Wearables have been at the peak of their hype curve this year, but they will face a reality check in the second half of 2014. They are good attention grabbers for big brands like Nike and Samsung, but so far the form factors are immature and, for most consumers, of limited practical use. As Nike’s decision to kill off FuelBand ‘ one of the earliest and most famous wearables ‘ shows, this is a sector which will have to grow up quickly and painfully, so the products with real commercial potential can emerge.
Nike will still play in the fitness tracking business, but purely with its software, which mainly runs on iOS. It will cease to produce the wearable gadgets themselves, which will leave Apple as the primary vendor of hardware and sensors supporting the Nike+ apps (there are only a few for Android, and the key application, Nikefuel, is iOS-only). That will be a boost for iDevices among health fanatics, and has also prompted speculation that the two companies might enter a more formal partnership, perhaps with Nike powering a specialized Apple tracker device or the long-rumored iWatch.
That speculation is fuelled by existing ties between the two firms. Apple CEO Tim Cook, who sometimes wears a FuelBand, sits on Nike’s board of directors, and Nike+ Move was the demonstration app at the launch of the iPhone 5s, with its M7 motion coprocessor, which offloads movement tracking work from the main CPU. And the Japanese firm has a history of partnering with device makers (the Nike+ game for Microsoft Kinect, for instance, or a GPS watch with navigation specialist TomTom). As CNET pointed out, the man who launched Nike+ Kinect, Jay Blahnik, now works for Apple.
So the plot thickens and Nike’s reluctance to develop for Android ‘ it has said there is no development of NikeFuel ongoing for non-iOS platforms ‘ also points to closer ties with Apple.
Such an alliance would be part of the consolidation which is affecting the wearables market even in its infancy ‘ particularly the segment which has acted as its early bellwether, fitness trackers and smartwatches. There is sure to be shake-out among the many trackers available from specialist firms, such as Jawbone, Garmin and Fitbit, especially as mainstream brands like Samsung get in on the act. Some have already been acquired, such as Basis by Intel.
But other vendors, like Sony and LG, appear to have delayed launches, and there is a recognition that these wrist-based products are currently a niche. They either have to be so cheap that consumers purchase them without thinking as smartphone accessories, or they have to have broader usefulness, and probably to be uncoupled from the handset sometimes, offering functions for which their form factor is optimized (Samsung is working on Gear models with their own connectivity).
The main function of the smartwatch has been to provide a relatively simple way for vendors to experiment with how wearables work in the real world, in terms of the components needed, the power consumption, and the way consumers actually use them. That intelligence will feed into a new generation of far more useful wearables, including those for vertical markets as well as consumer toys. Nike was never a device company ‘ like Amazon, it is a brand which sells hardware when that can drive sales of its core product. “The tech is a means to an end,” Sam Poser, an analyst at Stern, Agee & Leach, told Bloomberg. “It’s not tech for the sake of tech. It is, ‘What can we do to enhance our brand and enhance the customer experience?’
That is even more true of the products which are difficult for everyday users to wear, such as smart glasses and virtual reality headsets (as seen in Facebook’s recent Oculus buy). For all the fuss about Google Glass, which went on sale this week, it is an experiment with which the search giant can try out new apps, developer relationships and search mechanisms in the real world rather than the labs, as part of its persistent quest for what will define the next wave of user experience and web interaction ‘ an evolution Google badly needs to drive.