They started with consumer smartwatches and treated the enterprise as an afterthought. It should have been the other way around.
Three years ago, smartwatches were expected to quickly evolve into a bona fide and thriving mainstream electronics category. Instead, they are mainly just wrist-based delivery systems for smartphone notifications, as well as fitness companions. (Other uses include news updates, phone calls, alarms, email, looking at pictures and videos, navigation, controlling music and home automation, according to NPD Group.)
The early success stories are crashing and burning.Motorola has exited the smartwatch market. Pebble shut down in December. Jawbone did the same in July.
Intel, which had acquired the wearables firm Basis, shut down that company and exsted the smartwatch and fitness tracker space completely.
Fitbit sold 2.3 million fewer devices last quarter compared with the same quarter a year ago, the company announced this month.
By offering a standard, open platform for any smartwatch company to build upon, Google’s Android Wear platform was the darling of the industry when it launched nearly three and a half years ago. Fast forward to today, and Apple’s proprietary Apple Watch running watchOS dominates, with Samsung’s proprietary Tizen a distant second. Android Wear brings up the rear.Strategy Analytics said that during the first quarter of this year, Apple owned 57% of the market with its Apple Watches, while Samsung and Google are battling for scraps with 19% share with Tizen and 18% Android Wear. (Gartner says Apple will stay on top until at least 2021.)
Companies are cagey about numbers. But it’s very likely that most or all smartwatch makers are losing money. Leaders Apple and Samsung don’t mind. Smartwatches bolster smartphone platforms and customer loyalty.
Kantar Worldpanel ComTech reported that as of December, just 15.6% of U.S. consumers owned a smartwatch or fitness band, barely higher than the year before (compare this to the 77% of Americans who own a smartphone). Fewer than 10% of European consumers own smartwatches.