In the sports and fitness technology industry, comparing a dedicated fitness device with a smartwatch has historically been a comparison of apples with oranges – no pun intended. Today, millions of consumers are in fact viewing most health and fitness monitoring devices relative to the Apple Watch, and in majority of cases, the Apple Watch is superior.
Product dynamics in the market
The smartwatch category is the single biggest threat to the future growth of sports and fitness devices. It also happens to be more than five times larger in annual revenues. Based on hardware, software and ecosystem, smartwatches have a higher relative value, due to sophisticated multifunctionality, extensive third-party app development, and seamless integration with a broader ecosystem of devices that play a central role in the daily lives of consumers. The innovation cycle is also much faster for smartwatches, due to inherent scalability, and implies that these devices are only going to become better. Battery life is now sufficiently good for general daily use, and emerging connectivity types, such as low-power-wide-area-network, support untethered usage, without compromise on performance.
Are the oranges doomed?
The short answer is that some are, and others are not. Legacy companies in this market continue to fight for dedicated health and fitness devices, and at least trying to give companies like Apple a taste of their own medicine. In recent years, products developed by companies such as Garmin, Polar and Suunto have aimed to provide a personalized fitness experience through adaptive training using artificial intelligence. In addition, non-sport features such as music and payment have been added to increase the relative value of dedicated devices to that of smartwatches. Uniquely, Garmin has managed to sustain and grow its relatively compact ecosystem for its smartwatches, and now invests heavily to make smartwatches its next cash cow. The cannibalization effect on Garmin’s dedicated sports devices is unknown, but certainly there. In summary, some product tiers or categories of dedicated devices are poised for strong growth due to an evolution that resembles the smartwatch experience, while Garmin seems to be betting on a smartwatch future. Surely there are other aspects to the narrative of dedicated sports and fitness devices. For instance, highly specialized use-cases for outdoor watches remain protected from disruption or convergence.
IHS Markit, now part Informa Tech, has just published its latest research on sports and fitness technologies, which includes global analysis of eight product categories, including three new segments: smart sportswear; smartwatches; and sports hearables. Quantitative data is available at a country level for more than 20 countries and regions, along with competitive analysis for each product market. Along with a highly detailed database of data, this research includes a PDF report containing insights on artificial intelligence, sales channels, health apps, technology trends, connectivity and much more.
If you are interested in learning more about this research, please send an email to Roeen.Roashan@ihsmarkit.com.