Some not-so-fit bits about the state of the wearable technology market
via Flickr © chesterbr (CC BY 2.0)
- Mass consumer take-up of wearable technology still some years away
- Expense, utility, battery life, discomfort and the need to use devices in conjunction with smartphones affecting the market
- Market capitalisation of some major players declining
- Optimists say the revolution is coming but later than expected. Pessimists say it's not coming at all
Last month's Consumer Electronics Show in Las Vegas, Nevada, in the US, was once again a major showcase for 'wearable technology' and devices on display ranged from wristbands, watches, activity trackers, glasses, goggles and helmets through to wirelessly-connected footwear, socks, shirts and underwear including (and attracting much innuendo-laden comment), an 'intelligent bra'. There were also mountains of sensor-laden clothing, often so downright bulky and unwieldy as to turn even the most sylph-like wearer into a passable facsimile of the Michelin Man.
The hype was rampant with manufacturer after manufacturer trying their hardest to convince bemused delegates that their esoteric products are not fads but will soon be 'must-have' mainstream devices that, when attached more or less permanently to various parts of the human anatomy, will change users lives for the better, for ever.
However, despite all the marketing and advertising there has been no mass consumer take-up of wearable technologies. Many of those that have tried them soon give up on them whilst even more people simply aren't interested in paying hugely over the odds for a glorified pedometer, utilitarian digital and analogue examples of which can be picked up in a retail store for a few dollars each.
Such consumer resistance has not only confounded analyst's puffed-up predictions but it has also had a profound and damaging effect on the financial fortunes and future expectations of several of the biggest players in the market.
Analyst's over-exuberant expectations confounded by those pesky consumers
Only two years ago, in 2014, BI Intelligence, the research arm of Business Insider, was confidently predicting that by 2018, Google Glass would be be a US$11 billion per annum business. Whichever glasshole came to that rosy-tinted conclusion had obviously not worn the device in a gent's lavatory in a biker bar.
All over the world there are drawers and cupboards that are the last resting places of abandoned activity trackers and items of clothing that were used or worn a few times and then thrown away and forgotten - the question is,'why?' Well, there are several reasons. To begin with almost all activity trackers require a user to have a smartphone if he or she is to take advantage of all the device's operational potentialities. So, that's two devices to tote around where there was just the one before.
Then there's the often pathetic battery life, the need constantly to recharge the devices, the upfront cost (for example, many smartwatches also need a smartphone to function properly and can be outrageously expensive in their own right even though they are in fact, little more than a pricey adjunct to a device that the user is already carrying) and there's the fact that some wristband wearables can be uncomfortable to wear, cause skin irritations and rashes and can easily be lost.
And then, last, but by no means least, there are privacy concerns about the data that is being passed from the devices especially when they are connected to social networks. There have been been several reported incidents of the widespread dissemination and publication of user's sexual activity and some apps not only transmit personal data but also private address lists to web servers on the Internet without either notifying the user or or seeking permission to do so.
When last year we said "this year" we really meant 2020, - obviously
Two companies, Apple and Fitbit dominate the sector and even mighty Apple has had its travails of late as it share price has fallen, but Fitbit has fared much worse. A year ago the company had a capitalisation of more than $10 billion, today it is down to $3.7 billion and the stock price remains under pressure not least because of a pending class-action lawsuit alleging that two heart-monitoring wristbands, the Charge HR and the Surge, are inaccurate and that may have contributed to cardia attacks suffered by some users of the devices.
And then there's Jawbone. The manufacturer of the UP wristband lost half its market value over the course of 2015. It plummeted from $3 billion $1.5 billion. A couple of weeks ago Jawbone did nonetheless manage to raise $165 million in new venture capital funding on that greatly reduced market value, and that , presumably, is a sign that investors continue to believe in both the company and the sector. The trouble is that these 'down rounds", as they are called in the money trade, have a serious effect on pre-existing shareholders who can only stand by and watch as the value of their stock plummets. This, in turn, hits confidence and so the downward spiral often gets and extra twist. Time will tell.
And, on the plus side, some analysts (though by no means all) are still bullish about the medium- to long-term prospects for wearable technologies, even though they are still wiping the egg from their faces after the last time they dipped them into the hype trough.
Jitesh Ubrani, senior research analyst at IDC commenting on the strange case of the delayed imminence of the consumer explosion of wearables said, “We recently revised our estimate because we don’t think it’s going to happen anymore. Basically, we don’t see this happening now until at least 2019.”