Fitness trackers are just like gym memberships, ignorable

9 Jul 2015

A new report on fitness wearables appears to show how similar they are to the market they have tried marginalising: gyms. It seems that, just like gym memberships, consumers are more than willing to snap up a fitness tracker, before losing interest after a few months.

The AP report looks at how certain users last six months with devices like the Fitbit, then lose their excitement once the novelty of step counting and sleep monitoring wears off.

A research firm has even claimed that up to a third of these trackers get disposed of within half a year.

“Presently, this is the largest criticism of wearables – that the devices are abandoned after six months by the majority of people,” said Malay Gandhi, of healthcare investment fund Rock Health.

Indeed, through looking at Fitbit’s own statements, whereby active users of the devices – those that have recently logged in or paired the device with a smartphone – rose to almost 50pc at the start of 2015, Gandhi suggests that leaves 10m devices gathering dust somewhere.

“Or stated differently, more than the total number of devices sold from 2009 to 2013 combined,” he said. “Based on the S-1 alone, it cannot be definitively stated that the great majority of Fitbit devices sold before 2014 are no longer used, but any other conclusion seems improbable.”

Fitbit is the brand used as an example because it’s the main player, representing the largest market share of fitness trackers around. That may all chance with the advent of the Apple Watch, but even still, this paints a picture of an unsustainable marketplace.

If people aren’t using their trackers, it has a knock-on effect in that the products (a) will stop being recommended to friends and family, (b) be less visible and therefore lose some marketing powers or (c) upgrade to a new model when it comes out – which is the key business model in the smart technology world.

They also won’t pay for premium subscription packages, a potential growth area for Fitbit, said Dan Ledger, who tracks wearable devices at Endeavour Partners, in AP’s report.

This all seems to point towards the Apple Watch as something that could pioneer a new approach. There are two major revenue streams for smartphone makers, selling the product and selling the software. The latter can prove infinite in the form of apps.

Largely, fitness trackers can do none of that, operating at a level pretty much identical to how you bought them. The Apple Watch, however, is an app machine. Fitbit has claimed it is targeting new features as a way to strengthen its position atop the wearable pile, but will that be enough?

By the way, it’s beyond some people how any smartwatch is convincing enough to purchase, as the inclusion of apps and similar operating systems in smartphones merely means you carry two devices at once.

That means wearables may well spring into life with products like Jawbone’s, or Fitbit’s or Apple’s, but could then fade away in terms of significance. Look at tablets, for example…

Either way, the wearables market is so young it’s impossible to predict with any great accuracy what way it will go. But it’s fair to assume that the divergent path between those with swathes of apps and those without will be key.

Gordon Hunt was a journalist with Silicon Republic