving the quality of data collected from smart wearable devices. In June, Huami announced the second generation of the Huangshan AI chip, one of the core technologies powering Huami’s wearable products. The Huangshan-2 chip features significant improvements in power savings, data collection and analysis accuracy. It is reported that Huangshan-2 detects atrial fibrillation 7 times faster than Huangshan-1 and 26 times faster than competing chips. Moreover, Huami wearable’s detection of atrial fibrillation is far more accurate, identifying cases at a rate of 93.27%, according to a study done by Peking University First Hospital last year.

Along with the launch of Huangshan-2 AI chip, Huami also rolled out the BioTracker™ 2 sensor, a bio-tracking optical sensor based on PPG technology that collects biological data 24/7. The new sensor supports five of the latest biological data engines: RealBeatsTM, OxygenBeatsTM, SomnusCareTM, ExerSenseMT and huami-PAI™. RealBeatsTM sensor monitors wearer’s cardiovascular health by keeping track of their heart rate, while OxygenBeatsTM measures respiratory levels and blood oxygen saturation. SomnusCareTM data engine keeps track of the wearer’s sleep data and is able to identify whether they suffer from sleep apnea, a common danger during sleep. ExerSenseTM and huami-PAI™ are useful during fitness activities, automatically identifying the type of exercise appropriate for the wearer and setting reasonable fitness targets.

Huang said that to improve the company’s innovation in wearable technology and healthcare big data, it opened the Huami AI Research Institute, and is also in the process of partnering with Professor Ramesh Jain, a well-regarded AI scientist from the University of California, Irvine. The Institute has already launched three joint labs with leading Chinese universities to develop smart wrist wearables, improve data analysis on fitness, and study brain-computer intelligence. By expanding its AI research capabilities, Huami is able to secure its data credibility and further develop its technological capacity, enabling it to upgrade and launch its products more efficiently.

Huami also began PAI Health’s partnership with Prudential Corporation Asia.  It reflects the value of PAI’s algorithm (Personal Activity Intelligence), and is a great example of the kinds of business relationships we are beginning to build. 

In June, PAI Health published new clinical proof of the value of its unique heart health algorithm based on a 15-year longitudinal study of 56,000 people in Dallas.  The PAI metric provides actionable intelligence to consumers and clinicians which can result in improved heart health and longevity.  Continuing to operate under its own identity, PAI Health is working to establish relationships with insurers and clinicians to leverage this intelligence to improve member health.  


Consumer adoption and long-term engagement

Huami has a clear view on its product positioning and target groups. Huang said that consumers always look for new features and leading-edge technologies or products that are perceived as good value. He believes Huami may be “the industry’s leading driver of value for the dollar,” as the company develops its own Amazfit brand and continues the partnership with Xiaomi as the developer and manufacturer of its Mi-Band products.

“The strong value proposition of all our products is a factor in any market we enter,” COO Mike Yeung commented at the conference call.

With innovative technologies such as the AI chip and bio-tracker sensor, Huami’s smart wearable products offer strong values at reasonable price points. Take the Amazfit T-Rex as an example. The smartwatch is now hitting the market in the U.S., which features 12 military-spec certifications, both GPS and GLONASS, 5 atmosphere water resistance, and a 20-day battery life, all while priced at USD139.99. Xiaomi’s latest Mi-band 5, designed and manufactured by Huami, is about to hit the market in Asia and Europe, priced at about USD45.

Huami continues to upgrade the Amazfit series and roll out new smart products. Their most advanced product yet, Amazfit X, is scheduled for launch this fall, and features a 92 degree dramatically curved display with buttonless operation. At CES in Las Vegas in January, new products unveiled by Huami include the Amazfit Home Studio, a smart gym hub; Amazfit AirRun, a foldable treadmill; and two new hearables, Amazfit PowerBuds and ZenBuds. Amazfit PowerBuds was awarded “the Best TWS Fitness Earphones” from IDG.

Leading the global market

Leading the industry of fitness tech and wearables, Huami ranked top 5 in both global watch shipment and market share in the first quarter of 2020, according to IDC. With a year-on-year growth of 80.2%, Huami outperformed the overall growth rate of the adult watch market. In addition, Huami Amazfit ranked No. 1 by shipments in Spain, Indonesia and India. Huang said that the 42.3 million units of Amazfit, Xiaomi and Timex products they shipped last year accounted for 26% of the global market, generating USD835 M in revenue in 2019 and USD1.29 M in fully diluted GAAP earnings per ADS.

Huami managed healthy growth due to its “lesser reliance on markets in China and further expansion into the United States, Europe, and other parts of Asia,” according to IDC. Yeung, the COO, mentioned that 2020 may be a year of “reaching critical mass and accelerating [their] business” in the U.S. market. Huami has been expanding distribution channels and launching new products in America, with Amazfit products now available online through Best Buy, Amazon and several other specialty online retailers, as well as through the Amazfit website. Mike Yeung also announced that their products will be expected to be available in Walmart stores in the U.S. by September.

Operational updates

Huami’s lab with Dr. Zhong Nanshan’s team (In the centre: Huami’s CEO Wang Huang and Dr. Zhong Nanshan)

Huami has continued the resiliency of its first quarter revenue growth into the 2nd quarter, despite the impacts of the Covid-19 pandemic, CFO David Cui said in response to an investor question during the call. Nevertheless, Cui said that the company is raising their guidance for Q2 2020 revenue from RMB1.1 B to RMB1.14 B (USD 155 M to USD160 M), based in part on its strong operational cash flow, which allows it to withstand the impact of the pandemic.

More importantly, Huami expended lots of energy ensuring their products could help the public cope with COVID-19, focusing on the role of wearable devices to improve public health management. The company has been doing research analyzing biometrics and proposed AI models to predict the spread of COVID-19. With smart wearable devices, Huami aims to update their ability to monitor an individual’s biometrics to detect signs of COVID-19, such as flu-like symptoms. On July 15, Huami established a lab with Dr. Zhong Nanshan’s team to use data from wearable devices to follow-up with rehabilitated COVID-19 patients in China.

(Photos from Huami)

Simin Li
Simin Li

Simin writes for us, by focusing on tech and financing news in Asia. She’s also interested in politics, cyber culture, and new media. She has experiences contributing to Reuters and the Wall Street Journal Chinese Edition. She is studying English Language and Literature at Renmin University of China.

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