6 reasons why Apple Watch will kill activity trackers (and 6 reasons it won't)

Will the Apple Watch, along with other smartwatches, make dedicated activity trackers obsolete Or, at a minimum, will they severely stunt the future growth potential of fitness trackers And what does it all mean for people planning to buy their first wearable to track exercise and sleep

To answer these questions, we rounded up relevant market research and solicited input from Apple Watch owners and users of dedicated activity trackers. First up, the market research. (And if you're looking for excuses, err, reasons to wear both, read "Why you might want to use an Apple Watch AND a Fitbit.")

Depending upon the websites and publications you read, it can seem like Apple's Watch is either a "Newton-like failure" (according to Inc.) or a $1 billion success (Mashable.com). 

If you go beyond all the clickbait headlines, however, you find some experts who believe Apple's smartwatch is just getting started, and that it will take time to gain more widespread traction. In fact, a Global Equities Research analyst told CNNMoney in June that Apple Watch is on track to be Apple's most successful product debut, topping initial sales during the early days of the iPod (in 2001), the Phone (2007), and the iPad (2010). 

[Related: Why Apple Watch is a business traveler's best friend ]

"Apple's product debuts tend to follow a well-worn script: A first-generation device is always criticized as overpriced and a bit lacking in utility and is often vulnerable to the charge that it is a solution in search of a problem," writes The New York Times State of the Art columnist Farhad Manjoo, in reference to the Apple Watch. "Then, over a few years, Apple and its customers figure out the best uses for the gadget, and the company methodically improves design and functionality to meet those needs. It also tends to lower its prices. Correspondingly, sales explode."

Meanwhile, Fitbit's recent IPO was a success, and the manufacturer of activity trackers reported its first profit in 2014. For its latest quarter, Fitbit told analysts in early August that it had sold 4.5 million tracking devices, and the average selling price for a Fitbit device rose from $63 a year ago to $88, according to The Wall Street Journal.

Fitbit owns 85 percent of the entire activity tracker market, according to its CEO James Park, who spoke with The New York Times. The overall worldwide wearable device market is also thriving, with 11.4 million devices shipped in Q1 2015, up 200 percent from the same quarter of 2014, according to International Data Corporation. (IDC is a sister company to IDG, CIO.com's publisher.)

Another IDC report estimates that 72.1 million wearables will ship in 2015, up 173.3 percent from 2014. Between 2015 and 2019, wearables will experience a compound annual growth rate of 42.6 percent, IDC predicts. 

Here's where things get interesting. The IDC report also estimates that by 2019, worldwide shipments of "smart wearables," including the Apple Watch, will eclipse "basic wearables," defined as any device that doesn't run a third-party app, such as a Fitbit. In 2019, basic wearable shipments will see year-over-year growth of 76 percent, while smart wearable growth will increase by a whopping 683 percent year over year. 

Based on studies like the ones cited here, you might conclude that, yes, Apple Watch and other smartwatches will eventually dominate the wearables market. Dedicated activity trackers will still see growth — but for how long

The recent history of consumer technology offers possible clues. For example, smartphones helped kill, or at least severely limit, demand for basic video camcorders (RIP, Flip!), point-and-shoot digital cameras, portable GPS devices, and low-end MP3 players. Exceptions in each of these categories exist, of course; GoPro has been successful with its mountable action camcorders, and Apple's iPod touch just received a major product refresh. Still, history shows that, in general, consumers tend to prefer one device that does multiple things instead of buying, recharging, and carrying specialized devices. 

We contacted 12 consumers who regularly wear an Apple Watch, or a Fitbit or other dedicated activity tracker, and requested feedback. Of those dozen sources, seven voted for the Apple Watch, and five say they prefer dedicated trackers.

Here are six reasons why the majority of sources favor the Apple Watch over fitness trackers.

1) Smartwatches offer more functionality than activity trackers

"One of the best parts about my Apple Watch is it tells me every hour to stand up and move around," says Crystal Stranger, Enrolled Agent (EA) and president of 1st Tax. "I also can leave my phone on silent and my Watch tells me when I have a text or call. These small conveniences really add up in your day and give so much more than just an activity tracker would."

2) Apple Watch is an all-in-one gadget

"Consumers crave all-in-one devices," adds Andrew Tropeano, host of NewsWatch. "When a smartwatch comes out that can replace their activity trackers but also last more than 24 hours, the decline of the activity tracker will begin. But don't expect companies like Fitbit to go down without a fight. Some of the market leaders in the activity space will most likely produce their own versions of a smartwatch that can compete with Apple and Samsung."

3) Apple Watch integrates with other iOS devices

The "Apple ecosystem is all interconnected," says author Michael M. Hughes. "If you have an iPhone already, why get a fitness tracker that doesn't integrate Having everything tied together — fitness tracking, timepiece, messages and alerts, email, phone, payments, etc. — just makes things easier and eliminates a lot of friction."

Hughes adds that he replaced his Fitbit with an Apple Watch, and he is "totally satisfied. I'm especially looking forward to seeing what developers will do with native Watch apps in the fall. That will really open up the possibilities of the Apple Watch."

This type of integration is a key reason why Apple Watch will eventually prevail, according to Edward Riefle, founder, PostalZen. "People don't want to have 10 different kinds of chargers and 10 different devices. They want convenience."

4) Endless possibilities for smartwatch features

The Apple Watch has a significant advantage over fitness trackers thanks to the potential for even more useful features down the road, according to Bob Pluss, CFO and user experience lead for Race Roster

"I can program my Apple Watch to open my garage door as I finish my bike ride. The Apple Watch prevents me from fully reading emails or text messages on my phone as often as I used to, eliminating a typical workout distraction," Pluss says. "The notifications for texts and email act as a quick filtering system on how important a message may be while not requiring me to read through it at that moment. Additionally, since buying an Apple Watch, I've taken phone calls in the middle of a bike ride without having to stop my workout."

(Race Roster, a developer of software that "empowers a community to gather, move and fundraise" through organized endurance events, recently purchased Apple Watches for all 40 of its staffers.) 

5) Apple Watch is more motivational than fitness trackers

"Filling the circles [the visual representation of three "Activity" metrics] has become an obsession for many Apple Watch early adopters," says Rob Samson, practice lead for Web and mobile applications, nfrastructure. "As a former Fitbit user of many years, I find the simple visual cue in the corner of my watch face to be a far more motivating reminder than my Fitbit step-count ever was."

6) Apple Watch could detect and prevent serious illness

Apple thinks a smartwatch's activity tracking should not just be about standing and moving; it should also be about preventing serious illness, according to Rajeev Kapoor, health practice partner, A.T. Kearney. Apple's open-source ResearchKit is designed to let developers create iOS apps for medical research and diagnostics that use sensors in iPhones and Apple Watches. By comparison, dedicated fitness trackers haven't "positioned themselves for prevention," Kapoor says.

Of the 12 sources we interviewed, five say they prefer activity trackers to the Apple Watch. Here are six reasons why.

1) You don't have to worry about damaging an expensive smartwatch 

Voiceover artist Sam Swicegood currently wears a Microsoft Band. "It's a bit more discreet and convenient [than an Apple Watch]," he says. "And I feel like if I accidentally drop or hit it against a handrail when taking the stairs, I won't be out an absurd amount of money."

2) Fitness trackers are less obtrusive

"I'm a guy who enjoys the look and feel of a traditional watch, so smartwatches have no appeal to me," says Jake Lane, growth analyst for LawnStarter "I like my Fitbit Charge because, while it's a piece of technology, it can be worn with nearly any attire without looking too out of place. An Apple Watch doesn't have the same capabilities, and it's pretty obvious what it is."

3) More ways to wear activity trackers

"If I were just getting started with activity tracking today, I'd likely use a dedicated activity tracker over a smartwatch," says Sarah Pike, content contributor, HighSpeedInternet.com. "I'm not a serious athlete and want to monitor my fitness activities with a non-bulky device like a clip-on fitness tracker. Also, in terms of apparel, smartwatches can't be hidden well and don't always match every outfit. Small fitness trackers can be clipped on the interior of a waistband, a pant leg, or even on a bra strap."

4) Dedicated fitness bands are less expensive, more rugged 

"If someone is just starting out, and they're serious about tracking their fitness, I'd suggest a dedicated fitness band," says Jason L. Bauman, SEO associate for Trinity Insight. "Some of the Apple Watch's features, like the circles for working out, are cool, but I think the durability and relative cost of fitness bands makes them the better investment."

5) Activity trackers will likely become less expensive, perhaps free

"Fitness trackers will become substantially cheaper in the coming years," says Luis Rincon, cofounder and CEO, Wearables.com. "Xiaomi's entrance with a $13 band [the Mi Band] is proof of this. Thus, fitness trackers will continue to be the more accessible fitness wearable for the mass market, especially as devices that we see offered around $99 slip closer to $49." In addition, Rincon predicts "a future where employers and health insurance companies offer you an activity tracker at almost no expense," in exchange for permission to collect health-related data.

6) Fitness trackers have better battery life

"Until smartwatch makers figure out how to match battery life to that of activity trackers, many consumers will prefer to keep their Fitbit, Jawbone, or Misfit," Rincon says.

Ultimately, it's likely that "fitness enthusiasts will continue to use dedicated activity trackers," according to Pluss. "But the general public will opt for built-in fitness tracking on something like an Apple Watch. A good analogy would be the continued use of SLR cameras for hobbyists and enthusiasts of photography, but the mass public opting for the use of their built-in camera phones for much of their photography."

Pluss adds that the Apple Watch "will displace and take market share from fitness trackers." However, the high price points and different consumer needs will leave room for dedicated activity trackers to survive, at least for now. "The cost [of an Apple Watch] at the moment will stop some people. And since you need to carry your phone with you to take advantage of many of the features of the Apple Watch, this will put off some hardcore fitness users."

(Again, if you're looking for good reasons to wear both gadgets, read "Why you might want to use an Apple Watch AND a Fitbit.")


James A. Martin

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