Smartwatches are in their adolescence right now: They’re not quite new, but they haven’t yet become what they should be. Like a teenager, there’s a lot of promise for this product category, but much of it is unrealized because the major players in this space – Apple, Samsung, Fitbit, Fossil, Huawei and others – haven’t quite figured out how to make their products stick with the mainstream consumer.
In a recent New York Times column, Nick Bilton wrote that smartwatches are maturing slower than most analysts thought they would, citing a prediction from research firm IDC that stated smartwatches would be mainstream by 2018. In light of slow total sales growth and stagnant innovation for smartwatches, IDC has pushed back that initial estimate.
“We recently revised our estimate because we don’t think it’s going to happen anymore,” Jitesh Ubrani, senior research analyst for mobile devices at IDC, told Bilton. “Basically, we don’t see this happening until at least 2019.”
Investors who have bet big on smartwatch manufacturers don’t necessarily need to panic yet, and those who want to jump on this trend shouldn’t be dissuaded by underwhelming sales figures. But what needs to happen for Apple, Samsung, Fitbit and the other companies in the smartwatch fray to break through and make their products a consumer staple?
Become a standalone product or price differently
One of Bilton’s key criticisms of smartwatches is that almost all of them require a smartphone to unlock their full potential. This means that a consumer will have to shell out hundreds of dollars for a smartphone, and then pay nearly the same amount for a smartwatch that offers some additional functionality.
The Apple Watch costs $349 for the lowest-end model and can cost up to $17,000 (you read that correctly) depending on what accessories and features you get with it. As Computerworld reported, previous incarnations of the Samsung Gear watches cost between $300 and $350. Most consumers don’t really see why they should pay that much for these products.
“A lot of consumers have tried out smartwatches, and they don’t see the need for them right now,” Ubrani explained. “This is mainly because they only offer notifications for your smartphone. And more importantly, you’re paying the same price for a smartphone.”
But even the more affordable models have their flaws. According to BBC, Fitbit’s new Blaze smartwatch costs $200, which is great for a consumer who is interested in smartwatches but doesn’t want to pay a lot for the accessory. The problem is that it is seriously lacking in features that consumers expect from a smartwatch. The app ecosystem for the Blaze is miles behind what Apple and Samsung offer, and Fitbit could be in major trouble if people decide they’re willing to pay extra for more apps.
The challenge for all three companies will be to find a way to untether the performance of their smartwatches from the need to be coupled with a smartphone. If smartwatches can’t stand on their own two feet at a reasonable price point, it’s unlikely they’ll have significant staying power.
Give people a reason to keep wearing it
People who own an Apple Watch are very likely to own multiple devices – smartphones, tablets, laptops, etc. But if you asked them which one they would ditch if they had to give one up, it’s almost a given they would pick the watch.
“Since I started wearing one after it launched last April, it just hasn’t become an integral part of my life. Unlike my phone, if I left it at home one day, I wouldn’t drive back to get it,” Walt Mossberg, editor at The Verge, explained in a column.
Let’s not be overly harsh on the Apple Watch – it’s hard to imagine even its biggest competitors like Samsung, Fossil or Fitbit faring much better. The problem, according to both critics, is that there just aren’t enough uses for a smartwatch that make it worth wearing, especially if you have your phone on you. Other than an easy interface for general fitness tracking and quick access to text and email notifications, most smartwatches and their arsenals of apps don’t really add enough value to anyone’s life to be worth holding onto.
Beyond that, the general performance of the big smartwatches on the market today needs a serious upgrade: Samsung Gear S2 smartwatches drain their batteries in a hurry, while Apple Watch has been docked for slow loading speeds. Fitbit, on the other hand, has faced criticism and lawsuits because users found that the fitness trackers were inaccurate. All three companies have new models coming out soon, and if they don’t want this new generation to flop, these issues need to be resolved.
Close the smartwatch gender gap
Nicola Fumo at Racked looked at research from NPD Connected Intelligence and reported that one in 10 adults in the U.S. owns a fitness tracker, with 54 percent of that group being women. And yet, 71 percent of smartwatch owners are male. So the research shows that women really do want wearables as accessories, but smartwatch makers are largely failing to reach them. Why?
According to Fumo’s analysis, a key reason is in the design of the products. Most smartwatches have big straps, bulky faces and color schemes that are classically “masculine” in their build. But even in the watches designed specifically for women, Fumo noted that “sad gender stereotypes” like thin straps, sparkly jewels and tame pastel color schemes didn’t really solve the core problem that smartwatches have: women don’t typically find them good accessories.
Smartwatch manufacturers could also be missing out on higher profits by not focusing on the female market. In December 2014, First Insight ran its consumer predictive analytics on smartwatches and found that women were actually willing to pay more than men for certain smartwatches.
Wearables are often referred to as fashion-tech, and right now, most of the leading manufacturers are leaning too heavily on the latter, which will turn fashion-conscious women off.
Apple, Samsung and Fitbit need to get smarter about smartwatches
As an investor, it’s sometimes easy to get caught up in the hype surrounding a new product or technology and let that sway your decision-making. Smartwatches have certainly generated a lot of fanfare, and it’s possible – maybe even probable – that they catch on with the masses.
But if you’re looking for a real investment opportunity, you need to cut through the noise and see which company is actually in the best position to sell watches and build a loyal fanbase. The ones who can bring functionality and design together in accordance with what mainstream consumers want will be the winners here.
This article was written by Greg Petro from Forbes and was legally licensed through the NewsCred publisher network.