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If all of the companies that make activity-trackers were on some sort of leaderboard right now, who would be winning the race?
None of them.
The news yesterday that Nike had laid off members of its FuelBand division, and may not release future versions of the device, underscores the challenges players in this space have faced — and will face. Companies large and small are grappling with ways to cram a variety of sensors, batteries and other components into a device that offers enough value to not be tossed into a drawer after a month.
Lark, which started out as a maker of activity-and-sleep-tracking wristbands, just introduced a personalized coaching app that runs on Samsung’s new Galaxy S5 smartphone. But Lark no longer makes Larklife, its clunker of an activity-tracking band, having discontinued it not long after it launched in December 2012.
“We decided to become a software company deeply tied into the sensors on smartphones,” said Julia Hu, Lark’s founder. “Hardware is very hard. There are global supply chain and manufacturing issues at play, which are largely out of your control, and it’s capital-intensive.”
And it is getting harder, not easier, for wearable makers, because they are getting serious competition. Smartphones can increasingly pull off much of the functionality of wristbands, migrating those features into consumers’ pockets and driving down demand for stand-alone products.
Notably, Apple’s iPhone 5s includes the M7 coprocessor that enables motion sensing, which a series of app developers have already taken advantage of.
“The activity tracker market is pretty well commoditized by phones and the software apps,” said Malay Gandhi, chief strategy officer at the Rock Health accelerator and investment fund. “We already have tracking devices that most of us carry around with us all the time, so investing a ton into hardware when there’s already a platform,” often makes little sense.
Sonny Vu, the creator of the jewelry-like Misfit Shine, concurs — even though he’s in the business of selling activity trackers. “Much like MP3 players and GPS devices, which are single-purpose hardware devices, trackers are basically going to get subsumed or conflated into multipurpose hardware, like the iPhone,” he said.
To be sure, there are limitations with smartphones as health trackers.
Unlike certain water-resistant wearables, you can’t use phones to measure the distance you swim. You also can’t continuously monitor your pulse, as you can with a wristband.
So it’s very possible there will be niche markets for dedicated health trackers – say, for serious athletes and people with particular medical conditions – but it’s not at all clear how big those markets will be, Gandhi said.
The dirty secret of wearables
Perhaps the biggest challenge for stand-alone wearables remains proving their long-term value to consumers.
An online survey by Endeavour Partners last fall found that one in 10 of those above the age of 18 own an activity tracker. But the longer someone owns a tracker, the less he or she uses it. The research firm found that more than half of those consumers no longer use the devices – with a third dropping off within the first six months of ownership.
The science of sustained use involves a jumble of factors, including design, comfort, ease of use, lifestyle compatibility and overall utility. A single issue can halt usage, including limited battery life, a difficult set-up process, a clunky sync experience –or, obviously, a rash.
Fitbit learned this only too well with the Force, which it was forced to recall five months after it hit the market, when nearly 10,000 customers complained of skin irritations. It prompted at least one lawsuit, on top of what is surely an expensive recall effort.
Psychology comes into play as well. There’s a giant body of research into what really motivates humans and how they form new habits – much of which is not the domain of developers and engineers. Merely feeding people activity information doesn’t cut it.
Misfit’s Vu points out that, while watches are an old category, wearable electronics are relatively new — as are the teams behind them. “There’s no team with, say, 20 years of experience making wearable technology right now. So everyone, including us, is still learning.”