Not that long ago, smartwatches were supposed to be the next big thing in consumer electronics, but today, this industry as a whole is facing a lot of issues. Sales of connected watches are decreasing, as the industry research firm IDC is estimating that the market declined by more than 51% during the third quarter of the year. Despite being the overall leader in this segment, Apple posted the second biggest annual decline out of all the major players in the industry. The Lenovo-owned Motorola experienced the largest year-over-year sales drop during the last quarter and recently decided against releasing another Android Wear wearable in 2016, just like both Huawei and LG did. On the other hand, the Tizen-powered Samsung watches were relatively stagnant during this period. Finally, Pebble, the pioneer of contemporary smartwatches recently closed up shop after being acquired by Fitbit. In overall, the wearable industry as a whole is declining at a rather rapid pace, and no consumer electronics manufacturer seemingly knows how to combat this trend.
Are consumers simply not ready for smartwatches? Most relevant studies suggest that the situation isn't that simple. Yes, the average consumer still isn't willing to pay top dollar for a wearable, but much more importantly, they aren't impressed by them. It's not like people fear or abhor the idea of owning a smartwatch, at least there's no indication that they do. However, looking at the products delivered by the industry in the last couple of years, it's not hard to pinpoint a reason for this global consumer apathy. Every fitness tracker, smart band, and smartwatch released since early 2015 has been relatively similar to both its predecessors and successors. Sure, the design varies, and latest devices boast a bit beefier specs and maybe a heart rate sensor, but that's pretty much it. Most of the innovation in the smartwatch segment in the last two years comes down to a single sensor. There's nothing new being offered.
First contemporary wearables that hit the market came packed with fitness software and some secondary features which made suggestions like when to take a break from exercising, what to eat, and how long to sleep. The latest and greatest smartwatches – do that exact same thing. We've been hearing stories about intelligent digital life coaches for years now, but for the time being – these promises only resulted in a few smartwatch apps which send you motivational messages like "Congratulations, you've walked five miles today." Most people probably won't find these digital coaches too innovative and revolutionary, and they certainly won't think of them as intelligent.
Furthermore, the battery life of contemporary smartwatches still hasn't improved. Save for the recently discontinued Pebble lineup which "cheated" a bit by using an e-paper display, all other wearables on the market struggle to operate for more than a couple of days on a single charge. While most smartwatches released this year packed somewhat beefier batteries in comparison to earlier models, this change made little difference in practice. Finally, all of the wearables currently available on the market are either overly reliant on smartphones or are unsuccessfully trying to replace them. The Samsung Gear S3 is advertised as a device that allows you to "leave your phone behind." Of course, getting users to actually do that is a completely different problem, but even if you do, you're leaving them with a device that's just a tiny, heavily limited smartphone. Smartwatches were supposed to be at the forefront of the Internet of Things revolution, but instead, the user adoption of smart devices is now being driven by connected speakers like the Google Home. Why? Probably because they're doing their own thing and they're doing it reasonably well. In addition to that, connected speakers are actually capable of operating without smartphones, but also aren't trying to replace them. So, while smart speakers are slowly earning the image of helpful tools, wearables are still tied to the perception that they're just gadgets. Somewhat interesting and occasionally useful, but still – gadgets.
So, until smartwatch makers decide to invest more in research and development and start delivering devices that are more than just expensive fashion accessories which you have to charge five times per week, the wearable industry will likely either stagnate or continue to decline. Alternatively, consumer electronics manufacturers could also opt to follow Garmin's strategy and start producing highly specialized and specifically targeted wearables. However, if everyone's adopting the same approach, that still probably won't lead to innovation in this struggling industry, and innovation seems to be the only thing that can revive it. As things stand right now, consumers aren't terribly excited by the idea of owning a smartwatch simply because they've already seen everything they have to offer back in early 2015. So, in order for the smartwatch industry to grow again, manufacturers must do something to combat consumer apathy, and again, there's no better tool for that than innovation.