In 2016 analysts were predicting a multi-billion dollar revenue for wearable tech developers like Apple designing devices such as smart watches and health trackers.
According to a report from IDC (International Data Corporation) shipments of smart devices are declining by over 50% each year due to the lack of sales to consumers. In 2015 multiple companies shipped 3.9 million products with only Garmin being successful in the market growth.
Jawbone is a fitness brand marker which originally started in the production of headsets and later on speakers due to low revenue from fitness brands being sold directly to consumers. The company has now shifted to B2B (business to business) providing services mainly to clinics and health centers working with patients.
Microsoft has removed all fitness band items from its online store because the inadequate number of purchases by consumers.
Fitbit still remains a successful brand in the development and distribution of fitness trackers and recently acquired ownership of the Pebble smartwatch. Despite remaining strong on fitness tracker market the company stated that sales during the Christmas period did not reach the company’s expectations.
The functions of wearable devices have the ability to monitor and measure heart rate, sleep, activity and count calories all which involve the most common usage of wearables which is counting steps. Experts speculate that purchasing fitness trackers to achieve the goal of 10,000 steps per day is actually worthwhile if they do not assist the user in losing weight.
Theo Axford, senior product marketing manager at Garmin UK, told the BBC that while the market had become “very competitive” the firm had not experienced declining sales.
“Brands must ensure that they are meeting the needs of the customer and always delivering value,” he said.
“Whilst the entry space has become largely commoditized, customers that have bought into the technology as a first foray into wearables are now looking for, and demanding more.
“The advocacy we’ve experienced for our devices over many years in what was a fairly specialist market has now become much more mainstream, and customers are looking for a brand with the specialist expertise and a legacy they can trust.”
In December 2016 Apple CEO Tim cook said sales were better than expected following the release of the Apple Watch 2 in September, and Android watchmaker Samsung showed the biggest growth year-on-year in IDC’s report.
“The smart wearables market is changing,” said Ramos Llamas from IDC.
“Health and fitness remains a major focus, but once these devices become connected to a cellular network, expect unique applications and communications capabilities to become available”.
“This will also solve another key issue: freeing the device from the smartphone, creating a stand-alone experience.”