Maybe Fitbit can be more than just a niche exercise product

Fitbit might not be turning in the results of yesteryear, but riding the wave of Versa to beat analyst expectations demonstrates there might be mass-market appeal for the brand.

Total revenues stood at $299.3 million for the three months ending June 30, and while this is still considerably down on the $353.3 produced in the same period for 2017, it beats expectations from analysts. The success for this period has been attributed to Versa, the team’s attempt to break away from the fitness-tracking niche and enter into the mainstream smartwatch market.

“Our performance in Q2 represents the sixth consecutive quarter that we have delivered on our financial commitments, made important progress in transforming our business, and continued to adapt to the changing wearables market,” said CEO James Park.

“Demand for Versa, our first ‘mass-appeal’ smartwatch, is very strong. Within the second quarter, Versa outsold Samsung, Garmin and Fossil smartwatches combined in North America, improving our position with retailers, solidifying shelf space for the Fitbit brand and providing a halo effect to our other product offerings.”

Overall, Fitbit sold 2.7 million wearable devices across the quarter, with the average unit price increasing 6% year-on-year, primarily down to the newer product releases. Those devices released in the last twelve months accounted for 59% of total revenues, providing confidence in the brands ability to diversify from the niche which has served it so well through the underwhelming years for wearable devices.

Fitbit launched the Versa on 16 April and boasted about selling one million devices just over one month later. The product is more in-line with what you would have expected from a smartwatch device, moving beyond the fitness tracking niche Fitbit has become known for. Just looking at the device demonstrates the shift, though what’s on the device is what counts, as it features all the apps we have become accustomed to. It is a big move from Fitbit, and it looks to have worked.

Perhaps this is a positive sign for the wearables industry on the whole. For years, Fitbit appeared to be the only wearables brand which could survive as devices failed to meet the expectations of consumers. Maybe the consumer was not ready for the wearables craze, but the simplicity of Fitbits fitness trackers worked. In being able to move out of the niche and into mass-market appeal, this might be a sign the general public is ready to embrace wearables on the whole.

Looking at the share price, it is still way down on the peak from 2015, some 87%, but there have been signs of recovery across 2018. There is a notable dip in the last 5-6 weeks, though should Fitbit be able to maintain this venture into the mainstream market, we can only see the share price going up.

Fitbit Shareprice

Fitbit struggles epitomise uphill climb for wearables

Declining revenue for fitness tracker brand Fitbit is a perfect example of the fight the wearables segment faces in the battle to remain relevant in the super-connected era.

For years it seemed Fitbit was the only brand out there which could actually make money from the long-suffering wearables segment. The promise had been wonderful for the devices, but in reality, brands were constantly chasing the fictional pot of gold. Even Apple, with its legions of cult-like iFollowers, strained to make the technology lucrative, and it seems Fitbits run of good-fortune is lacking fitness.

For the last three months, Fitbit bagged $247.9 million in revenues, up slightly on analyst expectations, but quite a bit short of the $298.9 million generated during the same period of 2017. This compared to $505.4 million in Q1 2016 and $336.8 million in 2015. It seems the boomtime for fitness trackers has ended, but someone forget to tell the management team.

“The strong growth and defensibility of our business continues to be powered by product innovation, the network effects of our community, our expanding global distribution, and investment in our brand,” said James Park, Fitbit co-founder and CEO. “Based on the first quarter’s performance and momentum, we are confident about the remainder of the year, which is reflected in our increased guidance.”

Prospects for the rest of the year might well be good, but you can’t argue with the figures. The devices are simply not in high-demand as they were in yesteryear. Fitbit should be worried, as should the rest of the industry; if Fitbit can’t make the segment work, what hope is there for anyone else?

The smartwatch and overall wearables segment has struggled for years to make any meaningful impact on the technology world. In truth, there was little point to the devices; smartwatches did not do anything a smartphone couldn’t, and until recently, weren’t able to function without being tethered; consumers were not prepared to make the swap. There is little point in a smartwatch. However, Fitbit found a niche.

In creating an affordable device, with a specific purpose and targeted at specific audience, Fitbit discovered success. This was not a connectivity device, nor was it a fashion statement, it was simply a fitness tracker. It was a sensible strategy, as sportspeople are often open to spending on premium devices which serve a purpose. It was a niche and limited usecase for Fitbit, but it worked. Some might also have hoped the normalization of the technology in this niche might have created momentum for other, more profitable usecases focused on connectivity. But what does the latest dent in Fitbit spreadsheets mean for the segment on the whole?

We suspect the wearables euphoria was pumped too early. There are usecases for the technology out there, but it is by no-means going to be a revolution because the practicalities of the devices are lacking. Wearables could well make an impact on the communications world in the future, but we suspect this won’t be reality until the voice interface has taken hold.

Unless smartwatches offer something smartphones don’t, they will probably be viewed as a replacement. However, with the touch interface still commonplace, the screens on watches are not practical for everyday use. The voice interface is starting to gather some momentum, which could make the concept of a screen redundant when it comes to communicating (i.e. dictating messages, voice commands to answer calls, a virtual assistant reading out written content) and offer a place in the world for wearables.

Fitbit struggles should be viewed as a significant concern for the rest of the wearables segment. There might be a time for the devices, but now is not that time.

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A smartwatch that uses body heat to recharge – sounds too good to be true

We’ve never been convinced by the smartwatch trend, as it continues to disappoint month after month, but every now and then a feature crops up which might turn out to be quite useful.

PowerWatch will start shipping this month (November), and it has one feature which certainly has the potential to cut through the mundane noise which is being made by the other manufacturers; the watch runs off your body heat. Obviously there is an option to charge in the more traditional manner, but put it on your wrist and the battery will start to fill up depending on how many degrees is radiating from your skin.

The idea is based on thermoelectric power. The technology itself has been around for quite a while, though has been primarily used in very niche areas due to the cost/benefit ratio (i.e. there generally isn’t a positive one), such as the NASA space program. Matrix Industries, the manufacturers of the PowerWatch, has said due to the advent of low-power electronics, it felt it was the right time to use the thermoelectric technology for a consumer product.

And priced at $169, there is every chance the product could make a splash. Of course there are the standard features you tend to see on every smartwatch (calorie and step counter, sleep tracker, water resistance etc.), but we don’t really care about those; the body heat recharger is a genuine USP and you don’t see many genuine USPs in the hardware market anymore.

Just to be clear, we haven’t had a chance to look at the product, so any claims on body heat recharging are taken on the word of Matrix Industries, but should the technology prove to be successful, it could be the first step of a genuine breakthrough for mobile devices. Battery power and performance is an area which has seen little progress over the last couple of years, however incorporating these thermoelectric ideas into the any new design would certainly be of interest to various smartphone manufacturers around the world.

Obviously the power and performance demands of a smartwatch is nothing compared to a smartphone, however new ideas in the battery segment of the tech world are far and few between. This could be one worth keeping an eye on.

Ericsson jumps on the tetherless bandwagon

Ericsson has released new VoLTE based core network multi-SIM voice call functionality, to essentially allow operators to offer voice services on multiple SIM-based devices.

Could this be the breakthrough which smartwatches needed to make the move out of the wannabe camp? We’re still sceptical, but it is certainly a step forward when it comes to one of the biggest criticisms of wearables; why have one when they need to be tethered to a smartphone?

“We continue building new useful services for our installed base of VoLTE networks, to enable our customers to launch innovative consumer and enterprise communication services,” said Monica Zethzon, Head of Product Management Communication Services at Ericsson.

“With the new Multi-SIM for voice calls functionality, we support operators launching new attractive devices, which can also make high-quality operator voice calls anywhere, using the subscriber’s mobile phone number.”

Multi-SIM for voice calls functionality allows a mobile operator to offer a one number solution for multiple SIM based devices. Whatever the wearable device, if it is compatible with the multi-SIM technology, you could now share the mobile phone number already belonging to an existing smartphone subscription.

The technology is being deployed in more than 10 Ericsson VoLTE-enabled operator networks in Europe, North America and Asia Pacific right now, but the team has highlighted the potential is much wider. For operators that have Ericsson VoLTE /IMS deployed, the team has said it is just a software upgrade to their network which will be needed.

In truth, there are more use cases to talk about with the breakthrough of this technology, but for some reason people seem fascinated by the smartwatch. Other examples include those diptsticks who might be more prone to losing or breaking things (your correspondent will put his hand up there). Devices which could act in place of a phone, while a person is waiting for a replacement, would be very useful. Or how about elderly people for connecting in case of emergency situations. There are numerous use cases.

The idea of being tethered to your smartphone has always been a useful stick for the nay-sayers of the limping smartwatch revolution. This is certainly an answer, but we still have doubts for the technology.

What about messaging apps. Talking to someone on your smartphone seems to be a product of a by-gone age, as messaging apps soar in popularity. Have you ever tried to type out a message or read a lengthy one on a smartwatch? It’s tough. Perhaps natural language processing or voice recognition software could bridge this gap, allowing the user to listen to and dictate the message, but these are features which haven’t been plugged yet.

There are other bridges which need to be crossed before the smartwatch can be considered mainstream, for instance, when are they going to be as attractive as normal watches? While the watch might have started off hundreds of years ago as a useful tool, it is much more of a fashion statement now. Another point which Light Reading’s Iain Morris mentioned a couple of weeks ago on the podcast, is youngsters aren’t really wearing watches anymore. The next generation are the ones who are likely to fuel this revolution, but if they have no need for a watch, maybe it’s a non-starter.

It might be a case of tackling one problem at a time, but at least with this technology the idea of multi-SIMs might catch on. Smartwatches have 99 problems, but a tether ain’t one.

Tetherless Apple Watch set to launch for the lucky 32%

Apple has lined up its latest attempt to convince people there is value in smartwatches, but only if you are part of the lucky 32% who live in the right country, and have a contract with the right operator.

It is supposed to be the smartwatch feature we’ve been waiting for: built-in connectivity. It’ll cost you £400, but only if you’re an iLifer. The fact it has to be paired with an iPhone is less of a surprise, but only one which has a contract from an MNO which is partnered with Apple. Analyst firm Canalys estimate 68% of iPhones around the world will not have the right contract in place to make use of the smartphone sensation.

“The Apple Watch Series 3 is launching to a limited addressable market,” said Canalys Analyst Ben Stanton. “The total iPhone installed base currently sits at around 517 million. Of those, only 164 million are the right iPhones, with the right carrier, on the right tariff to work with the new cellular Apple Watch at launch.

“Apple’s potential buyers are spread across eligible and ineligible operators and contracts, and many will be disappointed. Apple needs to exert pressure on more carriers to make the required network investment before the buzz around its new product dies down.”

So who are the lucky few?

In the US, it’s all the big players AT&T, Sprint, T-Mobile and Verizon, but the devices will not support UMTS on Sprint and Verizon contracts. Bell is the only one in Canada, but again, not for UTMS. And to complete the America’s (as in feature availability), AT&T, Sprint and T-Mobile are available in Puerto Rico. Again, Sprint does not support UTMS here.

In Europe, the watch will only work properly in three markets; France, Germany and the UK. In France it’s on Orange, Germany its Deutsche Telekom and in the UK its EE. But once again, there in a blank column for UTMS in the UK. Switzerland has been noted for later in the year, but it doesn’t look like there is anywhere else for the moment.

In Asia, Japan has three options; au, NTT Docomo and SoftBank, with only NTT Docomo offering coverage on UTMS. Australia has Optus and Telstra, with the promise of Vodafone later in the year. The final market in Asia is China, where only China Unicom is eligible, but only for mobile lines opened in Guangdong, Henan, Hunan, Shanghai, and Tianjin. Beijing is a notable omission.

China Mobile and China Telecom are two which will come online towards the end of the year, though no details have been given. According to Ovum’s WCIS, that is 80% of the postpaid market missing right now, with China Unicom moving the wrong way in the market share rankings.

It hasn’t been the greatest start possible for the iChief, which has already had the product criticized for connectivity issues, with the device holding onto weak wifi signal as opposed to transferring onto the stronger, and available, 4G. The iPrime has unauthenticated wifi, but of course it was never going to be a problem with the software.

If the task of convincing iFollowers to part with £400, for a product which few people seem to have value in, was going to be a tricky task, but it might have just got a bit more difficult. Perhaps this is the reason Canalys were the ones to point out the limited functionality rather than the iBoss itself…

Of course there will be more partners and countries announced over the next couple of months, but it does seem to be a bit of a d*ck move from Apple. We wonder how many people will buy one only to discover their contract provider doesn’t support the device, or a lack of 4G coverage in their area means limited functionality.

IFA 2017 is more connected than ever

The world’s second biggest consumer electronics show is increasingly all about connected devices as IoT becomes endemic.

IFA has always been a strange event to report on, with sexy smartphones sitting incongruously alongside washing machines and other frumpy domestic appliances. But with the irresistible ubiquity of connectivity those two words are increasingly colliding in a more substantial way. IFA technically opens tomorrow, but just as with MWC most of the juicy stuff comes out early.

Samsung

As probably the world’s biggest consumer electronics company Samsung usually steals the show, but the big launch of the definitely-not-explosive-in-any-way-honest Galaxy Note 8 happened a week ago. Instead Samsung focused on wearables – specifically the kind of fitness-focused smartwatch that seems to be all the rage these days.

Gear Sport is the main offering in this category. Samsung has wisely gone for a circular form factor for this smartwatch and, apart from that and the usual suite of sensors and software designed to cater to the fitness obsessive’s every need, the emphasis is on ruggedization, including 50m water resistance.

The same applies to the more stripped-down Gear Fit2, which Samsung calls an ‘advanced GPS fitness band’. Both products have partnered with iconic pose-pouch swim brand Speedo to support its swim-tracking platform Speedo On, ensuring you can now humble-brag on social media about your trip to the pool too. Lastly there are some Bluetooth ear buds called Gear IconX. Watch the video below to get a sense of just how much of a better person you will be if you buy all this new Samsung stuff.

 

Smartphones

IFA tends to be where phablets are launched, and in the absence of the Note 8 the biggest news seems to be in the form of LG’s V30 6-inch flagship smartphone. The emphasis seems to be on video capture and playback. Claiming the first F1.6 aperture camera lens, the first glass Crystal Clear Lens, the first OLED FullVision display and Cine Video mode for producing movie-quality videos.

The phone, which also features some co-branding with premium audio brand B&O, seem to be well received and compared favourably to LG’s previous flagship effort. LG, of course, is also a huge CE brand so it has launched a bunch of other stuff, much of which will offer connectivity in the off chance we ever solve the smart fridge puzzle. Oh, and it looks like Sony and Huawei are among the other major brands to whack out new smartphones at the show.

LG V30

Smart assistants

One possible step forward for the connected home may be the current trend for devices to feature in-built support for smart assistants such as Amazon’s Alexa and Google Assistant. LG went big on this and seems optimistic that, while we’re still not prepared to delegate the weekly shop to the fridge, we may be happy to talk to it.

“The development of voice recognition technology plays an crucial role in advancing our own IoT and smart technologies,” said Song Dae-hyun, President of LG’s home appliance bit. “By adhering to LG’s Open Platform philosophy, we’re able to deliver a diverse range of benefits and services for our customers that is unrivaled in the industry. By strengthening our relationships with Google, Amazon and other players in this space, we’re making amazing headway in the Fourth Industrial Revolution.”

Plenty of other devices have been launched that support either or both of these platforms and that trend is likely to continue at CES next January. Apple’s Siri is notably absent from most of these announcements and it’s becoming increasingly difficult to see how Apple’s closed approach to these things can thrive in the very heterogeneous home appliance environment. Even Microsoft seems to have got the memo.

Mixed reality

Microsoft is offering a different take on virtual reality in the form of ‘mixed reality’. In theory this was expected to be a mix of VR and augmented reality – superimposing digital images on the real world – with some external motion-tracking tech thrown in for good measure.

Microsoft has been banging on about this for a while, and the price points are quite aggressive, but initial, appropriately mixed, reviews indicate it’s struggling to justify the hype. Nonetheless Asus and Dell have launched mixed reality products at the show as part of a general Microsoft love-in incorporating new PCs, etc.

Asus mixed reality

Fitbit finally launches a smartwatch in bid to reclaim wearables crown

Long-time wearables king Fitbit has belatedly got into the smartwatch game in a bid to fight back against Apple and Xiaomi.

As you would expect, the Fitbit Ionic comes at the smartwatch category with a distinctly health-and-fitness bias. A prominent feature is an SpO2 (peripheral oxygen saturation) sensor, which can apparently tell how much oxygen there is in your blood. This seems to be the sort of thing health/fitness fanatics like to obsess over so it’s likely to be a crowd-pleaser.

First and foremost Fitbit needs to make sure that side of things is beyond reproach and hopefully better than anything other smartphone vendors have to offer. But for this move into smartwatches to be a success Fitbit needs to ensure it’s at least adequate when it comes to other presumed benefits of such a device, such as smartphone syncing and contactless payments.

The Ionic runs on Fitbit’s own OS, presumably derived largely from the Pebble acquisition. Apparently it can receive smartphone notifications, but doesn’t really offer much in the way of further interaction. It does support contactless payments, but via Fitbit’s own pay service. Other USPs include longer than average battery life and an Adidas-branded special edition.

“With Ionic, we will deliver what consumers have not yet seen in a smartwatch – a health and fitness first platform that combines the power of personalization and deeper insights with our most advanced technology to date, unlocking opportunities for unprecedented health tracking capabilities in the future,” said James Park, co-founder and CEO of Fitbit.

Even if we take all that hyperbole at face value the Ionic faces the same challenge as the rest of the smartwatch category: providing sufficient utility to justify the price. At a price point of $300 it doesn’t significantly undercut its competitors and it lacks the reassurance of being aligned to a major mobile platform. Right now it’s not obvious why consumers should either pay the premium (basic Fitbit bands start at $20) or risk moving to an unknown platform.