Last year, in this space, we predicted that the biggest story in wearables in 2016 would be industry consolidation. We saw some prominent financial exits in 2015 – Fitbit chief among them – and Apple’s entry into the market, and realized that smaller and less-committed companies would get squeezed out, closed, acquired, or just absorbed.
That’s exactly what happened.
The carnage was wide and pretty ugly. Skully, Pebble, and Basis all ceased to exist. Microsoft dumped its band. A new version of Android Wear was pushed off into the new year, and the maker of the most popular Wear-based watch – Motorola – took its product off its roadmap. Sensor maker NXP, whence comes everyone’s NFC chips, was sold to Qualcomm, and the motion-sensor company Invensense is being bought by TDK.
Intel is worth a book of its own. A big-mouthed leader in wearables because it missed the mobile revolution, the company spent a lot of 2016 saying “Never mind.” Now it’s chasing the IoT and VR markets after buying stakes in visor Recon and Vuzix, neither of which shipped a new product this year. A certain degree of focus appears to be lacking.
As far as wristwear goes, it was a story of Be Big, Be Cheap, or Be Gone. Fitbit’s stock is ailing (starting the year at $30 and sitting below $8 as we post this) and the Blaze was a misstep, but it’s got a fresh product line, a roadmap, a good brand, and money in the bank. People argue a lot about Apple, but the Apple Watch continues to sell briskly, if not as well as detractors and fanbois think it should (whatever that means.) Garmin’s brilliant market segmentation continues, and Samsung is the boxer who just won’t stay down.
There are lots of other products, but aside from those four companies, we’re seeing global shipments being dominated by companies that can get their bill of materials cost down to commodity levels.
Things were a bit sunnier on the enterprise side of the street. Actual use cases and industrial case studies started to emerge, although too many companies are still holding details too closely for competitive reasons. Epson announced and may be shipping a new version of its Moverio binocular visor and there are persistent rumors that Google may not be done with this market. Atheer and ODG are shipping good products as an industrial and enterprise software infrastructure continues to grow.
So do we believe the Death of Wearables story that much of the media has been trying to sell for the last few weeks? Hell no. Just as the media built up the wearables business without understanding it, it’s tearing it down for much the same lack of understanding. There’s plenty of running room yet in some interesting places, and we’ll talk about what’s going to happen in our Year Ahead post next week.