Smartwatches aren’t dead; they’re just taking a timeout

Despite the demise of Pebble and pessimistic forecasts, smartwatches aren’t going away. Not exactly, anyway.

Smartwatches aren’t dead; they’re just taking a timeout

December hasn’t been a good month for the smartwatch sector. Pebble, the remarkable Kickstarter-fueled smartwatch success story valued at $740 million as recently as last year, was sold off to Fitbit for just $40 million. IDC’s latest wearables report indicates that smartwatch sales have “tumbled.” And Gartner noted, once again, that almost a third of smartwatch purchases are not being used

Add it all up, and it’s easy to conclude that the smartwatch market is toast—that people just aren’t interested in wearing multifunctional computers on their wrists. 

$40 million ain’t chump change 

I don’t think that’s really what’s happening here, though. Look beyond the headlines, and you see signs that it’s not the concept of smartwatches being rejected, but the style, performance and usability of today’s offerings that are not up to snuff. 

First of all, Pebble selling out to Fitbit feels like a defeat because it is. But a $40 million payday for a company that started as a crowdfunding idea is still a big deal, even if it’s a far cry from what folks thought it would be at the height of the smartwatch hype. That shows at least some interest in the smartwatch. 

Unpacking IDC’s smartwatch research 

Here’s what Jitesh Ubrani, senior research analyst for IDC Mobile Device Trackers, said in the press release about the findings in its Worldwide Quarterly Wearable Device Tracker

"It's still early days, but we're already seeing a notable shift in the market. Where smartwatches were once expected to take the lead, basic wearables now reign supreme. Simplicity is a driving factor, and this is well reflected in the top vendor list as four out of five offer a simple, dedicated fitness device. Meanwhile, from a design perspective, many devices are focusing on fashion first while allowing the technology to blend in with the background." 

There’s a lot going in that paragraph, so let’s unpack it a bit. 

First off, Ubrani notes that the smartwatch market is still young, and we’d all do well to remember that before making pronouncements about its future. 

Second, he calls simplicity “a driving factor” in wearables, but I would suggest the smartwatch industry’s real problem isn’t too many capabilities, but not enough sophistication in making those functions simple and fun to use. Smartwatches are, obviously, very small devices, and it remains a real challenge to build functionality and usablity into such tiny form factors. Despite giddy manufacturer claims, there’s still a loooooong way to go in that area. 

Third, Urbani notes that “many devices are focusing on fashion first while allowing the technology to blend in with the background." Well, duh! These are watches—worn on your wrist, a location where folks have spent huge amounts of money to adorn themselves with status symbols that don’t function as well as plastic alternatives costing orders of magnitude less. That dynamic doesn’t disappear just because you can get text notifications on the darn things.

My smartwatch is in a drawer, next to 10 other watches I own 

If you keep that in mind, Gartner’s reminder that some 29 percent of smartwatch purchases aren’t currently being used is not all that surprising. In fact, if you put it in context of how people use their watches, 29 percent doesn’t seem that high.

I don’t know about you, but I’ve got about a dozen watches in a case on my dresser, but I actually wear only three or four them in any given month (many of the others sport dead batteries, need a new band or have been superseded by a similar device I like better.) 

The point is it never really made sense to think people would buy one smartwatch and wear it every day. 

The future of smartwatches

So, what’s really happening here? Two things, I think. 

First, as I’ve written again and again, today’s smartwatches still aren’t very good. They’re ugly, hard to use and provide limited advantages over the smartphone you already carry. For the smartwatch category to fulfill expectations, the devices have to get a lot more functional and hassle free—not having to charge ‘em every night wouldn’t hurt. I believe that will happen, but it’s likely to take longer than most people think. 

Second, as I have also noted multiple times, tech companies may not be the ideal emissaries of the smartwatch revolution. Instead of Apple trying to reposition its mobile expertise on your wrist, it may make more sense for traditional watch companies to integrate smart capabilities with their existing products or to somehow retrofit existing timepieces with new functionality

That approach may not be ready for prime time either, but in the long run, that’s how I expect the smartwatch market to finally find its footing.

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Copyright © 2016 IDG Communications, Inc.

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