What Fitbit's Declining Marketshare Means for the Wearables Segment
With the holidays and CES in our rear view mirror, the entire wearables industry has gleaned some fascinating insights that will undoubtedly affect the future. Among the most notable of those recent insights includes the 27.4 million smart wearables shipped during the holiday quarter, which is 126.9% more than was sold last year at the same time, according to IDC. Those types of figures make it very clear that the race is in full swing, and there are a few players that are rounding the track at a blistering pace as well as a stream of new entrants to the race. With worldwide demand for smart wearables incredibly strong, the market must not get complacent in order to continue growing and offering consumers actionable and meaningful feedback.
Even with that kind of growth, the same names that we’ve seen over the last few years continued to dominate with their first-to-market advantage, but with a slight twist. Fitbit was a clear leader, with the IDC figures showing the company shipped 8.1 million units in the fourth quarter of 2015 and enjoyed 29.5% of the market share. That’s quite a drop from the 43.9% market share Fitbit had in fourth quarter of 2014, illustrating how fast the market can react to new innovations in an emerging category. Following an earnings call, headlines were made recently as Fitbit revised expectations for the coming year. Revenue expectations were also pushed downward. As has been reported, Apple has been making headway with sales of the Apple watch, though many expected the venerable company to sell more.
There has also been increasing competition from vendors like Xiaomi, which focused on inexpensive fitness trackers to penetrate the Chinese market. With that strategy, consumers have solutions that can range from $11 for the Xiaomi Mi Band to $17,000 for the 38mm 18-karat Rose Gold Apple Watch Edition with Rose Gray Modern buckle (at the time of this writing). This disparity in price clearly shows that consumers have unprecedented options in functionality and aesthetics. All of these things can boil down to one thing: expectations.
We always hear about expectations within the context of articulating sales figures, shipments, demographics, and market projections, but it’s a telling word in a broader sense because expectations can be deeply personal. An individual person has expectations about nearly everything they come into contact with. Am I improving in my favorite sport? Does a small change in my workout routine yield the results I expect? How do I know? In order to meet an expectation and maintain motivation to reach a goal, it’s important to not only quantify progress in an easy and intuitive way, but to also make the data as actionable as possible.
The trend in the market as we currently know it began with Fitbit’s first tracker and provided simple measurements of the number of steps and flights of stairs we took. However, the concept was far from new. The idea goes back to 1770 with famous Swiss watch mater Abraham-Louis Perrelet. His self-winding mechanism was actually powered by a pedometer, and users could get eight days of usage with fifteen minutes of walking! Ten years later, an actual pedometer was developed, but it wasn’t until the 1960s that the modern era of electronic pedometers was in use. The early success of Fitbit shows the power of having an elegant interface and leveraging current technologies into something that anyone can use. Having a universally intuitive product has helped Fitbit become synonymous with tracking steps.
With Apple not lagging behind and also integrating pedometers into its iPods in 2009, the market has come to expect those types of features in new devices they were buying. A short six years later, we are living in an era where nearly anything can be quantified and tracked over time. Static dashboards with the day’s activities are commonplace for so many, and the market is beginning to show hunger for more. While it’s fine to know if I’ve hit my goal of 10,000 steps, it’s a very passive figure. I don’t know if there are things I can do to improve my stride to maximize my efficiency, or if I’m using my body in such a way that may cause undue strain and possible discomfort or injury. Can I glean insights related to other body systems? For example, does the number of steps correlate with improvements in my resting heart rate or recovery time which might lead to a decreased chance of cardiovascular health issues as I age? Can other variables be accounted for such as diet and alcohol consumption or smoking? With so much data available to us, the real innovation begins when the data works in an interrelated fashion and tells a user much more than how many steps have been taken in a day.
The concept of active feedback is one that is deeply ingrained into the team at Blast Motion. Our smart sensors analyze a variety of performance and efficiency metrics and allow a user to see the metrics correlated to a video highlight of the motion. We believe this is the fastest way to improve. Our sensors pair to your smartphone to capture video of you, and then the data is overlaid in real time. It’s like an automatic highlight clip reel of you playing your favorite sport. By seeing your action in slow motion, you can examine your movement and make small changes to get better. We’ve also introduced active feedback with suggestions on how you can improve. By measuring the best athletes in the world, we’re able to give you the advice that wouldn’t be available otherwise.
The recent headlines about both Apple and Fitbit clearly illustrate that the market is evolving and wants something more than a static dashboard with numbers. With the market evolving from niche and early adopter into more of a mass market, it will be critical to offer a variety of functionality in a pleasing aesthetic form. A one trick pony will not survive a more versatile opponent. Having “actionable intelligence” is the next frontier of this market segment and companies must empower consumers to achieve improved results in an easy, fun and intuitive manner. Even though the race has already started, a baton pass to the next innovator can happen at any time.
Michael J. Fitzpatrick is Co-Founder and CEO of Blast Motion, Inc., a start-up company founded in 2010 in Carlsbad, California. Blast has developed an innovative motion capture platform, which consists of industry leading sensor technology, an innovative suite of mobile apps and Cloud software.
Michael is the Co-Founder and CEO of Blast Motion Inc. a start-up company founded in 2010 in Carlsbad, California. Blast has developed an innovative motion capture platform, which consists of industry leading sensor technology, an innovative suite of mobile apps and Cloud software.