Research

Why wearable tech isn’t taking off, and what tech companies can do about it

Why wearable tech isn’t taking off, and what tech companies can do about it

A July 2015 report by the analytics firm Slice Intelligence confirms what some experts already suspect: the Apple Watch is flopping. According to Slice, sales for Apple’s first smartwatch have dipped significantly since its debut. The report suggests that Apple is selling about 5,000 Apple Watches every day in July—a sharp decline from April, when the company was selling around 35,000 watches per day.

apple watches sold by day
Photo credit: Slice Intelligence

Although the report isn’t comprehensive—Apple doesn’t share sales figure for the Apple Watch, and Slice’s report is based on email receipt data alone—it highlights challenges facing wearables today. While Apple and market leader Fitbit are receiving a lot of media attention, it appears that the wearable movement isn’t resonating with the mass market. In Apple’s case, Apple Watch isn’t getting the same reception as past blockbusters like the iPad, which quickly outsold existing tablets in the market and sold 100 million units within two and half years.

As for Fitbit, it just completed a successful IPO in June 2015, but studies show that many customers eventually abandon the company’s fitness trackers. About a third of trackers get tossed out within six months, according to research firm Endeavour Partners. Rock Health, a healthcare investment fund, also claims that only half of Fitbit’s 20 million registered users remained active with their devices as of the first quarter of 2015.

In fact, a recent article in The Atlantic examines why customers are quitting their Fitbits—a phenomenon it cheekily labels as “Fitbitterness”:

The disillusionment may be due, on the one hand, to the fact that many of the devices currently on the market—particularly the ones priced around $100, which are often given as gifts—track steps at the exclusion of other fitness activities, making them incompatible with weight training and Crossfit and other trendy fitness activities. There’s also the fact that all those data can take the fun out of fitness. As The Atlantic’s Olga Khazan put it, reviewing a Fitbit-like device that claims to track users’ posture, the experience is basically “that of having a tiny, overbearing mother always on your person.”

Another significant hurdle for wearables is design. Fitbit and Jawbone have significantly improved the look of their products, but people still call them “ugly.” Apple Watch is by far the most fashionable wearable in the market, but its software design isn’t immune from criticisms.

Ultimately, the failure of wearables to capture the imagination of the market boils down to one simple but critical issue: lack of usefulness. “In terms of utility, it’s hard to use, and not solving meaningful problems,” one recent Fast Company article says about the Apple Watch. Some Apple fans claim that they check their phones less often because of their Apple Watches, but not everyone is convinced that that’s a compelling reason to buy the $500 product.

As for fitness trackers, many users say they stop getting surprising and valuable information after a few months of use. One Fitbit user sums it up nicely: “For someone who is not physically active, I think it will be useful. But once you get to a state where you are happy with the activities you do, it loses its efficacy.”

idc-wearables-2015

Photo credit: IDC

The wearable market is growing significantly, with 72 million units of wearable devices expected to be sold in 2015, an increase of 173 percent from 2014. But companies can’t afford to ignore the market’s abandonment problem. Investors want to see consistent growth—something that’s hard to achieve if customer satisfaction is low. To drive growth, companies in this space need to figure out what tech shoppers—perhaps the pickiest and most fickle of all customers—want from their gadgets. In the competitive tech space, tech customers want more than novelty—they want products that add value to their lives. Engaging in a two-way dialogue with tech customers will help companies identify features that aren’t only sexy but are actually useful.


Tweet this!Tech customers want more than novelty. They want products that add value to their lives. (CLICK TO TWEET)


It’s too early to call Apple Watch a failure, but its sales slump demonstrates how in today’s tech industry, brand reputation alone won’t drive sales. As it develops new versions of its smartwatch, Apple will need to build a deeper understanding of the tech customer. If Apple wants to win the high-stakes wearable tech race, it needs to bring value to the daily lives of customers.

Learn more about the competitive tech landscape. Download the white paper Winning the Tech Race: How Empowered Customers are Redefining Success in the Tech Industry.



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