This year, some 50 million fitness trackers will be sold. Devices such as the Fitbit HR, Jawbone Up, and Garmin Forerunner are among the most popular “tech” gift items this holiday season. This category has come a long way in terms of capability and functionality. 2015 was the year where “optical heart rate monitoring” moved into the mainstream, catalyzed by the introduction of the Fitbit HR.
Yet, shopping for these devices is overwhelming. Going online to read the many articles on the “best wearable tech of 2015” yields little sense of major product differentiation. Ask the guy at Best Buy which one to buy and you’ll get a deer in the headlights sort of stare.
One of the reasons Fitbit has nearly 70% market share is because it’s the wearable tech equivalent of the old adage, “you’ll never get fired for choosing IBM” (or an iPhone). There are at least 25 fitness oriented wearable devices that do almost exactly the same thing. With Fitbit, you’re buying into the ecosystem and what all your friends have. Withings and Misfit make beautiful looking devices but are not as strong technically. Garmin and Polar are the athletes’ products. With Pebble, you’re rooting for the ‘startup’. If you buy the Apple Watch, it shouldn’t be because of its fit-tech capabilities. Android-based wearables are like most Android phones: lots of choice and a little cheaper, but generally lacking in hardware refinement and software polish. You want to root for the Microsoft Band 2, which is a very competitive product, but falls just short of the mark in a few key areas.
One has the sense this space is about to plateau. The devices introduced for the holiday selling season, such as the Microsoft Band 2, Polar A360 (is it car?), and Garmin Vivosmart HR, don’t break any new ground. You can get a good device with optical HR for ~$100 now. That same price point next year will probably feature GPS, too (if you want/need it). What’s interesting is there is no one “best” product in the category, such as “if you are willing to spend an extra X, then get this”. The device with the most accurate optical HR isn’t the best for sleep tracking, etc, etc.
So, with commoditization a distinct possibility, what’s needed in order for fitness wearables to get to the next stage? I’ve broken it into a few categories.
Accuracy. Read the reviews and this is the area that still needs work. We’re in the early days of optical HR and most devices out there don’t perform as well as a chest strap. GPS accuracy is also an issue with some who are introducing this capability into fitness trackers, compared to those who have been in the “GPS Watch” business for a long time. Some companies have also put a lot more effort into being able to passively determine what activity one is doing, such as walking/running/cycling/tennis, etc.
Sensors. This will be a continual area of product innovation. Today’s best of breed products incorporate an accelerometer, motion sensor, HRM, altimeter, and more. Other categories ‘in development’ include blood pressure, hydration, oxygen levels, cholesterol, etc. Which of these measures are for the mainstream market and what are the tradeoffs in form factor, price, and, potentially, battery life? Another question is whether there will be any modular type capability in these products. For example, the ability to buy a base band and then add sensors or functions geared toward a particular area of interest, such as fitness, sleep, nutrition, and so on.
Ecosystems. We all know a huge part of Apple’s success is the ecosystem: Hardware-software-apps. Fitbit comes the closest in this category, which is one of the reasons why it has nearly 70% share. This success, and a strong IPO, has allowed the company to continue to be the category leader, making acquisitions, hiring a large sales force to push into the enterprise, and provide great customer service. The other strong ecosystems in this space are, in my view, Garmin, which remains the athlete’s choice, and Apple, more for the foundations (Watch, HealthKit) it has laid. Withings is another interesting one because of its focus on superior design and a focus on the health rather than the fitness category, and their product innovation.
Additional Analytics. A slick, detailed dashboard has become the ‘ante’ in this category. I think the next wave is to provide additional analytics by pulling data from other sources, whether on the net or apps on your phone. How do weather, nutrition, type of work, and other aspects of lifestyle affect goals? For the daily runner, for example, is there a correlation between sleep and speed? Are there correlations between diet/exercise and sleep quality? An interesting aspect of this could be having some information to report to your doctor/nutritionist/coach, etc., all permission-based and with the right safeguards and controls.
Big Data. The leading companies have been very careful about privacy and the sharing of data, as they should be. But as the devices become commoditized, I believe there are some compelling additional opportunities for monetization, with the appropriate safeguards in place, given the incredible amount of data being collected. Waze, for example, has done this with traffic, packaging its crowd sourced data, on an anonymized basis, to entities such as government departments for urban planning and other initiatives.
Nutrition. While there has been some progress in making it easier to incorporate nutrition data into these apps, for the most part the process is still painstaking, time consuming, and not accurate. Whoever is able to pull off the “Shazam of Food” is a guaranteed Unicorn. If we find a better way to incorporate nutrition with health/wellness/fitness, this space will become a much larger ‘lifestyle’ category.
Clothing. Many have thought ‘smart clothing’ would be one of the next big things in this area. So far, these products remain niche, expensive, and gimmicky. But there are some serious dollars and designers doing work in this category and it would be great to see breakthrough products some time in the next year or two, particularly if they play well with existing ecosystems.
Market Segmentation. The thrust for most companies in the space has been toward the mass market. I think we will see more segment-specific wearables emerge over the next couple of years. They will all have some core functionality but then elements of hardware and/or software geared toward particular market segments, such as athletes, nutrition/weight loss, and so on.
Finally, I think we will see some consolidation in wearable tech. Already, a couple of companies have pulled their products over the past couple of months. Rumors swirl about Jawbone. I can see Garmin and Polar coming together.
The pieces are in place for the fitness wearable category to move to the next stage in 2016.