Comment: Fitness Bands And Smartwatches Are On A Collision Course

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A number of disturbing trends running through 2016 when it comes to wearable tech like smartwatches and fitness bands.

While the former continues to fail to deliver the mainstream growth initially promised (and expected) of it, the latter continues to grow – even if 30% of Australians no longer use their device.

According to the IDC, the fitness tracker market is still growing while the smartwatch market is under “tremendous” pressure as sales decline.

The lack of growth in the smartwatch market has even forced players like LG and Motorola out, with execs saying “Wearables do not have broad enough appeal for us to continue to build on it year after year.”

Fitness bands accounted for 85 percent of the wearable market in 2016 and experienced double-digit growth while research group IDC says full-blown smartwatches are only achieving “modest category growth”.

Australian retailers are said to be cutting back on their smart watch ranges due to poor sales as a result of this trend.

However, something that’s interesting here is the way that the major players in these two markets are iterating on their products.

This year saw Apple launch Series 2 of their Apple Watch, with the company putting the health and fitness features of the device front and center – even going so far as to launch the fitness-focused Nike Plus model of the product.

Meanwhile Fitbit, the top player in the fitness band space, has launched their new FitBit Blaze with many of the same features users might expect out of a proper smartwatch. It’s got a touch screen, supports both push notifications and audio control. It’s even being branded a “smart fitness watch” by the company. What’s more, with FitBit now having acquired the tech behind the Pebble smartwatch, this process looks like it’ll only escalate future FitBit products further in this direction.

While part of this trend is due to the inability of smartwatches to find a “killer-app” that justifies their expense and makes an argument for them beyond just responding to notifications and answering phone calls. We’re several years into the category, but nobody has quite cracked it open yet. There are plenty of companies making smartwatches that are nice to look at, but very few making devices that customers “simply have to get”.

Though they started in very different places, the two markets are quickly converging on the same potential customers with inordinately similar products and feature-sets. Going forward, you have to wonder whether there’s only room for one of these categories. As fitness bands accrue more software-side complexity and smartwatches start to push for more durability and fitness-focused tech, the overlap between the two categories seems destined to end in one cannibalizing the other.

The only question is which. In the absence of that breakthrough moment, smartwatch-makers are picking a fight with the fitness band industry – and it’s not necessarily one they’ll win.
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