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9 days ago
Smartwatches are going nowhere
As earnings season wrapped up this week, one thing really stuck out. Just three years after we reached the peak of the hype surrounding wearables and smartwatches, two of the most important companies in the space reported diverging results.
Let’s call it “A Tale of Two Wearables Companies”:
Fitbit sold 3.4 million devices last quarter, down from 5.7 million a year ago, the company reported Wednesday. Apple’s story was the opposite. Although it doesn’t give precise numbers, the company said Tuesday that Apple Watch sales were up 50 percent for the quarter, likely fueled by cheaper models that weren’t available last year. (Research firm Strategy Analytics estimates Apple sold 2.8 million Apple watches last quarter, meaning Apple is inching closer and closer to surpassing Fitbit in wearables.)
Take that as more evidence of the point here, “No one wants a wearable”. They either want an Apple watch or something cheap and simple like a basic fitness tracker from Fitbit or Xiaomi that they’ll stop wearing after a few months.
Then, there are the failures. Companies like Samsung and LG have hardly made a dent in the market. Meanwhile, Motorola has given up making smart watches altogether. The buzzy startup Pebble was forced to sell itself. Jawbone is shutting down and liquidating its assets. The idea that the wearables can become a new kind of computing platform is dead as developers abandon making apps for smart watches and pull their apps from stores.
Right now, we’re seeing three major approaches to smart watches and wearables, and none of them have a major upside.
Let’s break it down by company.
Living like it's 2014
Fitbit announced Wednesday that it plans to ship its new smartwatch in time for the 2017 holiday season. The news comes after a slew of reports that said the company had delays launching the device earlier this year.
But as Apple pares down the Apple watch to focus on fitness tracking, Fitbit appears to view its smartwatch as a new kind of computer, telling The Verge the device will launch with a new app platform. While we don't have any specifics, we do know Fitbit using Pebble's old technology to help build out its software. That didn't work out so well for Pebble, and most other companies have already learned that apps don't make much sense on a smart watch.
Fitbit sounds like it's about to make a last-ditch attempt to fulfill the promise smart watches had three years ago.
Back to basics
Even though reviews for the first Apple watch were mixed and a bit confusing, it seems like Apple has found its footing by refocusing the Apple watch on the tasks people actually want to do: receive notifications, and track fitness. Apps have taken a backseat, and the Apple watch hardware has improved on the fitness side, thanks to waterproofing and the GPS for tracking runs.
And, of course, there’s the Apple halo effect. The Apple watch makes a nice tie-in to the rest of the Apple ecosystem and keeps you anchored to your iPhone. The company is also reportedly going to ship a new model of the Apple watch with a cellular connection soon, according to Bloomberg.
Going old school
Google appears to be going after a different opportunity than its peers in the smartwatch world. While Apple and Fitbit want to sell as many techie gadgets as possible and build out a platform, Google is using its Android Wear operating system to power watches designed by traditional watchmakers like Fossil, Tag Heuer, and Movado.
It turns out, that’s a win for all parties involved. The old-school watch brands have a new opportunity to repurpose their designs and attract new customers with a smartwatch, and Google can get its software onto more people’s wrists for those who don’t want a geeky-looking device like the Apple watch.
But, for a tech company focused on scale, Google will have to figure out how to expand Android Wear beyond just a few brands.
Overall, we’re going nowhere.
As the glow of wearables and smart watches wears off and the industry gets hot on emerging tech like augmented reality, we’re still in the early days of the slow death of the smart watch. And there’s nothing on the horizon that will elevate the smartwatch from a nice-to-have gadget to a must-have gadget.