Medtronic plc (MDT) Earnings Call Transcript & Summary

We have a moderator that will be reviewing the questions and if it's relevant during the session, we will do our best to intermingle it. If not, we will be pushing those questions to the end. I just want to thank everybody for joining us from United States, good morning; from Europe and Asia, good evening, good afternoon. We're going to get started in just a minute. We've got an excellent panel of experts here today to talk about augmented reality, smart glasses in health care and enterprise. And we're going to get started in just a minute. All right. So we'll get started here with introductions quickly. Just a reminder, there is a Q&A feature. It looks like a little chat message. You can enter a specific question there. During our webinar fireside chat, we do have a list of prepared questions, and we will do our best to intermingle specific questions that are relevant to the topic during the discussion. [Operator Instructions] If there's something that we can answer and it requires follow-up, we will do our best to reply to those afterwards. So as you can see from the screen, our panel today consists of members from TeamViewer, Medtronic and Vuzix. So we have -- from TeamViewer, we have Jan Junker, who's the Executive Vice President of Solutions Delivery. Also with Jan is Lennard Buning, who's Director of Customer Success. From TeamViewer, we have Dr. Tim Wootton, who's Senior Training and Education Specialist. With him is Paul Coenen, Senior Business Analyst of IT Innovation. From Vuzix, we have Paul Travers, President and CEO. And then I am Matt Margolis, I head our business development here at Vuzix. With that said, I'm going to pass the baton over to Paul. He's going to give a quick introduction of Vuzix for those of you that may not be familiar with us. And then Paul will pass the baton over to Jan, who will give an overview of TeamViewer. And then after that, we will move into the fireside chat. [Operator Instructions] Paul, I'll pass it over to you.

Thanks for that introduction, Matt. Well done. So yes, Solving Post-Pandemic Challenges with Enterprise AR. I'm Paul Travers, as Matt said, the CEO of Vuzix. So let me give you a little bit of background about Vuzix. Vuzix is headquartered here in Rochester, New York. We have offices in the U.K., Japan. Basically, we do business around the world today. Augmented reality, smart glasses, it's the future of computing, and as such, the world is realizing that and companies like ourselves and TeamViewer are leading the way on the software and hardware formats. And partners, like Medtronic, are utilizing our technology on a daily basis now today. So again, we're at of Rochester, New York. We make smart glasses. We consider the device as the future of connected workers in a lot of different spaces. Medical is -- it's one of the fastest-growing ones right now. COVID, I think, can be probably pointed out for a lot of that. But telemedicine, field service, remote support applications, warehousing and logistics, construction, manufacturing, basically, almost every facet of where people use computers today, smart glasses are going to be used in the future, literally throughout enterprise. And then ultimately, it's going to move into the mass market. Vuzix believes that this technology is really the future of computing. Currently, we have a line of smart glasses to enter the marketplace with. Our M400 is our flagship. It's a 8-core processor from Qualcomm. It's got 4K image stabilized cameras built into the glasses. It's got this beautiful little OLED viewer. So when you look inside of this thing, it's crisp, clean, easy to see and read. And with this little lightweight, 2.8-ounce device, when you wear it, it allows you to share and/or get helped in real time with connected information and/or folks that are seeing what you're doing to kind of zoom in and understand what's going on around you. Let's share more about that as part of the talk, I'm sure. The M4000 right next to it, you can see it's got a window that you look through as opposed to an occluded eyepiece. With that got right there, you look at imagery floats out in front of you. And then we have a series of products coming, the Blade Upgraded shipping now that look more like conventional glasses, and then ultimately, glasses that will have full spatial computing built in and have a look and feel of a conventional pair of glasses. So Vuzix is really pointed at the future of where this whole technology in the space is going. Jan, do you want to jump in?

Yes. Thanks, Paul. So as said by Matt, my name is Jan. I'm responsible for solution delivery at TeamViewer. I'm going to introduce TeamViewer a bit to you, in case you don't know us in detail. If you could go to the next slide, Paul. So TeamViewer, we have a few numbers here on the left-hand side. We are a company of $460 million billings, so essentially invoices that we sent out in 2020; more than 1,200 employees. We are known from the past, founded in 2005, and we are known for our remote access solution and products, so accessing PCs and computers remotely. However, that is not the only thing we're doing and from which those revenues are coming. We started essentially in 2016 by going more into -- from the IT world going more into the OT world as well, invested significantly into IoT. So meaning not only access -- remote access to PCs, but now also any type of machine, any type of device, TVs. Any type of device that you can think of, you can access remotely with TeamViewer IoT. And in 2018, we moved into augmented reality. We launched our first product, which was called TeamViewer Pilot with more support solution with augmented reality running on phones and smart glasses. And then we got more active -- even more active. Because it was really successful when we launched Pilot, we got more active in that area. And we acquired a company called Ubimax. Actually, Lennard and myself, we are originally from Ubimax. So last year, we, as TeamViewer acquired Ubimax. Ubimax is one of the leaders in augmented reality, a company founded in 2014 and started that journey already back in 2011. I think first time I met Paul actually as being one of the founders of Ubimax was in 2012, so a long time ago. At that time, there were almost no companies in that space. Now it gets more and more crowded. And so TeamViewer acquired Ubimax, one of the leaders globally in augmented reality solutions and products. And then just recently, 2021, we acquired actually one of the main competitors of Ubimax, a company named Upskill, also active in the space of augmented reality since 2011, 2012. All those companies, TeamViewer, Ubimax, Upskill are and have been partners of Vuzix ever since. And all those partnerships have been very close and have only intensified now with those acquisitions. And TeamViewer now being really forming the largest global software player for augmented reality solution, and clearly, in terms of customer coverage, the global market leader on the software side of things with Vuzix, as said, really the primary partner of us at TeamViewer. And what do we offer -- if you go to the next slide, Paul, what do we offer? It's really a software solution that runs -- that supports frontline workers. Any type of frontline workers in any industry or health care industry, manufacturing, automotive and so on and forth, supports those workers to fulfill their real-world tasks. And we do that by providing them digital information via, in most cases, smart glasses, especially smart glasses like the Vuzix M400, Vuzix Blades and the likes, allowing those workers to have their hands-free while they do their shop and still get the information in their field of view what they should do. And that can be workflow-based digital information, but it can also be remote support calls, group calls, essentially human-to-human calls, so a remote support person supporting a worker on site. I think we will learn a bit more about that in our fireside chat. And with that, handing over back to you, Matt.

Thanks, Jan. No, I mean, I've been following this space now for 6, 7 years, and it's great to see Ubimax, the story everybody kind of growing up and the acquisition by TeamViewer and everybody kind of working together. I think, for me, what's impressive is the ecosystem. Everything is kind of coming together, the hardware, the new generations and just being able to support almost any company in any industry. And with us today, one of the customers that we're supporting here together is Medtronic. So excited to have Tim and Paul join us from Medtronic who can talk about and share some of the work we're doing together there. So without further ado, Tim and Paul, can you kind of give everybody a quick overview of Medtronic and the area that you guys support today?

Yes. More than happy. Thanks for inviting us and having us on the call today. So Medtronic is really one of the leading -- or the leading medical device company in the world. And we started off in cardiovascular some time ago with our founder, Earl Bakken, creating the first portable pacemaker. And since then, the company sort of evolved and expanded well into a lot of other health care spaces. So I, myself, I work in training education in the spinal robotics part of the business. And Paul, do you want to...

Yes. Sure. So also from my side, thanks a lot guys for inviting us. I'm really looking forward to this chat and talk about all the things we did in the past, already more than a year actually, where we've been working on this stuff. My name is Paul. I'm working from Medtronic EMEA, actually in the IT department. So I'm responsible for Europe, Middle East and Africa, together with the whole IT department, of course. And in that regard, I'm helping them basically adopt and implement the technology and the software solutions, which we are discussing today with a lot of exciting challenges as well with that. So they will definitely come to the topic today, I think.

So Paul and Tim, we're going to continue with Medtronic here. So how has the industry evolved over the last few years in terms of adopting new technology? I know if I look in the OR and how things change, it's rapid. But there's a lot of things that take into account patient safety and the surgeon's time. I mean how have you seen things evolved over the last few years?

Yes. I can maybe shed some light on that. So I think -- I mean Medtronic has always been, like Tim already mentioned, leading in the health care technology space. So we've always been active in pioneering new technologies, new therapies for patients all across the world. I think what we're seeing lately is that over the past few years, for sure, is that technologies like, let's say, artificial intelligence but also augmented reality are becoming more and more important as well in health care. And also the whole digital health aspect is definitely growing. And we see also that the market is becoming, let's say, more agile, faster because traditionally, it has been maybe a bit more slow, especially when you talk about the things you were highlighting, right, is about patient safety. A lot of things need to be ticked off before we can release products. But definitely, innovation is accelerating, I think, in health care, and we definitely see that as well as Medtronic. And we're very excited to play a role in that and keep on being -- keep on leading basically in that area, whether that's a medical advice or support around the medical device itself.

So from a public perspective, it's kind of an opportunity to share some of what's going on within the specific smart glasses project at Medtronic. There's been some public posts on LinkedIn and kind of shedding some light. But can you get a little bit more into the details of what the scope is and what you guys are seeing within the project?

Sure. Yes. So I can answer a little bit about that. So just over a year ago, we started looking at how we could implement the smart glasses in an -- in the operating room, in fact, in hospitals as a way to better remotely support colleagues but also surgeons and the surgical teams to provide a better service and a better procedural care for the patients. So we were looking at it for both internal and external use cases, and this was kind of pre-COVID, particularly looking at surgical robotics. But since then, it's obviously almost a year ago, we just -- the demand exploded with the travel restrictions that we faced and the access restrictions as well to hospitals. So with that, we found a wider increasing pool of applications and needs for these kind of technologies, and the demand went up very, very quickly with that. So yes, I mean that's -- we started in remote support and I think that's -- as Paul introduced their kind of background in the field, enabling technology for the field stuff, and we've really just been looking to apply that more in the health care space.

Thanks, Tim. Thanks, Paul. Just one more question for Medtronic, and we'll move over to Vuzix. So you set out with some targets and goals a year ago as far as operational challenges. What were you trying to solve? And have you solved those problems or challenges with the glasses and the software and the full package together?

So I mean the primary I mentioned, we started this pre-COVID. And I think that we'll come on to that a little bit later. But the -- it was really about increasing the breadth and the access to knowledge and expertise, really taking experienced individuals who've been with the company, working in specialties for a long time and being -- giving them a broader reach to be able to consult and work with their colleagues in a more scalable manner. Since then obviously with COVID, we've been looking at sort of, as I mentioned, the travel and access restrictions, and it's been a fantastic tool to help us overcome some of those difficulties. But we've taken that short-term challenge that we faced, and we really feel there's a longer-term opportunity that's been accelerated over the past year that we think we can now really start to leverage this in a bigger way within the company.

Very exciting. So for Vuzix, Paul, I know we can both speak to this, but health care has emerged as a growing industry for us. What is it about the design and specs of the Vuzix M400, in particular, that makes up the best smart glasses choice in the market today?

It seems easy at first, right? You're going to build this little computer and you're going to wear it, and it's going to look at the real world and be connected. And the number of issues regarding industrial design, wearability 8-hour long operation kinds of things, it's a very complex set of problems that deals with a lot of human physiological issues that a lot of companies just don't realize when they build their first, second, third and fourth one. You really have to understand how to get through the day and even wear it with the equipment that has to be worn with Vuzix's glasses. The smart glass itself is only like 2.8 ounces, so it's a nice lightweight little device. But it's also got the ability to be worn anywhere in your vision, high, low. You can adjust the eyepiece to point it at the work surface. Many of our competing products don't allow that. It has an amazing camera on it, which is image-stabilized, which makes for really good broadcast-quality and transmission video. Think about what you're doing here. We have a user, he's got the glasses on. He's working on a table, most likely if you're in the operating theater. And he's got to look down, and he's got to get the glasses to look at the patient and the work area where he's at. Some of our competitors, you'd have to break your neck to get the glasses to point at the work surface that way or it would be an exhausting thing for the doctor. Take that a little bit further, these folks are wearing PPE gear. Sometimes it's like safety glasses that are designed to keep bodily fluids and everything off of them and safe. And at the same time, they've got the prescription glasses on. And at the same time, they've got these eye loops on. And then they got a light that illuminates the surface that they're working on. And somehow you got to get a pair of smart glasses in that mix of stuff and still fitted around all of that stuff to be able to have the operation and continue it. Thinking about that a little bit further. You're doing the operation and you want to zoom in on the work so that somebody else can see what you're doing. Well, that's not a fixed-focus 1x zoom that's like very difficult to see what's going on. You also have to control contrast, brightness. All of these things are built into Vuzix's glasses. And TeamViewer's software allows you to access these things so well: zoom factors; you can turn image stabilization on and off; you can change the contrast, the brightness. So now you have a device. You put it on. You can wear it all day. It has batteries that can last 6 to 8 hours based upon what you're doing. They're hot-swappable. What that means is somebody can do a quick flip of the battery. You don't have to re-log in, you don't have to start over and just continuous operation throughout the entire operating environment that you're in. And you've got this beautiful high-contrast imagery that you can control. So many knobs have to get turned to make this work well, and all of that needs to get built into devices that can be worn in so many different kinds of ways. It's not just medical. But it happens to work really well in medical the way we've designed it, especially some of the mounting options that we have and how great the battery systems work for it.

How long have we been -- how long has Vuzix been making wearable gear? And how much have we learned from the past? And how much of a role does that play in the design of the products of the future in today?

1993, Matt. That's when we came out with our first pair of glasses. So it actually was a virtual reality, head-mounted display. It was another company that I had started that I bought back and started Vuzix with. So we've built all the great, big, bulky, crazy, heavy stuff. And we're big believers in VR, but for these kinds of applications, you've got to be able to work in the real world, and the VR headsets never could be deployed in a real-world operating theater environment for the purposes of the kinds of things that need to get done today. We learned from the beginning that if it's big and bulky, you couldn't wear it. It was uncomfortable. It wouldn't be able to be deployed. And Vuzix is focused on solving those problems. In the early days, the Special Forces guys said, "Can you make Oakley-style sunglasses, lightweight, trim, with computers in them?" And we've been pushing to solve those problems, which is why our stuff is lightweight and, I think, so apropos for the kinds of environments, especially in medical. But this is true from medical to warehousing, to construction sites, to -- you're working, you need access to the work area with your hands, and you can't wear a brick on your head to do that.

No. Those are good points. And I think what's also changed for me, I mean, I've been observing the space for quite some time, but the maturation of not only the hardware, which Vuzix is the part of and the OS and stuff that we support, but also the software. Back in the early days, it was challenging to run even some of the basic software on the glasses. And now today, you have a platform like TeamViewer that's basically vertically agnostic. They can play anywhere in the space. Their software just runs really well in the hardware. So it's great to see that a solution of both hardware and software coming together. So for Jan and Lennard, we're going to pass this over to you. You guys have been involved in the space now for quite some time, been one of the early kind of pioneers in the wearables space and supporting enterprise. So folks are in different parts of their journey. Some are starting out, some are getting ready to roll, others are rolling out. What are some of the challenges in the industry towards adopting AR solutions? And what are some of the lessons learned or advice that you might have for others that you can share here?

Yes. Thanks, Matt. And sure, you can expect some challenges. I mean it's a new type of solution for many of our customers. However, there have never been challenges that we've not been able to overcome. We take a very hands-on approach. We share our experiences with new customers. Typically, we encourage our customers to get a lot of training to the end users and to also include the end users in the project that we take. So end users that have to use it every day, should be part of decisions on how the solution will be configured. And apart from end users, it's also a best practice to have higher-level management involved in the project from the start so that there is this support as you roll out the solution in your organization. And I -- from what I have been able to see, Medtronic has done this very well. And the -- I think the adoption has been very successful. And I think that's been a result of the good cooperation that we had during the implementation.

Yes. I want to add there, too. I think the communication start, I look at my 4 kids in school and they talk about the triangle support. I look at this as no different when you have a customer at the top of that triangle and then you have the hardware and the software partners that have to work together to solve things. Nothing seems easy, but there's always ways to overcome and fix. And I think I can see it from the TeamViewer side, all of the -- little things that come up, I see the team working and fixing. So it's not that the software is just a one and done. There's always iterations and improvements being made to solve those customer problems. So from my standpoint, I see the close integration, the communication between the hardware, the software and the end customer is critical for success. So I'm going to pass this back over to Medtronic team. And as what Lennard pointed out, we talked about the success being some of the buy-in at the high level. How does your organization at Medtronic view the solution in terms of potential impact? And what can you share around that?

Yes. So maybe I can answer that or start up this. And Tim, feel free to add. But I think definitely, what we have been seeing, of course, is that the whole COVID-19 situation has accelerated this interest, for sure. As Tim already mentioned, we started this project already before the COVID-19 hit the world. But when it started, it was relatively small, right? How these projects usually start with within a business unit of Medtronic, definitely not a global aspect yet. But what we saw is that at the moment, these restrictions to hospitals started to become a factor. And the question, can we still support our customers like we are used to during the procedures which they are doing. Now, of course, then interest accelerated within the company. And yes, it's got quite a lot of attention. But having said that, I think what we are seeing now as well is that because of this acceleration, other use cases also come up, right? So people see other people using their technology. They see it working, and they get interested. They start to think about things, how to apply it themselves. And this also then again accelerates innovation, I think, in general, in the company. And that's really interesting to see. And that might not have happened if we would have just kept it within a particular part of the business and a particular use case. And of course, a buy-in is very important, right, because to get the project rolling, and I think we'll also touch upon that later. But we needed to go to various steps, of course, within the company, right, to get support, to get approvals, to get reviews. I think Lennard still has nightmares on the whole review process he needed to go through with the application. So that really helps us all if you have enterprise buy-in, of course, to get the people assigned, to get time assigned to do those reviews.

Yes. I think the buy-in from the high level, I think it's been there. I think Medtronic's leadership, if I can speak for them in this instance, but I think there's that part of the strategy in terms of adoption of new technologies such as this in the longer-term strategy. But yes, as we've said, COVID really has accelerated that adoption and brought it forward quite rapidly and significantly. And then we've done the best we can to be as quick and agile with it as possible in the past year to meet the demand that sort of came out of nowhere.

I'd like to add just a little bit to the whole -- this whole aspect of being able to deploy. 7 years ago, if you guys wanted to try to do what you're doing today, you probably would have had to talk to somebody about a custom piece of software getting written, a proof of concept that might cost $250,000 to $500,000, just to like model and template the application to do it. The wonderful thing about TeamViewer and the Ubimax's frontline portion of what they're supplying in this package is, this is like having an Excel spreadsheet finally for a PC. You put it on and it works. And so it's no longer trying to convince a group of people to have some imagination and think through how it could potentially solve a problem for them. I can't say -- there hasn't -- there's not little tweaks and stuff that happen along the way because, I mean, speaking for TeamViewer, but they're always improving what they're doing. That said, though, right now, it's plug-and-play kinds of stuff. And it's opening up opportunities all over the place because you can just deploy. No longer it's screwing around trying to figure out how to even get the thing installed. So...

And the same can be said for the hardware side. So especially when we talk about the M400. I still remember, Paul, when we called you at one of our first deployments that we need a different mounting and like in 2014, that was. And then you 3D printed it and shipped it, but obviously, that's not what customers expect for production deployment. And I think that's really where the M400 scores highly compared to every other smart glass out there in the market that you really can -- you have so many options how to -- I mean it's very important -- the electronics is one thing, and the M400 is doing a really good job there. But it's also very important how you can wear it on your head essentially. And you -- depending on the ergonomics of your head, depending on the use case, depending on what you really do with it, you need different mounting. Sometimes it's a base cap, sometimes it's a headband, sometimes it's glasses that you better wear. And with the M400, it's really a thing of like 5 seconds to unplug one mounting, plug in a different mounting, and you're ready to go, which allows you, during different shifts and also within a shift, to switch mountings. And that really is a key USP when you deploy it productively to 200, 300, 400 different workers that you have the flexibility with the same device to fit it on everyone's head no matter what the ergonomics are, no matter if a person is wearing glasses or not. So that's really a really significant improvement when we look back 6, 7 years from now to today and the M400.

The whole system seems to be evolving in a positive sense, Jan. And I think that's why it's starting to accelerate as fast as it is, COVID notwithstanding. I mean...

Yes. And that's some of the maturity that we've seen in the industry. It's the ability to plug and play both on the hardware and the software side. I think we learned a lot from the customer base and how they need to wear these things and how things work. And it's great to see the reduction of friction when it comes to the [ fund ] because things just work. There's always a little tweaks and little features that need to be added and things just to optimize. But net-net, it's a plug-and-play solution today, which is super exciting for the space. So another question for Medtronic. I mean I look at the OR and kind of how things operate, there's a hundred different ways to get in there and view and observe. Why wearables? And then I know we've had some success now and we're seeing this, but what were some of the early challenges and stumbling blocks out of the get-go that you had to overcome that you could share?

Yes. So why wearables was an interesting one. At the beginning of the projects, we sort of looked around at a number of different solutions, specifically for this project, but Medtronic is investigating a whole range of different alternatives and different options for remote connectivity and support. So -- but wearables particularly appealed due to the small footprint. We're not -- some solutions require putting a whole device stack in an operating room, which is already cramped and you don't have a lot of space in there. And the other thing I think was a real key is the mobility, being able to walk around the operating room, look at different things from different angles, and you're not limited to a static single point of view and perspective. So all of that, combined with this sort of I-see solution with it being a head-mounted display, it really made for a very appealing solution, I think, to allow the person sitting at the other end of the call providing that remote expertise, being able to see exactly what the person is looking at and see the challenge that they're facing that they're trying to support, there's no -- we weren't able to find a real better solution than the wearables.

And can I ask, how important was the hands-free aspect of it, too? I mean it seemed to me if you're a doctor and you're operating, it's pretty hard to hold the phone up and say, check this out, right?

Yes. So for surgeons -- certainly for surgeons wearing, using these devices, they can't touch them. They have -- they're sterile. They're not allowed to interact with them in a touch manner. So voice control has worked really well. If we talk about not just the surgeons, but if we go to maybe the nurses who aren't sterile, and we're supporting other health care providers and members of the surgical team or support teams in a hospital, they need their hands. Everything that they're doing their normal tasks, they're doing using both hands. You can't be getting them to take a phone out or hold another camera or get that out and point it at something because it's just not a practical approach. So yes, hands-free really sold us on the solution as well.

I have to say that theme echoes through industry, industries all over the place trying to use handhelds and tablets and stuff today. And it's making the job cumbersome for their employees because they've now got to lug around this extra thing, and it's hard to work with their hands. That's the beautiful thing about this next generation of computing device. It's hands-free mounting. You're still connected to everything. User interfaces are challenging and stuff, but that's how the software that Jan and the team at TeamViewer have made. This stuff is just absolutely accessible through a voice interface and no fingers needed.

Exactly. And I think, Matt, your sort of second question was about the challenges to getting the project up and running. I mean the biggest one, working in the health care space, working with digital solutions and trying to work with patient data, the biggest concern is patient privacy. And that was one of the things that we really had at the core, real center of the project from the start. And that was something that we've maintained throughout what we're doing. It's made it very challenging. We've -- Medtronic, we hold ourselves a very high standard to make sure that we're keeping patient privacy at the forefront of what we're doing. And yes, it meant that we kept that at the front of everything that we were working on. I mean the other challenge I would say is probably getting buy-in from the hospital. We're certainly seeing more awareness on wearable devices and sort of this portable head-mounted computing. But it's -- on the adoption curve, it's people, if you're talking about remote cameras and things like that, it's -- their first thought is a phone and a handheld rather than something that they put on their head. So buy-in from the hospital and that change management, that actual going in and changing the mentality and saying, "Here we are with this solution that we want to provide better quality of service for you." There can be an inherent resistance to that because it's something new and it's something unknown. So that's definitely been another challenge, I think, to move towards a different approach, but we're certainly getting there with that. I think what people see the solution and what we can do with it and the benefits that it brings, that really -- it doesn't take a long for them to come around and understand the point of view and the perspective that we're portraying.

Tim, I'm going to go out of order just a little bit, but we're going to continue -- I want to continue on with just something specific. So just walk me through the -- like the installation. Who is your end customer? Are you -- is the Medtronic equipment there and you guys bring the glasses to the room? Or is the -- how does that dynamic work? Who is the end customer? And how does the -- how does this kind of all of these get set up?

So that's a good question. So our end customer is primarily the hospitals and the -- or the health care providers from an external standpoint. Now one of the sort of aspects of the project when we started was actually looking at providing that expertise to our own internal staff. And there's that sort of element of the internal customer as well with the field staff and working with them to make sure that this is a success. I think with the -- getting it set up in the hospital, we've been really leveraging the relationships that we have. Medtronic works and has very strong partnerships with hospitals. So when we've been piloting this technology, we've been working very hard with our partners to make sure that they understand the potential and how to get set up, and we've been supporting them with that. So in the early stages of the project, we've had Medtronic people there setting that up in the OR and assisting the surgeons in doing so to be able to provide that better support.

That's great, and I appreciate the perspective. I know that's kind of a in-the-weeds details, but it's just great to understand how that works. Paul, I know you spoke a little bit about the flexibility of the platform. I mean what are we seeing for Vuzix in health care and overall? I mean what type of use cases have evolved? I know about 1.5 years ago, I spoke at an event in health care and at that point, we had some ideas and some thoughts, and then the pandemic came around. And this space has really exploded from a business opportunity. It's customers like Medtronic and others that are deploying, but where also we -- what use cases are we seeing out there for us?

In -- COVID no doubt, Matt, has driven Vuzix's business in the health care space quite a bit. And I think it's because of the problems of how you get in when you can't even walk in the front door of the hospital because everybody is on lockdown kind of stuff, right? Health care, the obvious ones are this remote support, remote helping, those kinds of things. There's other stuff that's going on, too. There's -- it's a two-way street. In one case, it's -- you got the doctor. He's doing something, and he's trying to teach others how to do that particular thing. So glasses are on. He's maybe doing open-heart surgery. There's a particular aspect of it that's new. And he's got 20 or 30 other doctors viewing it, watching it, learning it, et cetera. The other way around, we work with folks like Doctors Without Borders, where there's an expert who is sitting in San Francisco. And he calls in to a doctor in South Africa that's doing a new kind of surgery that the expert in San Francisco knows how to do. And so what he can do, especially with a software like TeamViewer, literally, he can reach in and draw on the screen. He can share stuff with that doctor that's all the way over in South Africa. It's almost like he's teleported to be sitting right next to -- actually even better in the eye view of the doctor that's doing the operation. So there's training and stuff going on both ways. Then there's folks that are using our glasses now in the operating theater to actually perform full-up operations. Knee surgery is a good example of that. The cameras on the M400 are good enough that they can track external objects and space. We have partners that have these mechanisms that get bolted on to the person's knee before they put the pins in the person's knee. And with the glasses on, literally, they can tell how these things are aligned against the bone structure of the person's knee, get it all aligned right, boom, put the screws in. There's 600,000 knee surgeries a year in the United States alone. Knee surgery, shoulder surgeries, I mean all of this stuff is starting to happen around smart glasses. So it's really low-hanging fruit with the remote help kind of stuff, but it's now being adopted for fundamental kinds of things within a medical environment. And I'm telling you the operating theater kinds of stuff. It's from emergency medical technicians on fire trucks or ambulances right on through to the core, right in the operating theater. If you can solve problems in the operating theater, though, you might imagine most of the rest of the stuff that goes on is probably a little bit easier to resolve and be part of.

Paul, thanks for your perspective. And if I look at this industry, it's not just in the operating theater, it's enterprise-wide. And I look at the TeamViewer platform, with the Upskill integration, Ubimax and others, I think, I look at them as a very horizontal platform, where they're kind of -- if anybody follows football or some baseball play, these guys know they can pitch, they hit. Football, they're playing quarterback, receiver, tight in. I look at the TeamViewer platform as that kind of versatile player that can go into almost any industry. So Jan, Lennard, I mean how do you maximize the experience for your platform with your customer base since it is so wide today? And what industries are you seeing kind of the most growth in support in today?

Yes. So Matt, it's indeed a horizontal platform, as you said, which can cover almost any use case out there for which we cannot apply smart glasses like the M400. But it is highly important that we've built essentially solution templates on top of that platform, which are then covering the different verticals like health care, manufacturing, automotive, food and beverage, logistics and so on and so forth. It's really, I think, at least after the Upskill acquisition, we, I guess, now cover almost every industry really with our platform in terms of use cases. But If you only have a platform, it takes way too much effort to implement it at customers the way customers need it and to really provide benefit to customers. And that obviously increases costs, which needs to be avoided, which is again why we took that approach that we have essentially templates for solutions, vertical templates, which bring a lot of benefit out of the box. And then we, as a solution delivery team, go to the customer, take that template, and then we configure it to match even better the customer needs essentially so that the workflows, the user interface, the integration with the existing IT infrastructure really provides the maximum benefit to our customers. Having said that, we really always make sure that we do not customize our software. We really only configure it. So it's highly configurable. You can configure almost everything that you want to configure, but it's not customization, meaning whenever we have an update of our platform of the horizontal platform. We can put -- we can provide that update to all of our customers without losing any of the customer-specific configuration work that we have done. And that allows us, obviously, to use and reproduce what we've done at some customers with our solutions at the next customer. And by that, we manage that -- to get our platform better, better, better. And what took us, I guess, like 3, 4 months when we look 3, 4 years ago, now sometimes just takes a week or a couple of days because almost everything is already there out of the box.

Thanks, Jan. That's great. And speaking of benefits, If I look at the Medtronic team, what kind of benefits are you seeing from the implementation of the smart glasses in terms of cost and time savings? And are there any other areas, savings that you guys are seeing from your perspective?

Yes. So in terms of cost savings, I think the most obvious one is travel costs, which are safe, right? And that's in all kinds of use cases. And so maybe for our remote support use case, which is supporting our customers in the OR, right, it's not even that important of a driver actually. But if you, for instance, look at internal use cases where we otherwise would fly people from the U.S. to Europe to do things together, now we can do that without actually flying these people over, right? So the cost savings there are really -- can be quite substantial, especially if you apply it across the company in all kinds of different use cases. But I actually would say that the main drivers are not necessarily related to that, but more like that we have broader access to expertise, right, and can also provide better service actually on -- which, in the end, that also can lead to better care. That will be the goal in the end. And I think if you look at white care -- sorry, health care in general, actually, that is also driving a lot of these things, right, maybe not even only Medtronic, but also for hospitals and health care practitioners, the idea that they can have access to peers, which are now maybe also 100s of kilometers away, right? That is very, very interesting also for the health care sector in general. So yes, that is a much more important driver, I think, than cost savings per se or time savings per se. But yes, for sure, they are also there, right, if you don't have to travel. You don't have to pay those travel costs, plus it's better for sustainability perspective, right? I mean travel we're doing as a company is quite big, of course, if you take a company the size of Medtronic with 90,000 employees worldwide, right? So if we can decrease that only already by a little bit, that will be great from a sustainability perspective and our footprint as well.

It's definitely greener.

Yes.

Certainly more sustainable. Yes. I think we -- there are other elements of it to sort of task and instructional efficiencies, so being able to provide more information to people in a hands-free setting so that they can have guidance and instruction. And maybe that's -- and that goes beyond just that one-to-one calling and have somebody else giving that in a one-to-one setting. It's actually -- that can be given to them on the glasses and the headset without having somebody on the other end. So sort of elements like that as well, I think those sorts of efficiencies, we're starting to see some good results there.

All right. So as the kind of moderator of the Q&A, I get to ask the tough questions and don't have to answer as much. So we've been through a historical moment in time, I think, in our lives and even generations with COVID and the impact it's had on really organizations, our daily lives. So looking at your organization, we'll start with Medtronic, I mean, what does the future hold after COVID settled down as it relates to this project? Are things going to stop? Are they going to slow down? I mean how do you see life after COVID? Paul, I think you're muted. There you go.

Yes. Yes. I'm muted now -- you can hear, right? Good. Yes. So in terms of impact, of course, what we've seen is that COVID definitely has -- we mentioned that before, right, has accelerated the innovation, definitely also within the company, but also in terms of collaborations we did with partners, which we usually take maybe months or years to set up, right, or to execute upon. And you see that if -- when there are challenges like this, then that definitely gets accelerated, right? There was a huge need around ventilators to operate them remotely, right, on things like this. And we really stepped in there quickly and provided solutions in that area, which otherwise would have maybe taken much longer. So that's very -- yes, very good to see, I think. And I think, yes, when you talk about when COVID settles down, and what we see is that, we don't expect this to go away than anything like this. I'd rather made clear what kind of opportunities there are with this type of solutions. And yes, we think that will definitely stick within the industry and within our company.

Yes. I think it's definitely -- it's -- at an organizational level has changed, and we've learned a lot of different new ways of thinking and how we can apply different -- like different ways to approach things to support customers better and also -- but -- and support employees and people on how they work -- different ways that they work. I think that's not something that's just reserved to health care, of course. I think everybody is realizing these changes and seeing that across all different industries. But that's where we see this project and Vuzix and the work that we're doing with Vuzix and TeamViewer is these technologies and these new ways of working will be key in how things move forward. And we've implemented in a situation of change and upheaval, but it, as a result, has really affected the way that we're going to be doing work in the longer term.

So my interpretation there is you've seen this kind of pivot a little bit and kind of how we do things and how things change going forward. And it's -- we found a way to adapt and now we've had a kind of change in direction and a new way of doing things through technology. But it is amazing that companies have thrived and with a lot of their employees working remotely, a lot of companies have thrived and found a way to keep going. Vuzix, Paul, from our side, I know during our last conference call, we talked about industries coming back online post COVID and really the world not stopping and our customers continuing to move forward. Anything more you want to -- your thoughts on the -- what happened after COVID here?

Going into COVID, there were so much of our business that just stopped. There's organizations in warehousing and manufacturing facilities, and so much of that got put on hold. The cool thing is it's -- all of it seems to be coming back, in fact, it and more. I mean we just announced some folks in the real -- excuse me, insurance industry that just started using our products and rolling it out for real deployments. And we're seeing it more and more where some of the stuff that had been put the brakes on literally because people couldn't be on a job site to work because they're all closed down, that's all coming back, which is great. And it's great to see the vaccine coming around. So hopefully, the whole world at some point in time is in that same boat where there's a little bit of normalcy again. That said, Matt, in the longer term, Vuzix sees the future of computing changing. The one thing you can always count on is change, especially in the technology -- world of technology. It used to be computers were the size of a room. And clearly, they shrunk down now to the size of your phone. And you can just see it with the operating system on the phone. It's no longer about, hold the phone up, touch the screen and do this. We're being trained with augmented reality applications, where you point the phone down the street, the cameras looking down the street. The screen on the phone now is modified as a function of what you're looking at. And one of the simplest ways to see that is with the game called Pokémon GO. In a week, more subscribers than Twitter, and it's all about chasing Pokémon characters by pointing your phone down the street. That mapping systems, AR core, AR kit, the connection of the digital world to the real world, and it could not be more important than an industry. They'll walk into a plant floor and just look at a piece of equipment. And through the glasses you have on, every single diagnostic thing that needs to be done, preventive maintenance, early, whatever connected cities, I can guarantee you that the future of computing is going to be wrapped in some way, shape or form around glasses. And you got to get glasses people really want to wear. I think we're not in a bad spot today for the enterprise kinds of places. But for Vuzix, we're working on next-generation glasses that literally have that Oakley look and feel that the Special Forces guys wanted. And that's where we see ultimately this going. It's going to change every aspect of life. And 5 years from now, people will look back and say, "Holy mackerel, I never would have thought." I'm sure, Tim, even in your organization, you see people are saying, "Wow, this is so darn cool." And the M400 is just scratching the surface of the kinds of capabilities that are coming for this sort of technology.

Yes. Definitely. We're really excited. Every -- all the presentations that Paul and I do and really talking to people about the project, yes, it's -- everybody is very excited. And I think we then show them what's coming next, and they can't wait. So yes, definitely ready for the next step as well.

Can I ask just one same question over to the TeamViewer team? I know you guys have kind of a wide array of customers and industries you support. What do you think the future holds after COVID for the organization that you guys are working with?

Yes. So what we've seen is that COVID has definitely been an accelerator. We see many companies that had innovations somewhere on their agenda, but that just went straight up when COVID started. I think Medtronic has been very illustrative for that. And we see many of our customers that report that there is tangible return on invest and that there would be no real reasoning to go back to traveling or to not having access to that information. I mean why would you? So we definitely think that the solutions that we implemented are there to stay. Even further, there's a lot more steps that we could do at many of our customers. There was a sense of urgency when COVID started, and we did many out-of-the-box deployments because that has a quick turnaround time. You can quickly implement it, already gives benefits. But there are many more things that we can do with our platform. We can integrate our platform, for example, with an incident management system or with an ERP system and every solution that is ever more integrated in the IT environment. Those are things that take some more time and that we expect we will do as next steps after COVID.

Definitely. That's great. And then kind of one question we had, I think we've pretty much covered today, but it was around how much has this industry changed over the last 5 years. I look at Vuzix and TeamViewer, the Ubimax, the Upskill, the combination of everything. We've been kind of pioneers in this space for years. And it's the hardware improvement, it's the software. It's not rewriting software. It's just doing some customization. So it's really been a turn from a test-and-trial to really a plug-and-play deployment, getting that feedback, and everything kind of just works well. Plus I think the Internet has improved. You got improved WiFi, the phones, the LTE, the coverage. You have 5G coming along. So everything is kind of lining up, they'll deliver these type of solutions. So with that said, I'm a big fan of the movie Back to the Future, where Marty and Doc went into the future and visited. If we forward 5 to 10 years, now this is a long time and in real time, but what do you think will be the biggest changes in the modern day operating room in terms of the look and feel due to technology like smart glasses?

I think we'll see it as more of a standard. I think there's operating rooms as we start to increase connectivity, as we start to sort of, as Paul was talking about earlier, decentralize some of that expertise and give better access and really have better connections from peer-to-peer support. I think we'll see more and more. There will be a sort of standard equipping of operating rooms with different broadcasting tools and camera perspectives, of which I truly believe that smart glasses and a head-mounted perspective is going to be core and at the center of that. I think adoption of these innovative technologies as well. And as Medtronic work in supporting these -- our partners and health care providers, we would look to be working with them to enable that. And yes, I think the connectivity is really the key -- is the key principle there. Paul, I don't know if you had any further thoughts as well.

No. I think that is spot on, Tim. That we'll definitely -- I mean once the sector sees the potential, and we already see that happening based on feedback also from physicians, which we get, right, then yes, this will become more and more a standard to be able to do this type of communication, right? And also, yes, that is more integrated in the care part in general, I think. And the procedure, in general, will probably happen as a lot more and more and -- yes.

I think you will just see much less physical screens, many, many virtual screens -- or not screens, actually, but information, which will be there when you need it at the point where you need it. I think that's really where the industry -- health care industry, but also every other industry actually is moving to with the help of smart glasses like the Vuzix Blade, for example.

Yes. I agree with that, Jan. But the physical device, in a lot of cases, won't be needed down the road. I also think that you'll see the glasses not just as a comms tool, help with support during an operation but a fundamental component of performing the operations down the road. It's one thing to get the heart rate without having a look over at the heart rate machine. It's quite another one to do the surgery with the glasses on, and it is guiding you through the surgery and the likes, like the knee surgery, which is just a starting example of that. I mean all of that equipment in that room is computers, and this is the future of computing. And you -- all you need is really the centers and a communication link to it, and the glasses can manage so much. So I just see it more and more and more integration and becoming more fundamental to the processes and procedures that happen on a -- in an emergency room.

Yes. I think we'll see that more as these devices become more connected and that data -- and all that data that's being collected can be aggregated. And then you can compare that as well against other data from a wealth of information that's kept. And then from that, surgeons or doctors can then make more informed judgments being given more sort of a much broader overview of all the information.

Glasses will physically know more where they are in the room, too. Right now, we don't put, because we want lightweight and small, a lot of spatial computing sensors and that sort of stuff in our glasses. That's changing. Some of our future stuff is going to have more and more of that stuff built in. So the idea is the glasses will know where they are, they'll know where everything else is. And with all of that, it's so much easier to connect and put the data and information where you want it, when you want it.

It's really the ultimate vision actually of TeamViewer. That's why we started with IoT then moved into the AR world because we believe those 2 trend topics at the moment, I'd say, but they will ultimately eventually kind of merge. I mean they will also have their independent use cases, but the benefit for many, many use cases is so much higher if you combine them. If you have the data, you display them on a smart glass, and that's really the ultimate vision for what we strive for TeamViewer also on the software side: to combine IoT -- our IoT product and our AR product, which we have already done so that we can provide everything out of one hand here.

It's a good vision, Jan.

This is great. I look at the health care space. So we have Ohana One, our friend, Paul, follow on the call as well. They're joined as I guess. But they're taking the glasses, using it to train a doctor in Africa from United States. So you have -- those are kind of the end users. Those things are just -- it's just remarkable what's happening. And the pandemic -- also I work with University of Louisville, they did some kind of clinical assessment that was published in the American Medical Association. But because of COVID, they couldn't bring the students in on the clinical side. They use the glass to get that -- the doctor point of view perspective and actually found that the experiences they provided were unheard of and never seen before. So they went to technology. They found a gold mine of information, and they're looking to roll this into their actual clinical program even after COVID just because it provides that much support and information. So Paul, I know you're about to say something else.

Which Paul?

Paul Travers, you.

Was I, Matt? If I was, I forgot what it was, Matt.

No problem. All right. So this is the -- we've completed the planned Q&A. Ed, I'm going to pass this over to you. If there's anything specific from the audience that you want to ask the panelists, feel free to direct those questions. And the floor is yours.

Well, thanks, Matt. This is Ed McGregor, also with Vuzix. There was also -- there was a question on disinfecting the glasses, which I believe was answered online. There was a question on HIPAA compliance. And I believe that was also answered online with the TeamViewer product being at both compliant. We covered a lot. One of the questions had to do with LTE in the phones, the telephony going into the smart glasses. Maybe you can give a comment on what the future looks like for getting LTE in the phones. And also in a related question, there was a talk about using them in ambulances. What kind of a cellular connectivity currently exists out there, Matt?

I can address some of that one, Ed. That's about connectivity. I mean it's critical. Today, WiFi, Bluetooth is relatively easy to do because the power levels of the radios is less. People are wearing these things, right? And so if the RF field is high enough, there are concerns about potentially disease-created issues associated with the RF rate. Just like per your cellphone, there's millions of tests happen all the time to make sure phones have levels that are low enough for SAR compliance, which is basically the level of intensity of the RF fields associated with human tissue. Vuzix is working on glasses with LTE radios. You can currently use, through some of the USB-C interfaces that we have, dongles and things like in CEOs, WiFi hotspots wired directly to our glasses. So you don't have to have a WiFi to the LTE radio that then goes out. It's a wired connection that gives you basically LTE today. There's other ways of doing that right now. But ultimately, I believe you're going to see LTE first, and then ultimately, 5G built right into the glasses. And with edge compute and the likes, that high-speed connection close, especially in things like an operating theater where you can have edge compute around the outside of the operating room, high-speed connectivity, millisecond response times, keep the processing power down in the glasses. It's going to be amazing things you'll be able to do. That's a fit out. Step one in this process for Vuzix is LTE radios in the glasses. We have a pair of our next-generation smart glasses that we're working on that will have them in it. And that payer is all about testing, getting it right, getting our fields down, managing all of that RF aspect of this to make sure that we can do it right in the long run.

Yes. And I can add, too, I think from the perspective of some of the carriers we're working with health care in the same space that Medtronic operates in. And that's a key vertical for them. I think they see the need to bring that network into the operating room. I don't know, Tim and Paul, if you have anything you want to add there from the Medtronic side as far as connectivity goes and how this might play a role. But if you have anything, feel free to share there.

Yes. So we definitely do see that getting connectivity is a topic, especially because, of course, we go to our customers, right? So we don't necessarily control that infrastructure there. So we definitely need to work together with the IT department and try to get WiFi access. And that's why what Tim said is buy-in from the hospital is very important to be able to do that, right? So if we can somehow disconnect from that necessity to get that type of connectivity and move to a 5G or a mobile type of connection which has reach in a hospital because that is another challenge often in these type of situations. But yes, if we get to that point, that will be great, of course, because then we can operate independently to fund that hospital infrastructure. That would really solve a lot of headaches, which we can have and time we need to spend to onboard the technology.

If it was actually companies like Verizon, they have every hospital have a dedicated 5G edge compute package built into the hospital mainframe systems.

No doubt.

We agree, yes.

I think just from a practical sense, it's going to be difficult. Mobile signal in hospitals is notoriously difficult to get any sort of connection, mainly a lot of the time due to the lead lining and radiation protection that's included in operating rooms. So I think for the time being, we'll certainly be reliant on the WiFi connections. And yes, so I think it's partnership with hospitals that will be vital.

And there are actually many, many, many use cases out there where WiFi will, for a long, long time, be the primary way of connecting because often you want, due to data security, you don't want to go via the Internet. You want to stay in the intranet of company. So I hope also that Vuzix continues to have devices without -- with purely WiFi because ergonomics -- for smart glasses, ergonomics is even more important than for phones and the like. So -- and obviously, every milligram that you can save on the hardware side is important for those use cases. So for -- and I think there are definitely more than 50% of the use cases will any way choose WiFi over cellular connection.

Especially in enterprise. I agree, Jan. You can count on us to be there for you, man. WiFi all the way.

Yes. If I look at the infrastructure and kind of the connection grid around buildings, a lot of us are using the WiFi. It's also in remote locations and in places where it maybe makes sense to have a cellular connection, dedicated network that you can connect to and just go. Ed, any additional questions you might want to share here?

No. I think you guys have done a pretty good job. There was just a good closing question: "What's the best way to contact Vuzix for interested parties?" I think the answer might be getting tight, but you can feel free to answer out loud, too.

Yes. You can e-mail us at [email protected]. That's an easy gateway [email protected], and we can reply and look at your questions or anything you might need there.

Jan, you want to offer for TeamViewer?

Yes. I think contact data is on the web page or you contact us directly. It's first name, dot, last name at TeamViewer.com.

Awesome. Well, I just want to say thank you to the panelists. This has been great, very educational. I know we've taken time out of your day, your evening over in Europe. I appreciate the time here. And I think we plan on having a recording of this, and a playback will be available. So if you're interested in that, we can show those links. But I just want to thank everybody today, the panelists, for sharing their thoughts. It's a very exciting time in the industry, very exciting time in health care and just overall to be part of this space. And it's great to have partners like Medtronic and TeamViewer from the Vuzix perspective that will get online and join us and share their perspectives with the industry and the attendees.

I echo that, Matt, especially for our partners here. Thank you very much for taking the time with us.

Thanks for having us.

Yes. Thank you for having us.

Thanks for organizing.

All right, so this will end the webinar fireside chat. We thank everybody for their time, and we look forward to working with you in the future.