This Weeks News Unpacked

“We’re still committed”, says Jawbone CEO, but it may be time to regroup/rethink – By Carolina Milanesi

Late last week, TechInsider published an article on the news that Jawbone was slowing production of its fitness trackers and had sold its remaining inventory to a third party and concluded that Jawbone was exiting the wearable market.

On June 1st, Jawbone CEO Hosain Rahman published a blog post renewing the company’s commitment to the wearables market:

“To be clear, Jawbone remains wholly committed to innovating in and building great wearables products. We have never been more excited about our pipeline of technology and products and look forward to sharing them with the world when ready.”

Jawbone, together with Nike, started the fitness band trend as we know it today. Tech enthusiasts were split between the two brands when Fitbit started to get its grip on the market. In the US, Pebble came and started to shift early tech users towards smartwatches. Other smartwatches, including the Apple Watch, did the rest and here we are. Jawbone does not even show up in market share reports. Kantar lists Fitbit, Apple and Garmin as the top three brands in the US for the March 2016 period.

So nobody would have blamed Jawbone for exiting a crowded market where vendors are already pushed on margins and consumers still need to be convinced. However, given the January round of funding that raised $165 million plus the money that will come in from the UP inventory sale and the rumored sale of the speaker business, it should give Jawbone enough cash to rethink and regroup.

Design was probably the biggest appeal of the Jawbone UP family. Feature wise, the devices ticked the core boxes for a fitness band but did not really go beyond what others were doing, leaving them out-priced. Design will certainly go a long way but, for serious fitness people, features win over design. For less serious fitness conscious users, price wins over both feature and design. This leaves Jawbone in a tight spot, forced to either innovate on features and software in order to position its devices at the higher-end of the market or focus on design and possibly partner with fashion brands either openly or by becoming a white-label. Outside of these two options, they could only try and compete on price and we know how that usually ends.

Major American firms sign hate speech code of conduct with European Union – by Jan Dawson

Facebook, Twitter, Microsoft, and YouTube signed a new code of conduct regarding hate speech with the European Union this week. Such speech is not just undesirable but illegal in the EU and the companies signed up to do more to combat such speech, to implement notification and takedown systems, and so on. However, perhaps the most troublesome part of the Code of Conduct is this bullet point:

“The IT Companies and the European Commission, recognising the value of independent counter speech against hateful rhetoric and prejudice, aim to continue their work in identifying and promoting independent counter-narratives, new ideas and initiatives and supporting educational programs that encourage critical thinking.”

That smacks of promoting one kind of thought over another and, while I think we can all agree speech that incites hatred and violence is undesirable, it’s quite another thing to actively promote counter-programming. That could run the risk of stoking fears Facebook and Twitter in particular have policy agendas which they will use their platforms to promote. Both companies will have to be very careful to avoid being seen as partisan or favoring one set of acceptable speech over another. Facebook specifically has recently strenuously argued it doesn’t favor certain political views or arguments over others, so it will want to be mindful not to do anything to damage that perception. As a practical matter, it’s not clear exactly what such counter-narratives would look like. Identifying incitements to racism and violence is relatively straightforward but what is its opposite?

It’s therefore worth asking what would prompt these companies to sign up to such an agreement? The answer likely lies in the complex relationship between the EU and American tech companies. On the one hand, Europe is a big and important market and one that looks a lot like the US in many ways. But, on the other hand, there’s a lot of protectionism and backlash against big American companies. There’s always a risk the EU decides to investigate and take action against one of these companies so they have to do whatever they can to keep the authorities friendly and avoid that outcome. Sometimes it means preemptively making smaller, less painful concessions to avoid larger, more painful ones. With the EU action against Google as a backdrop, I’m guessing that’s part of the calculus for the companies involved. I just hope they don’t come to regret making these commitments.

Amazon and Pebble partner around Alexa – by Jan Dawson

Amazon and Pebble announced on Thursday that Pebble’s new keychain device, the Core, will feature Alexa integration. The Core is currently the focus of a Kickstarter campaign and Pebble expects to begin shipping it to backers in early 2017.

As I’ve written previously, the Echo has been a surprising success as a home device, but Amazon’s biggest challenge for its Alexa hardware is getting it out of the home. Since Amazon lacks a major smartphone platform of its own (its Fire Phone was a complete flop), it will have to find ways to get the functionality onto third party devices. This Pebble deal does little to help with smartphones but it’s likely indicative of Amazon’s strategy – partner with third parties who don’t have strong service ecosystems of their own for a win/win. In some ways, this is analogous to Intel’s strategy of working with companies from outside the traditional consumer tech markets for wearables – both companies need each other and it makes for a symbiotic relationship.

Clearly, one device by itself isn’t going to suddenly make Alexa ubiquitous, except for the small number of people who buy it. There’s a long way still to go and smartphones have to be part of the plan at some point, but there will likely be other similar deals over the coming months. The other big question is whether Alexa can perform as well on a tiny device that’s not optimized for far-field voice recognition as it does on the Echo. The answer is almost certainly is that it can’t but it will matter greatly if the performance is significantly worse. One of Echo’s most important features is the sheer quality of its voice recognition. If that goes away, it’s no better (and arguably worse) than competing solutions like Apple’s Siri, Google’s voice search, and Microsoft’s Cortana, each of which can be more useful through integration with a smartphone. I’m not convinced this strategy will pay off for Amazon over the long term but it’s good to see it’s aware of the need to go beyond its current first-party devices.

Microsoft And the Mixed Reality Platform – by Ben Bajarin
Microsoft made a bit of news at Computex that didn’t get enough attention, in my opinion. Stepping back, we have to recognize the VR/AR computing era will need some standard development platforms. SDKs, APIs, and app/content stores will be necessary for developers and content producers to distribute their creations. Like mobile, there will not be only one platform and there may be more than just the two we have today in mobile. But, Microsoft has put themselves in a position to compete for the platform for mixed reality which will span both VR experiences and VR experiences.

Microsoft has opened up Windows Holographic as a platform and will allow other companies to build hardware and software on it. Microsoft is putting Windows at the center of this knowing a lot of this content development is already taking place on Windows PCs. By extending developer tool sets and, most importantly, creating standards for development in both VR and AR, Microsoft is making the smart move to blend VR and AR and broaden the tools to create both experiences with the same hardware and software.

Samsung updates Wearable line – Ben Bajarin
Samsung has released a new version of their Gear Fit and also released a new set of completely wireless earbuds with a heart rate sensor called the IconX.

I had a chance to see both of these products during a pre-brief and, being a fan of the concept of the first Gear Fit (a fitness tracker with a big bright screen), these new devices are even better and, more importantly, very comfortable. Samsung did quite a bit of work with the user interface, optimizing it for a vertical orientation. While these devices are quite competitive on features and even one-upping Fitbit with a GPS built in, Samsung still needs to build more credibility in the health space. Both Fitbit and Apple have the lion’s share of trust and credibility in the mind of consumers when it comes to fitness and health and this is the uphill battle Samsung faces.

The IconX is a very interesting product and I was impressed with both the heart rate accuracy and the comfort of these wireless earbuds. Samsung is making a strategic error in my opinion by not bringing these products to iOS. While they support all Android devices via the S-Health app which can be downloaded from the Google Play store, it is really iPhone customers who are the primary buyers of health and fitness technology today. This could serve as a Trojan Horse for Samsung or help them compete more with Fitbit by being cross-platform. But Samsung is leaving money and potential future customers on the table by keeping their health and fitness accessories off the iPhone. Doing this would be a smart move for them in the future if they are serious about this space.