How the Apple Watch Sold the Wrong Product
The Apple Watch made a huge splash when it launched last year. It seemed like the perfect new device for Apple fans, with easy ways to see and respond to notifications, comprehensive fitness-tracking abilities, and quick access to Apple Pay. Even though we’re pretty enthusiastic about the potential of new forms of technology, it became clear pretty quickly that smartwatches aren’t yet smart enough to make them worth the investment for most users. And it seems that instead of making a compelling argument for the Apple Watch, the big marketing push that accompanied the device has just served to boost the popularity of another kind of wearable device.
As Lauren Goode reports for The Verge, data on how many wearable devices have sold in the United States reveals that consumers are interested in at least giving wearable devices a chance (since studies have shown that many users stop using wearable devices after a few months). According to recent data from market research firm NPD, spending on wearable devices by U.S. consumers nearly doubled from 2014 to 2015, with 13.4 million activity trackers selling in the U.S. in 2015, up from 7.2 million in 2014.
That adds up to $1.46 billion in sales in 2015, up from $692 million in 2014. The numbers are relatively small, as Goode notes, when compared to the number of smartphones that are used in the U.S. But it’s promising the data shows an uptick in sales even as the average prices of wearable devices jumped from $96 to $109.
But what’s even more interesting is the report’s findings as they relate to market share and category awareness during the first year that the Apple Watch was for sale. The firm found that the marketing around the Apple Watch increased people’s awareness of smartwatches as a category, but the availability of the Apple Watch didn’t hurt fitness trackers as much as might have been expected.
Goode notes that according to data from Juniper Research, the Apple Watch claimed more than 50% of the smartwatch market in 2015 — a market that, aside from the Apple Watch, has primarily “been driven by lower priced devices with more basic functionality,” ones which typically provide “basic notification and tracking functions, without an app-capable operating system on the device itself.”
But as awareness of smartwatches as a category increased — which NPD notes “bodes well for future growth once newer second-generation smartwatches with cellular connectivity” as well as “traditional watches with notification capabilities” are released in 2016 — smartwatches still lagged behind fitness trackers in terms of growth. While NPD estimates that there were almost 33 million fitness trackers in use by the end of the fourth quarter of 2015 (though it’s highly probable that not all of those were actually being worn), as compared to 13 million smartwatches.
Fitbit, which we reported mid-2015 wasn’t hurt by the introduction of the Apple Watch, still holds an impressive share of the activity tracking market, with 79% of sales as of early February. Fitbit is at the top of the fitness tracker market, not only because it’s one of the most-recognized names in the space, but also because it’s created a line of fitness trackers that aim to appeal to a much wider group of users than many of the other giants in the wearable world.
That includes Apple, which made people more aware of wearable devices, but ultimately has an expensive product that may price out users who want activity-tracking functionality, but are on the fence about the utility of true smartwatch features, like communication and smartphone notifications.
While Apple made a big splash with its marketing for the launch of the Apple Watch, the push seems to have done more to push wearables into the mainstream than to convince large numbers of users that the Apple Watch is worth the hefty investment. Some have worried that fitness tracking is eventually going to be reduced to an app or a feature on multipurpose devices like the Apple Watch, in the same way that the iPod and the Kindle were replaced by apps and native features on iPhones and Android smartphones. As the wearable market grows, it doesn’t seem that’s happening very quickly. But it’s also taking longer than expected to see which apps and device categories are the true must-haves of the wearable world.