Tuesday, November 21, 2017
News Roundup

Wearable devices are unlikely to be big sellers, analysts say

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Is wearable tech already wearing thin?

Despite hype for upcoming products from Apple, Google and Samsung, a number of analysts say Internet-connected personal devices such as smartwatches and fitness bands — so-called wearables — will be hard pressed to reach the same sales heights as smartphones and tablets.

That's because nearly every selling point for wearable tech — a smartphone alternative, a better system for fitness tracking and a link to other Internet-connected devices — might not have broad appeal, some analysts say.

"If all you're doing is saving me the trouble of getting my phone out, that's not going to be enough," said Jonathan Gaw, a wearables analyst at International Data Corp. "You need to do more than that."

Still, amid signs of a slowdown in smartphone sales and pressure to come up with the next big thing, tech companies are jumping on the wearable tech trend. Many analysts expect Apple, Google and Samsung will roll out wearable tech products in the next 12 months.

But Parks Associates analyst Harry Wang predicts that at best, smartwatch sales will top out at about 120 million around 2018 — a far cry from smartphones and tablets. More than 1 billion smartphones and more than 195 million tablets were sold last year.

Analysts say the best hope for wearable tech is exercise.

"Wearables are primarily about health and fitness, tracking activity and making use of it," Canalys researcher Daniel Matte said. "It's tough to say that's the entirety of it, but it's fair to say that's the majority of it."

But fitness tracking could be a tough pill to swallow — a recent Endeavor Partners study found that nearly a third of fitness tracker users stop using their device after six months.

And the other selling point, a smartphone extension, won't persuade consumers to shell out hundreds of dollars for another gadget, analysts said.

For companies already in the wearable device marketplace, improving sales and retaining customers comes not from better fitness-tracking technology, but from the ability of a device to change behavior.

"Our average user isn't fit. They're overweight," Fitbit CEO James Park said. "That's really driven how we think of product development over time."

The 7-year-old Fitbit has no plans to compete with universal smartwatches, Park said, and believes it can expand by narrowing its focus to health-and-fitness-related features.

Park said Fitbit will have a place at the table despite increased competition because consumers have a solid grasp on what the device is used for.

"We strongly believe there's no one-size-fits-all for the (wearables) market," he said.

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