CardieX enters joint venture with largest Google wearable platform partner in China
Digital health technology company CardieX (ASX: CDX) has struck a multi-year deal with Mobvoi Information Technology – currently Google’s official operating partner in China – for the development of smart-wearable solutions for Google’s Wear OS platform.
CardieX said the agreement will be conducted as part of three distinct phases that will see the two companies collaborating to develop products for sale in China and the US.
According to CardieX chief executive officer Craig Cooper, the deal represents the “tip of the spear” as the company transitions from a pure device-based medical technology business to a multi-platform global health technology company.
“The importance of this transaction for the CardieX Group also lies in the fact that we are now part of the Google ecosystem in the world’s largest market with a side-by-side development partnership with some of the best and smartest engineers and technologists in the world,” said Mr Cooper.
Joint development agreement
Today’s agreement allows CardieX to co-develop consumer wearable applications in tandem with Mobvoi, one of the fastest-growing AI and consumer electronics companies in China.
The company currently has a series of major investors backing it including Google, Volkswagen, ZhenFund and Sequoia Capital.
The high-profile partnership represents a major and material validation of CardieX technology as well as its strategy to transition from a pure medical device business to a multi-platform provider of consumer and medical device and software-based solutions based on CardieX’s patented software algorithms.
According to the terms of the deal, CardieX will become Mobvoi’s “exclusive development partner” in developing applications and features related to “smart heart health” and related functions that can be derived specifically from CardieX’s unique algorithms.
All development activities and commercial execution of the agreement will be undertaken by CardieX’s wholly-owned subsidiary ATCOR Medical and will be based on ATCOR’s “SphygmoCor” cardiovascular and hypertension algorithms and patents.
According to CardieX, the planned co-development activities will combine the algorithms and software of CardieX’s subsidiary ATCOR and Mobvoi’s sensor technology into a unique and market-leading wearable consumer health platform on Google’s Wear OS platform.
Furthermore, ATCOR will be responsible for developing a set of algorithms specific for implementation in Mobvoi smartwatches and for developing the accompanying apps on the smartwatch and smartphone that form the ‘smart heart health’ ecosystem.
Meanwhile, the agreement stipulates that Mobvoi will be responsible for creating a next-generation smartwatch to integrate algorithms specifically designed for Mobvoi by ATCOR.
Importantly for Cardiex, the agreement provides it with access and integration to the “Wear OS” global operating and software partner network, and thereby, positions the company as the “Intel Inside” for a significant wearable device ecosystem.
“Development activities under the agreement will be synergistic for CardieX across a global ecosystem of Google partners allowing for further product integration with other global Wear OS wearable partners in the Google network,” the company said.
From development to commerciality
Cardiex declared that the eventual commercial objective is for Mobvoi to sell their new smartwatches and to be “powered by ATCOR” into their existing e-commerce and physical retail channels, thereby establishing a worldwide installed base of CardieX/ATCOR apps for smartwatches and smartphones.
Longer-term, the creation of a CardieX smartphone app is expected to form the foundation for connectivity with other CardieX/ATCOR devices in the future, such as CardieX brand home use blood pressure monitors (BPM’s) and other BPMs that are powered by ATCOR.
The app could also underpin other CardieX wearable devices that leverage the existing partnership with Blumio.
“Put simply, once we have developed the app under the joint development agreement, then as long as we can get a signal to that app from any connected device, we will be able to provide a similar digital platform for that device,” Mr Cooper said.
With respect to commercial details, the business model, revenues, and commercialisation strategy under the agreement – they will all be driven by a combination of licensing, royalty, and subscription services which CardieX expects to be revenue accretive in the 2021 financial year.
CardieX also confirmed that further revenues will be driven by the universal application and monetisation of the development activities under the agreement to CardieX’s other partnerships.
All app and software development will be available on a white-label basis across the Wear OS global ecosystem to a significant base of other potential partners.
“The joint development with CardieX’s algorithms and Mobvoi’s sensor creates the possibility for differentiation of our future wearable products, which is very exciting. We’re very much looking forward to seeing the outcome from both sides,” said Mike Lei, co-founder and chief technology officer of Mobvoi.
The joint development agreement announced this morning had an immediate impact on the CardieX share price, boosting it by over 37% to $0.033 per share.