Investors don't like physical products? Why? Physicality costs & yet, Digital is as fleeting as haute couture. Are there options? Yes. Think like Gillette for the 21st century - physical + digital design. Here's how:
Wired Labs has a good starting point: Bundling Digital and Physical but that is just the beginning as the investigation is where the juice comes out:
1) Ask why do it at all and what is this new thing that people are going to carry around?
2) See who's done it, so many have: Jawbone, UP, Brawn Electric Shavers w/skin sensors, naturally MP3 players, but there are others: Swifter, Roomba, Canary, etc. - we've examined these before.
3) How's it going to expand over time as if it isn't a platform and it can't learn or adaot what's the point?
4) Planned obselence for alternative purposes: you've still got your old laptop around somewhere using it for other purposes? There are whole companies dedicated to recycleing - yet another part of the eco system that your firm should be owning
And these are just a few of the ways.
Naturally through disruptive design, there are a host more.