Narrative: Wearables are Struggling
Each narrative page (like this) has a page describing and evaluating the narrative, followed by all the posts on the site tagged with that narrative. Scroll down beyond the introduction to see the posts.
Apple Watch Series 2 Satisfaction & Usage Survey – Wristly (Mar 13, 2017)
Wristly is one of the only organizations out there which does regular Apple Watch user surveys, and as such provides some very useful insights into how users feel about their Watches and how they use them. It’s worth reading the whole thing, but I’ll call out two points in particular: user satisfaction has risen over the past year as the number of users has grown significantly, and the drivers are the new hardware and new software Apple has released in the past year. That both have driven increased satisfaction is obviously good for Apple, but the fact that the new software improved the experience has possibly also worked against bigger hardware sales – I know my first generation Watch performs well enough running the new software that I don’t feel the need to run out and buy a Series 2 device, and I’m guessing the same is true for others. But of course the Watch has sold reasonably well regardless, and so the user base continues to expand, albeit still at a fairly small scale relative to massive mainstream categories like smartphones.
via Wristly
Fitbit proves heart rate monitors can be slim with new Alta HR – Ars Technica (Mar 6, 2017)
Given all the focus Fitbit has been putting into smartwatches lately, it’s good to see the company get back to focusing on its core value proposition: really good dedicated fitness trackers. The acquisitions it’s made and products it’s launched have made me worried that, rather than sticking to its core market, it’s trying to expand into territory dominated by Apple and to a lesser extent Samsung, which seems unwise. The Alta will now get a version that costs $20 more for an embedded heart rate monitor, and which also promises to track sleep better. This is good incremental innovation from Fitbit, which seems to have managed to squeeze the new functions into the same size, and it should also give average selling prices a bit of a boost. ASPs have risen over the last several years, but remain under $100 most quarters, and have been boosted most in those quarters when new high end devices launched. Given Fitbit’s bad Q4, it needs lots more of this kind of thing to spur repeat purchases and broaden its addressable market, though the overall ceiling on this market continues to be one of its biggest long term challenges.
via Ars Technica
Wearables grew 16.9% in Q4 2016, Fitbit still first but Xiaomi is gaining – VentureBeat (Mar 2, 2017)
The numbers here look about right, but what a far cry from the forecasts of the wearables market we saw a few years back. I recently wrote a piece on the state of the wearables market, in which I argued there are really three important sub-markets within wearables: the Apple Watch in its own category, dedicated fitness trackers (in which Fitbit dominates in western markets and Xiaomi in China), and Samsung’s various devices, many of which are bundled with smartphone purchases and therefore thrive on a rather different business models from the others. These IDC numbers largely back that up with market share numbers, but also reinforce the point I made in that article about how the market has fallen short of its theoretical potential and largely stopped growing. It can still grow, but the offerings need to get much better and broader in their appeal, and to some extent we also need the technology – especially in components – to catch up with the vision here.
via VentureBeat
Huawei Watch 2 and Watch 2 Classic officially unveiled at MWC 2017 – AndroidAuthority (Feb 27, 2017)
These two watches are somewhat reminiscent of the LG smartwatches that debuted with Android Wear 2.0 a few weeks back – there are again two, with somewhat different form factors, but this time the feature set is more consistent across them, as is the price. That price, though, is fairly steep – in line with the low end of Apple’s Watch price range, which continues to be a tough place to be when your watches look very much like the smartwatches they are rather than nice pieces of smart jewelry. Huawei definitely has the scale to do some interesting things in watches if it chooses to, but I can’t see these new models selling in very large numbers at these prices.
via AndroidAuthority (more on Techmeme)
Nokia Making Big Move Into Digital Health, Relaunching Withings As Nokia This Summer – Forbes (Feb 27, 2017)
This is where things are going to get interesting – on the one hand, you now have HMD Global launching Nokia phones, and on the other you have the entirely separate company called Nokia launching its own consumer gadgets under its own brand. So there will be both smartphones and fitness devices in the market carrying the same brand, which have nothing to do with each other. It looks like Nokia is going to kill off the Withings brand it acquired and make a big push into health and fitness. As a non-consumer brand since its sale of the phone business to Microsoft, this is going to be an uphill battle for Nokia, and especially in a crowded and somewhat stagnant wearables market. Withings produced some interesting devices over the last several years, but it’s never had significant market share, and I’m not convinced Nokia will change that. Health (as opposed to pure fitness) is certainly one of the more promising aspects of this broader space, and it looks like Nokia is investing there, with a HIPAA-compliant Patient Care Platform among other elements. That may be its one opportunity to succeed where others have failed.
via Forbes
Fitbit Reports Final Q4 2016 Earnings (Feb 22, 2017)
I covered Fitbit’s preliminary earnings release a little while back, and we already knew these results weren’t going to be pretty. This was the first quarter of year on year declines, and also featured the company’s first meaningful losses since 2013, when it recalled its Force device. Its costs, especially its sales and marketing costs, rose considerably as a percentage of revenue, and its cost of revenue in particular was well up on last year’s despite the much lower revenue. As I said a few weeks ago, though Fitbit is downplaying these results as a temporary setback and promising a recovery, I see little evidence to support that assertion. Interestingly, some of the metrics Fitbit only provides once a year around user numbers suggest that it’s sold relatively few second devices to the same users – its registered user number is over 80% of its total number of cumulative devices sold, suggesting under 20% were sold as second devices to the same users; in addition, its active user number is now under half its total registered user number, suggesting an over 50% abandonment rate. Those two combined, together with the relatively small addressable market for dedicated fitness devices, are why Fitbit is having such trouble.
via Fitbit (PDF)
Android Wear and LG Watch Reviews Are Mixed at Best (Feb 8, 2017)
It looks like Google and LG lifted an embargo this morning on Android 2.0 and LG’s two new smartwatches. My first reaction to the reviews here is that the new watches sound pretty terrible, and that we’re back to grading these smartwatches on a curve, something I first noted back in 2014 before the Apple Watch was announced. The Verge review is illustrative – it notes that the Sport version is uncomfortable and enormous (it doesn’t fit under shirt cuffs), doesn’t have interchangeable bands, the Android Pay app takes too long to load, and can’t be used while swimming; the Style version lacks most of the more interesting features on the Sport, looks cheap, and the batteries on both versions struggle to make it through the day, while Android Wear 2.0 is pretty buggy. The Verge’s rating? 7.1 for both. Their rating for the Apple Watch Series 2? 7.5. Android Wear has struggled to take off ever since it launched – it’s just never felt like Google or its OEMs understand that watches are fashion accessories, and need to be designed for that job. Packing a billion features into these watches isn’t going to cut it, especially if they don’t work well, or they end up looking ridiculous on your wrist. I’ve seen nothing here that makes me think Android Wear 2.0 is going to do any better than the previous versions.
via The Verge (see also CNET’s review here, while Techmeme should have more here shortly)
Fitbit Announces Preliminary Fourth Quarter 2016 Results (Jan 30, 2017)
These are preliminary results from Fitbit, designed to flag to investors that revenues in Q4 were well down on previous forecasts, and to announce layoffs and other cuts to the business designed to realign costs with lower revenues. The company will lay off 6% of its workforce as part of an attempt to cut $200m (or almost a fifth) out of its operating cost run rate for the year. Bizarrely, it’s still characterizing its current troubles as temporary, even though it’s given very little evidence to back up this claim. Importantly, revenue in the first half of 2017 is likely to be down compared to H1 2016, because it had big new product launches a year ago. So even if we’re to believe the claims of a rebound, Fitbit concedes there won’t be any evidence of it until later this year. Fitbit continues to be by far the most successful standalone wearables company out there, but if even it is struggling in this way at this point, that’s indicative of broader challenges for the wearables industry.
via Fitbit
First Android Wear 2.0 devices revealed: Google and LG’s Watch Sport and Watch Style – VentureBeat (Jan 17, 2017)
Evan Blass is the Mark Gurman of the Android world – when he reports on a leak, it’s usually pretty reliable and often ends up being very accurate indeed. The watches described in this leak are in keeping with what we’ve already heard from Google itself and other sources, so that lends additional credibility. The context here is that Android Wear has never really taken off – as with VR, the biggest success among the Android vendors hs been Samsung’s, which hasn’t been based on Android at all, and Google needs to ensure that other Android OEMs without their own ecosystems can compete too. So far, that hasn’t worked, and some Android OEMs are giving up on Android Wear for now. However, Google clearly hasn’t given up, and appears to have convinced LG to join it in launching some new watches to showcase Android Wear 2.0. I’m skeptical that this will make any difference – what’s become clear since the Apple Watch launched is that we don’t yet have a great model for smartwatches other than as fitness and health tracking devices, and Android Wear doesn’t seem to have provided very appealing options in that category.
via First Android Wear 2.0 devices revealed: Google and LG’s Watch Sport and Watch Style – VentureBeat
Jawbone in search of new funds after Fitbit approach – Financial Times (Jan 11, 2017)
Fitbit was already in the news recently when it ended its attempts to block sales of Jawbone devices on the basis that the latter appeared to be circling the drain, so it seems even more of a knife between the ribs in the context of an allleged attempt at an acquisition. Though this one failed, it’s further evidence that Fitbit is engaging in a massive rollup of wearable technology companies. But this story is also noteworthy for what it says about Jawbone’s plans to secure a future for itself, which apparently are centered on FDA-approved healthcare devices and therefore potentially an insurance-subsidized model. Fitbit has already pursued the corporate market, and Apple Watches have been sponsored under certain employee healthcare plans too – this is a fascinating new thread in the development of wearables, and one that has the potential to mirror the benefits the iPhone and other smartphones received from the carrier subsidy model.
via Jawbone in search of new funds after Fitbit approach – Financial Times