Within a handful of months of Fitbit’s multibillion dollar IPO in June 2015 comes a report from Argus Insights foretelling the precipitous fall of consumer demand for wearable technology just weeks ahead of the start of the 2015 holiday shopping season.
The first chart illustrates Argus Insights’ sobering forecast on wearable demand since reaching a peak in January 2015 — part of the 2014 holiday shopping frenzy. In fact, wearables from Fitbit, Garmin, Jawbone and Misfit Wearables marketed heavily in Sunday newspaper ads and via online promotions in late 2014 to bolster sales with the theme of gifting loved ones with the promise of health. I’ve included ads from Amazon which promoted gifting “head-to-toe tech,” Walmart, advertising Fitbit next to the Guardians of the Galaxy DVD, and Best Buy, with a “get paid to trade” an unused activity tracker for a credit, along with selling the Misfit Shine as a favorite gift under $100.
For this analysis, Argus analyzed over 300,000 online consumer reviews dating back to January 2012.
Argus notes that in the midst of the growth curve phase for wearables came news of the Apple Watch’s launch, which causes what the analyst calls “a large loss in mindshare for Fitbit” for smartwatch buyers who might perceive the leading activity tracking brand as a substitute for an Apple Watch.
“The large jump in demand in January (2015) left the wrists of interested adopters full – mostly with new Fitbits,” Argus observes.
In mining consumer reviews online between June and July 2015, Argus sees Fitbit continuing to lead consumer demand, but a loss of interest in all fitness bands after six months. While fitness is the top reason people buy fitness bands, there’s growing interest in using a wrist-worn device for checking news and sending messages — neither of which any one of the Fitbit devices can currently do.
Argus notes that Fitbit and the competitors in the activity tracking space are all investing in R&D to expand their devices’ capabilities in the new smartwatch era.
Health Populi’s Hot Points: The market demand chart by wearable company details the data “below” the first line graph by brand, illustrating that Fitbit’s dominance sustained between June 2014 and July 2015, but appears to be declining at roughly the same rates as Garmin, Jawbone, and Misfit.
The Apple Watch will be a wildcard in this forecast over the coming months. In the meantime, the 2016 Consumer Electronics Shows looms in January 2016 in Las Vegas. The latest Consumer Electronics Association report on consumer digital tech was pretty bullish on wearables as a booster for 2015 holiday sales. Argus Insights’ analysis disagrees. Watch this space as we continue to reconcile this gap between the industry advocacy group and the sobering analysts at Argus.
Tomorrow, I will write about wearables on Main Street – contrasting my walk down Chicago’s Michigan Avenue where I saw health everywhere, and my colleague Carol Torgan’s experience the same weekend at a county fair in Virginia. See Carol Torgan’s Pinterest page on Wearables, which will keep you current with this growing, chaotic market segment.