As the market for Fitness trackers continues to grow, research group Gartner has revealed that 30% of Australians who purchased a device in the past are no longer using their device.
This has seen Companies such as Jawbone an early pioneer in the fitness market stop selling their product online, Fitbit, the market leader who has recently moved to acquire Pebble is also having to rethink their business model to grow show in a market that is under pressure.
According to IDC the fitness tracker market is still growing while the smartwatch market is under “tremendous” pressure as sales decline.
Total wearables shipments reached 23 million in Q3.
Basic wearables, primarily comprised of fitness bands, accounted for 85 percent of the market and experienced double-digit growth.
Much of the increase was attributed to the launch of newer models and an expanding user base.
IDC expects the momentum for basic wearables to continue for the remainder of 2016.
The weak spot is smart wearables, those capable of running third-party apps, IDC claims that this category will likely continue to struggle in the near term.
“It’s still early days, but we’re already seeing a notable shift in the market,” said Jitesh Ubrani senior research analyst for IDC mobile device trackers.
“Where smart watches 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.”
“Smart wearables have been down in recent quarters, but clearly not out,” noted Ramon Llamas, research manager for IDC’s wearables team.
“As user tastes change, so will their needs. That’s the opportunity for smart wearables with multi-functionality and third-party applications, both for consumers and business users.
To get there, we need to see more intuitive user interfaces, seamless user experiences,
standalone connectivity, and applications that go beyond health and fitness and into personal and professional productivity.”
When it comes to market share Fitbit is the clear leader at retailers such as JB Hi Fi and Harvey Norman.
The Company who recently released the Charge 2 which is a long-awaited refresh for the Charge HR is now working on their long-term strategy.
IDC expects Fitbit to continue leading the pack in the near term. The acquisition of Coin and the potential to expand into the smart-watch category via the acquisition of Pebble present an opportunity for the company to be more than just a fitness brand.
Xiaomi’s Mi Band has also proved to be a popular product with consumers, sold at discount retailers such as Big W this device includes heart rate tracking and is priced well below any competition.
It has been described as more suitable for impulse buying than any other fitness band.
Garmin who captured the third position is not as popular with consumers as Fitbit despite the company spending millions on advertising and marketing in Australia.
This is despite the Company having one of the widest portfolios among all the vendors in this market.
The Company believes that their prime target audience are fitness die-hards.
Now the Company is trying to improve their image with the launch of the Fenix Chronos which is having to compete head on with the new Samsung Gear 3 which is a significantly superior product and half the price of the Garmin offering.
Overpriced when compared with new Samsung Gear 3
Apple’s decision to launch its second-generation watches in mid-September, toward the end of the quarter, did contribute to its year-over-year decline in the quarter.
IDC claim that the primary reasons for the downturn was an aging line-up and an unintuitive user interface.
Though both issues have been addressed with the latest generation watches, Apple’s success will likely be muted as the smart-watch category continues to be challenged.
Samsung released two new models, Gear Fit 2 and the Icon X, in Q3. Around the globe, the company was able to move large volumes of its latest wearables thanks to bundles offered with the Note 7 and other Samsung smartphones.
Though the Note 7 was recalled, many consumers were allowed to retain their Fit 2 or Icon X.
Bundles aside, Samsung was able to sustain shipments of its Gear S2, particularly the SIM card-enabled versions, through various wireless service providers.