Smartwatches are still going nowhere

Smartwatches are still going nowhere

Apple Watch 6The Apple Watch is the only successful
smartwatch.
Hollis
Johnson

As earnings season wrapped up this week, one thing really stuck
out to me.

Just three years after we reached the peak of the hype
surrounding wearables and smartwatches, two of the most important
companies in the space reported diverging results.

Let’s call it “A Tale of Two Wearables Companies”:

  • Fitbit sold 3.4 million devices last quarter, down from 5.7
    million a year ago, the company reported Wednesday.
  • Apple’s story was the opposite. Although it doesn’t give
    precise numbers, the company said Tuesday that Apple Watch sales
    were up 50% for the quarter, likely fueled by cheaper models that
    weren’t available last year. (Research firm Strategy Analytics

    estimates Apple sold 2.8 million Apple Watches
    last
    quarter, meaning Apple is inching closer and closer to
    surpassing Fitbit in wearables.)

Take that as more evidence of what I’ve been
saying for years
: No one wants a “wearable.” They either want
an Apple Watch or something cheap and simple like a basic fitness
tracker from Fitbit or Xiaomi that they’ll stop wearing after a
few months.

Then, there are the failures. Companies like Samsung and LG have
hardly made a dent in the market. Meanwhile, Motorola has

given up making smartwatches
altogether. The buzzy startup
Pebble was
forced to sell itself
.
Jawbone is shutting down
and liquidating its assets. The idea
that the wearables can become a new kind of computing platform is
dead as developers abandon making apps for smartwatches and

pull their apps from stores
.

You get the idea.

Right now, we’re seeing three major approaches to smartwatches
and wearables, and none of them have a major upside.

Let’s break it down by company.

Fitbit: Living like it’s 2014

Fitbit announced Wednesday that it plans to ship its new
smartwatch in time for the 2017 holiday season. The news comes
after a slew of reports that said the company had delays
launching the device earlier this year.

But as Apple pares down the Apple Watch to focus on fitness
tracking, Fitbit appears to view its smartwatch as a new kind of
computer,
telling The Verge
the device will launch with a new app
platform. While we don’t have any specifics, we do know Fitbit
using Pebble’s old technology to help build out its software.
That didn’t work out so well for Pebble, and most other companies
have already learned that apps don’t make much sense on a
smartwatch.

Fitbit sounds like it’s about to make a last-ditch attempt to
fulfill the promise smartwatches had three years ago.

Fitbit Charge 2_businessstreet_0271_CMYKFitbit sales are declining.Fitbit

Apple: Back to basics

Even though reviews for the first Apple Watch were mixed and a
bit confusing, it seems like Apple has found its footing by
refocusing the Apple Watch on the tasks people actually want to
do: receive notifications, and track fitness. Apps have taken a
backseat, and the Apple Watch hardware has improved on the
fitness side thanks to waterproofing and the GPS for tracking
runs.

And, of course, there’s the Apple halo effect. The Apple Watch
makes a nice tie-in to the rest of the Apple ecosystem and keeps
you anchored to your iPhone. The company is also reportedly going
to ship a new model of the Apple Watch with a cellular connection
soon,
according to Bloomberg
.

Google: Going old school

TAG Heuer Connected smartwatchTraditional watchmakers like Tag Heuer now build
Android Wear watches.
Google/TAG
Heuer

Google appears to be going after a different opportunity than its
peers in the smartwatch world. While Apple and Fitbit want to
sell as many techie gadgets as possible and build out a platform,
Google is using its Android Wear operating system to power
watches designed by traditional watchmakers like Fossil, Tag
Heuer, and Movado.

It turns out, that’s a win for all parties involved. The
old-school watch brands have a new opportunity to repurpose their
designs and attract new customers with a smartwatch, and Google
can get its software onto more people’s wrists for those who
don’t want a geeky-looking device like the Apple Watch.

But, for a tech company focused on scale, Google will have to
figure out how to expand Android Wear beyond just a few brands.

Overall, we’re going nowhere

As the glow of wearables and smartwatches wears off and the
industry gets hot on emerging tech like augmented reality, we’re
still in the early days of the slow
death of the smartwatch
. And there’s nothing on the horizon
that will elevate the smartwatch from a nice-to-have gadget to a
must-have gadget.

Get the latest Fitbit stock price here.

Ron Kerr

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