The hype over smartwatches reached fever pitch three years ago, with plenty of industry and consumer buzz over the Pebble watch and the impending release of the Apple Watch. Today, few people even bother to wear a watch and even fewer have a smartwatch.

WHAT HAPPENED?

The challenge smartwatches had from the start had to do with two key areas. Firstly, there’ the issue of its small screen. As mobile phones got bigger and bigger, people got used to the idea of a large screen to interface with. But watch screens have serious limitations when it comes to how large they can be before it starts looking ridiculous.

Secondly, smartwatches are not standalone devices but are dependent on mobile phones for connectivity and thus, functionality. If you want to go jogging with your smartwatch, you have to also bring your phone along if you want to be alerted of messages or to stream some music.

These two challenges — the small screen and the reliance on a phone — naturally begged the question what utility can a smartwatch offer that we can’t already get from a mobile phone? Anything that a smartwatch can do, a smartphone can do better. So why would you need a smartwatch? The answer is you don’t. And that’s why the smartwatch industry is in a funk.

Pebble, the company that started the whole smartwatch craze couldn’t survive on its own and had to be bought up by Fitbit. Motorola and Jawbone have stopped making smartwatches. Fitbit and Samsung, both of which initially had great hopes for smartwatches, have barely made any impact in the market. Even poorer performing is the Android Wear operating system for smartwatches, which Google licences out to various watch brands.

There’s really only one player in town that has made any kind of impact: Apple. And even then, it’s arguable that the appeal of its smartwatch is not the fact that it’s a smartwatch but that it’s a watch made by Apple, a brand with super devout fans.

According to an industry report by research firm Canalys released earlier this year, 49 per cent of smartwatches sold in 2016 were made by Apple; 17 per cent by Fitbit; and 15 per cent by Samsung.

EVOLVING TO STAY ALIVE

Let’s look at the top players in the smartwatch space and see how they’re evolving in their bid to revive interest in this sector. Apple is doing two things differently. Firstly, it’s going back to basics when it comes to its Apple Watch functionality. Gone are the aspirations for it to be a smart device that runs all kinds of apps. Instead, it’s now focusing on two core features: message notifications and fitness tracking. That’s a smart move because frankly, that’s all people would really expect of their smart watches. They don’t want to run 101 different apps on a device where the screen is so small.

The other thing Apple is reportedly doing is equipping its watches with mobile network capabilities. This will give it Internet capabilities without the need to have an iPhone nearby. Then it would be possible to receive messages and to stream music without the need to be connected to a phone. That would make quite a lot of difference. While this feature alone might not necessarily be a game changer, it will make the device more independent and not a complementary device for the smartphone.

Fitbit has just released its second-quarter earnings report and sales of its watches are up 14 per cent sequentially from the first quarter of 2017. But that’s not necessarily good news. The amount is actually down 40 per cent year-on-year from the second quarter of 2016. As a result, the company reported a net loss of US$58.2 million (RM249million). So, it’s not in good shape even though it’s number two in the smartwatch space.

As mentioned earlier, Fitbit had bought smartwatch pioneer, Pebble, and is utilising that company’s software to bolster the functionality of its smartwatch. So, as Apple is narrowing its focus from an all-out app-centric device to something designed for message notification and fitness tracking, Fitbit is doing the exact opposite and trying to be more like what the Apple Watch was.

Fitbit CEO James Park told online tech publication, The Verve, that the company’s upcoming smartwatch will have an app platform and that it will be rolling out a software development kit (SDK) along with a select number of apps from specific partners. The SDK will eventually be available to all developers.

Google is a smartphone player too through its Android Wear operating system. While it makes its own smartphone —called The Pixel — it’s not really bothered to make its own smartwatch. Instead, it just licences out the operating system to various established and non-established watch brands.

Fossil and Tag Heuer are two established brands that make watches with the Android Wear operating system but their sales numbers are so small they hardly make a blip on the smartwatch radar screen. Meanwhile, some non-traditional watch brands like Motorola and Huawei seem to have lost interest in Android Wear. The fact that Google itself is not making its own branded smartwatch speaks volumes.

FUTURE OF SMARTWATCHES

In looking at all these developments, what can we expect for the future of smartwatches? I don’t think smartwatches will ever become a big device category on its own. People just aren’t wearing watches like they used to.

It will most likely be a nice-to-have rather than must-have device that some people will choose to wear — some for fashion purposes and some for fitness tracking but not really for telling the time because you can get that just by glancing at your phone.

Direct connectivity to mobile networks will probably become a standard feature. Once Apple introduces this, every other player will have to follow. As long as the smartwatch is seen as a device that complements your mobile phone, its sales will be limited. Having direct connectivity means that it’s possible to receive messages and stream music while you’re exercising, which may make the device attractive for fitness-conscious consumers because it means you don’t have to bring your phone with you when you exercise.

Over time, the phrase “smartwatch” will disappear and people will just call them watches — just like how nobody really calls a smartphone by that name anymore. We just call it a mobile phone or hand-phone because all phones are smartphones these days. And that’s probably what will happen to smartwatches too although unlike the smartphone, they will be far from ubiquitous.

Oon Yeoh is a consultant with experiences in print, online and mobile media. Reach him at oonyeoh@gmail.com

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