Wednesday, April 23, 2014

Has the wearable bubble burst?

A few days ago Nike put the final nail in the coffin on its Fuelband wearable-technology. Laying off the majority of the digital hardware team and announcing it is exiting the wearable-hardware business.

This follows some recent news reporting that one-third of American consumers who have owned a wearable product stopped using it within six months. In a potential U.S market of approximately 45 million adults who are regular members of a gym, this must be a clear signal of an over-inflated 'need' in the market or perhaps that the world is not yet prepared to enter the age of wearable tech.

In this case both those ideas are likely not the reason and do not paint the entire picture. There are some re-occurring principles to be observed that extend beyond the Fuelband. Here are a few:
  1. Tech moves faster than any single company can adapt. At my organization, in a typical project our technical capabilities and options will refresh every 45-60 days. Meaning, how we plan to build something is usually replaced by a better way to build it before the project has been completed. This is the reason why we have remained hardware and software agnostic - we build on the latest and adapt/evolve during the process. This is echoed with Nike, which had  several hardware and software rapidly released for the FuelBand, as well as Samsung's Galaxy Gear which seems to release a new hardware option every few months; bringing me to point number two...
  2. Beware the hardware demand vacuum. With the release of new versions of wearable tech, the speed of the release rarely is an attempt to meet increasing demand. It is an attempt to improve the product. The result creates a false demand within the existing consumer base. This symptom has a sense of half-life, as new iterations decrease novelty and cause demand to collapse in the category - creating a vacuum within the existing market. Even though wearable technology is still within its infancy, this generation of consumer largely expects the product to behave and evolve as a mature product.
  3. Perpetual infancy of technology.   In the case of mobile, wearables, and the human interface (the Internet of Things) the industry will likely remain in a state of infancy longer than consumers are used to experiencing. Evolution in hardware and software will feel more like a revolution as the platforms and delivery of these experiences changes at an increasing rate. It is no wonder Google Glass continues down the Explorer path, as the yet-to-be market ready product has gone through nine software updates since its release just over twelve months ago. For Nike, a business built on apparel and shoes, we'll see their focus on software continue to support digital sports - a market they've also created. Their return to hardware will likely be delayed until the sensors and processors reach a size that allows for true wearable integration - within fabric or within the environment around us. Samsung will follow its path that helped it succeed in mobile - it will try, fail, try, fail, etc until it launches the wearable equivalent of the Galaxy, the mobile device that finally succeeded for them. Dozens of other players will continue to enter the market and keep everyone honest. The wild west will expand.
It is a seriously exciting era in technology, as we all figure out how to move beyond the rectangular limits of our smartphones, computer screens, and televisions. The promise of interaction with the world around us, pushing us back into our communities and physical interactions will continue to fuel the demand for seamless hardware and software.