High Abandonment Rates Indicate the Need for More Compelling Value Propositions to Drive Greater Adoption
What’s the short term trajectory for fitness wearables? DOWN.
Analyst Gartner is projecting a dip in overall shipments next year, owing to overlapping functionality between different types of fitness wearables and because smartwatches are eating into their functionality (while also offering more in the way of communications features).
But the analyst expects the fitness wearables category to bounce back in 2016 because of better, more versatile designs and lower cost displays. In other words, fitness devices are going to up their game.
In a global forecast on fitness wearables, the analyst projects shipments will reach 68.1 million units in 2015, down from 70 million in 2014, as a larger proportion of buyers opt for smartwatches instead (it estimates that half of people considering buying a smart wristband will purchase a smartwatch instead next year — which is, of course, when Apple is expected to launch into the space). But by 2016 it sees shipments bouncing back — to total 91.3 million units.
Gartner segments the fitness wearables category into five main form factors: smart wristbands, sports watches, other fitness monitors, heart rate monitor chest straps, and smart garments.
While smart wristbands and other fitness monitors are currently the most popular form factors, the analyst identifies the latter emergent category as having the “greatest potential for growth” being as it’s emerging from the testing phase.
It’s projecting shipments here will grow from practically nothing (0.1 million units) in 2014, to 26 million in 2016.
Gartner adds that it expects continued overlap in functionality between smart wrist bands and smartwatches, but sees fitness bands and other fitness monitors carving out a non-retail niche in the future — by being increasingly offered by gyms, wellness providers, insurance providers, weight loss clinics and employers, sometimes at subsidized prices or for free.
It said it expects a quarter of these fitness devices to be sold through non-retail channels between 2018 and 2020.
“These companies will serve as a growing distribution channel for device manufactur
ers,” it adds.
“The new channels also result from fitness monitors being integrated into employee badges or identification bracelets for access control. Business-to-consumer companies will have rewards or gamification linked to the use of wearables as a way of keeping customers engaged with their brands.”
A key driver for fitness wearables to continue to proliferate, according to Gartner, are the big funding initiatives from the likes of Apple (HealthKit), Google (Google Fit), Samsung (S.A.M.I.), and others, which will allow consumers to integrate data from multiple wearables into a single account where it can be analyzed and yield useful insights for the wearer.
Wearable Electronic Fitness Devices Market Still Poised for Strong Growth
Wearable electronic devices for fitness shipments are forecast to reach 68.1 million units in 2015, down from 70 million units in 2014, according to Gartner, Inc.
This temporary dip in sales will be driven by an overlap in functionality between smart wristbands, other wearable fitness monitors and smartwatches. However, the market for smart wristbands and other fitness monitors will rebound in 2016 because of versatile designs and models with lower-cost displays.
“Fitness wearables are used for tracking health, which goes hand-in-hand with fitness and wellness,” said Angela McIntyre, research director at Gartner
“Consumers will be able to integrate the data from most wearables into a single account where their data can be analyzed using cognizant computing to provide useful insights to wearers.
Funding initiatives from Qualcomm, Apple (HealthKit), Google (Google Fit), Samsung (S.A.M.I.), Microsoft, Nike and Intel, among others, will build on early innovation in wearable fitness and health monitoring and create the infrastructure for merging data relevant to health and fitness.”
The five main fitness wearable form factors are
- smart wristbands,
- sports watches,
- other fitness monitors,
- heart rate monitor chest straps
- smart garments.
Sports watches and chest straps are well established, compared with smart wristbands first popularized by the Jawbone Up, which launched in 2011. However, Gartner believes that the smart garment product category has the greatest potential for growth going forward because the category is emerging from the testing phase and smart shirts are available to athletes and coaches of professional teams. Smart garment shipments are forecast to grow from 0.1 million units in 2014 to 26 million units in 2016 (see Table 1).
– Table 1 —
Worldwide Wearable Electronic Fitness Devices Shipments Forecast, 2013-2016
Source: Gartner (October 2014)
For the present, however, smart wristbands and other fitness monitors are the most popular form factors.
“Smartwatches having retail prices of $149 or more will typically have the capability to track activity and have accelerometers and gyroscopes similar to their smart wristband cousins,”
said Ms. McIntyre. “The smartwatches differ from smart wristbands in that smartwatches need to display the time and have a user interface oriented around communication. However, some smart wristbands have the ability to display and send text messages. The overlap in functionality between smart wristbands and smartwatches is expected to continue.”
Gartner further predicts that in 2018 through 2020, 25 percent of smart wristbands and other fitness monitors will be sold through nonretail channels.During this time scale, smart wristbands and other fitness monitors will be offered increasingly by gyms, wellness providers, insurance providers, weight loss clinics or employers, sometimes at subsidized prices or for free.
These companies will serve as a growing distribution channel for device manufacturers. The new channels also result from fitness monitors being integrated into employee badges or identification bracelets for access control.
Business-to-consumer (B2C) companies will have rewards or gamification linked to the use of wearables as a way of keeping customers engaged with their brands.
More detailed analysis is available in the report “Forecast: Wearable Electronic Devices for Fitness, Worldwide, 2014.”
The report is available on Gartner’s website at http://www.gartner.com/document/2882518.