Why the Fitness Trackers Days are Numbered

on August 14, 2015

I had the privilege of being involved with a wearables panel at the Flash Summit held this week in Santa Clara, CA. As you perhaps know, flash memory of some type is used in all wearables to store data collected as it tracks and analyses the various functions on smart watches, Fitbits, Jawbones and pretty much any wearable device in the market today.

But as this panel looked at the actual fitness trackers and their link to healthcare, it become clear to me that, while fitness trackers blazed the trail in connecting wearables to health monitoring, as a standalone dedicated fitness tracking device, its days may be numbered. Fitness trackers as we know them fall under the category of application specific devices. That means they have a fixed set of applications embedded, such as step counting, heart rate monitoring, calories burned, etc. However, John Feland, the CEO of Argus Insights, pointed out their research shows around 60% of those who bought a dedicated fitness tracker stopped using them within 6 months of owning them. He likened them to being mini treadmills — people buy treadmills but soon after being excited about running or walking on them, they stop using them and they become expensive clothes hangers for many.

If I was a company that had only dedicated fitness trackers, I would be concerned with this research. I have no doubt fitness tracking and health monitoring is going to continue to be an important set of applications for millions of people. I just don’t know if a fitness tracker that only does these set functions alone has long-term legs.

What I believe will happen is the majority of the market for fitness wearables moves to using a smart watch to deliver this functionality. These watches will build in the kinds of sensors needed to handle the basics and eventually, even more complex health monitoring tools to make health monitoring a major application area that can be delivered on a smart watch. The key reason the watch becomes the vehicle for these fitness monitoring apps is smart watches are based on an OS platform that is very versatile and allows it to be many things to many people instead of only being a single focused device.

Today, smart watches are much more expensive than dedicated fitness trackers, which means that, if a person really needs to track steps, calories, etc, a fitness tracker is a better buy. But, over time, smart watches will come down in price and be much more attractive due to their ability to do many things instead of a single set of functions. What is more interesting to me is these watches are based on an OS and an SDK that allows third party software developers to create a plethora of applications and services well beyond fitness tracking. As a result, they can present to a user a richer set of applications that can be used on a smart watch that goes well beyond the set functions of just health monitoring.

Of course, we are in the early stages of smart watches but even with slow growth at first I suggest you do not write these products off. With the Apple Watch, we are already getting important glimpses of usage models where notifications, health monitoring and multiple levels of communications are functions people like. In June, at the Apple Worldwide Developer Conference, the company introduced the first full Watch SDK. I expect to see a lot of innovative apps that, over time, will strike the fancy of many people. But the key thing to understand about the watch is it is a wearable platform for developers to create apps that can make these products highly versatile. You can’t get that with a dedicated fitness tracker today and it is not a platform play so you won’t get it from these apps in the future either.

Think of it this way. Smart watches are a Swiss Army knife and fitness trackers are pocket knives. In my own way of thinking about this, I see a fitness tracker as being training wheels for smart watches. Over time, smart watches can still handle all of the health tracking features anyone wants but, in the watch, they get ten’s of thousands or even hundreds of thousands of other apps that make it more useful and highly personal. I don’t know how long dedicated fitness trackers will be around but the way I see it, their days are numbered.