Apple and Android are destroying the Swiss Watch industry

In Q4 2017 – essentially during the last holiday season – market research firm Canalys found that more people bought Apple watches than Swiss watches. Two million more, to be exact. Brian Heater has more data but this news is quite problematic for the folks eating Coquilles St-Jacques on the slopes of the Jura mountains.

The numbers are estimates based on market data but they still point to a trend. In Q1 2016 Apple shipped 1.5 million watches to Switzerlands 5.9 million. The intervening quarters were about the same until the launch of the Apple Watch 3 in September 2017, just in time for holiday shopping. The boost of a new phone and a new watch at the same time meant a perfect storm for upgraders, driving the total number of Apple Watches sold past the Swiss watch sales numbers.

This switch does not mean Apple will maintain that lead – they have one product while Switzerland has thousands – but comparing a single company’s output to an entire industry’s in this case is telling.

Wearing watches is, as we all remind each other, is passé.

“I check the time on my phone,” we said for almost a decade as phones became more ubiquitous. Meanwhile watch manufacturers abandoned the low end and began selling to the high end consumer, the connoisseur.

Take a look at this chart:

Sales of low- to mid-tier watches – and a mid-tier watch can range in price between $500 and $3,000 (and I would even lump many $10,000 watches in the mid-tier category) – were stagnant while the true cash cows, the expensive watches for the ultra-rich, fell slowly from a high in 2014. This coincides with falling purchases in China as what amounted to sumptuary laws reduced the number of expensive gifts given to corrupt officials. Sales are up as December 2017 but don’t expect much of a bump past the current slide.

As a lover of all things mechanical – I did ruin a few years of my life writing a book about a watch – I look at these trends with dismay and a bit of schadenfreude. As I’ve said again and again the Swiss Watch industry brought this on itself. While they claim great numbers and great success year after year the small manufacturers are eating each other up while nearly every major watch brand is snooping around for outside buyers. There is no money in churning out mechanical timepieces to an increasingly disinterested public.

As time ticks ever forward things will change. The once mighty Swiss houses will sink under the weight of their accreted laurel-resting and Apple will move on to embedded brain implants and leave watches behind. The result, after a battle that raged for more than four decades, will be a dead Swiss industry catering to a world that has moved on.

Apple Watch shipments jumped in 2017, according to analysts

The Apple Watch continues to be a bright spot in amongst the middling world of wearables, according to new numbers from Canalys. The analyst group’s figures put the smartwatch at 18 million shipments for 2017, representing a 54-percent jump over the device’s 2016.

Apple’s wearable popped for a couple of reasons, LTE functionality being chief among them. For one thing, cellular connectivity was the top new feature for the Series 3. It also meant that the device got wider distribution, as more carrier partners started carrying the product in their retail stores.  The watch got its warmest reception in US,  Japan and Australia, struggling a bit more in the UK, France and Germany, where carrier partnerships are a bit more spotty for the product.

That said, the cellular version of the watch, not surprisingly, still only makes up a fraction of total sales, at around 13-percent by the firm’s count. That’s far fewer than the 35-percent of non-LTE Series 3 watches and a quarter of the combined Series 1 and 2 shipments last year, as Apple continues to make older models available at a discount.

While the company’s iPhone sales were said to be below Wall Street expectations for Q4, the watch saw impressive growth during the holiday season, up to eight million. That represents a 32-percent jump over Q4 2016, according to Canalys’ figures, and lines up with what the company reported during its last earnings call.

“It was our best quarter ever for the Apple Watch,” Tim Cook said during earnings, “with over 50-percent growth in revenue and units for the fourth quarter in a row and strong double-digit growth in every geographic segment.”

It also, unsurprisingly, represents the best sales of any LTE smartwatch. Apple’s far from the first company to offer cellular connectivity on a wrist worn device — Samsung, mostly notably, beat the company to the punch. I had some trouble finding a particularly compelling use case for bringing LTE to my own wrist, but apparently others haven’t had such a tough time.

Smart speakers to outsell wearables during U.S. holidays, as demand for wearables slows

Smart speakers will likely outsell wearable devices this holiday season. That’s the latest prediction from analysts at eMarketer, which forecasts a slowing growth rate for devices like fitness trackers and smartwatches here in the U.S. The wearable market is continuing to grow, to be clear, but it’s struggling to reach the mainstream. Next year, only 20 percent of the U.S. adult population will use a wearable devices at least once a month, the firm says.

Note that eMarketer is looking at wearable usage and market penetration here, not sales.

That being said, the firm is estimating that usage of wearable will grow just 11.9 percent in 2018, rising from 44.7 million adult wearable users in 2017 to 50.1 million in 2018. As a percentage of the population, that’s a climb from 17.7 percent to 19.6 percent.

Things won’t improved much in the next few years, either, if the forecast holds out. The growth rate will slow to single digits in 2019. By 2021, eMarketer is estimating 59.5 million adult wearable users, representing 22.6 percent of the population.

The firm attributes the majority of the growth in the sector – a market today that’s dominated by fitness trackers – to new users of smartwatches, like the Apple Watch.

This news follows on an earlier report where eMarketer had significantly downgraded its projections for wearable usage in the U.S. But it shouldn’t come as a surprise.

The relatively “modest” growth for the wearable market overall is something other analysts have pointed to, as well. Globally, the market saw just 7.3 percent growth in Q3 2017, according to IDC, for example. Canalys had reported in August 8 percent year-over-year growth, largely thanks to Xiaomi.

Gartner, meanwhile, had predicted 17 percent global growth in 2017, but counts things like bluetooth headsets (such as AirPods), body-worn cameras, and head-mounted displays in its grouping, alongside smartwatches, fitness trackers, wristbands, and other health monitors.

According to eMarketer, the problem with wearables in the U.S., and smartwatches in particular, is their high cost combined with the fact that they haven’t really sold mainstream users on these being gadgets you simply can’t live without.

Instead, they still feel more like luxury items – things that are nice to have, but not necessary.

“Other than early adopters, consumers have yet to find a reason to justify the cost of a smartwatch, which can sometimes cost as much as a smartphone,” eMarketer forecasting analyst Cindy Liu said.  “Instead, for this holiday season, we expect smart speakers to be the gift of choice for many tech enthusiasts, because of their lower price points.”

A holiday bump in smart speaker sales is almost a certainty at this point. Amazon’s top seller during the Black Friday holiday shopping weekend was the Echo Dot, for example, and Strategy Analytics recently predicted nearly 12 million smart speaker units sold in Q4 2017, bringing the year’s total to 24 million units.

eMarketer has also forecast 55 percent of U.S. households would have one of these devices by 2022.

Featured Image: Bryce Durbin

Fitbit is having a bad day

Fitbit is, once again, not having a good day after spending the year in mostly middling status as it looks to prove there’s a market for fitness trackers as well as its own smartwatch.

The culprit today is a Wall Street firm slapping a “sell” rating on the company’s stock, which often results in a resounding rejection of its potential going forward and sparks a sharp drop-off in the company’s share value. Fitbit fell around 8.5% this morning after a year that tried to recover from a steep decline at the beginning of the year amid uncertainty around its business.

Here’s a look at what happened:

Fitbit’s now down more than 16% in the last year. Volatile companies are often vulnerable to these kinds of swings as a result of Wall Street firms rating the shares, which can range from recommendations to buy or sell the stock based on its performance or analysis of its potential business.

For Fitbit, that’s bad news, because the company needs to keep its share price up as companies can use shares as part of compensation packages when they try to hire new people. There’s also always a morale component, as the stock price is a very public-facing barometer of the company’s performance (even if people try to argue against its importance), and one that can wave off potential talent that would be interested in joining the company.

The last update we got from Fitbit was a slew of apps coming to its Ionic smartwatch, which included the addition of apps like Yelp and Uber. But as Apple continues to retool the Apple Wath with new features for health tracking, which appears to be working in a way to detect some common conditions according to a study from UCSF, it’ll face increasing competition when people look at it as a health tracker.

Apple GymKit is coming to a treadmill near you

Exercise gadget integration hasn’t exactly been elegant in the past. It’s been half a decade since Apple transitioned to the lighting connector, and still I regularly see the long-retired iPod 30-pin cable flopping off treadmill dashboards at gyms all around the country. It’s impossible to say how any of this will look five years from now, but at the very least, Apple’s new GymKit offering is certainly more refined than most of what’s come before it.

Unveiled at WWDC over the summer, the platform is designed to make wearing an Apple Watch a more seamless experience. It uses a combination of NFC and Bluetooth to maintain a constant exchange of information between the two devices. The watch is better at collecting some data (calories, heart rate) and the equipment is better at others (distance, incline). All of that data is displayed on the watch and the machine’s display in real time, and aggregated in Apple’s Health app.

The feature has already launched in five gyms in Australia and a couple in the U.K. It launches here in the U.S. this week, at the Life Time athletic club in Manhattan, with more spots like Equinox getting their hands on GymKit-enabled equipment in the near future. It’s a bit of a slow roll out, given the relative expense of replacing gym equipment, but it should speed up fairly quickly, as a number of equipment makers have signed on to Apple’s platform.

The company says it’s got about 80 percent of the gym fitness markets hare covered, starting with Italian manufacturer TechnoGym, which is going to start adding the functionality to every treadmill it makes from here on out. Other pieces of equipment will follow, including step machines and stationary bikes. Apple’s also exploring partnerships with manufacturers of home equipment.

I got a demo of the equipment here in the city earlier today, and it all operates as smoothly as you’d hope. You hold the watch up to a designated point on the machine, and it pairs via NFC — basically the same experience as buying something with Apple Pay. And it’s compatible with all models of Apple Watch.

The intentional pairing process is important so the machine doesn’t just automatically pull data from your device. After all, the Health app stores potentially sensitive information like weight and age, which you might not want to share with a strange piece of exercise equipment. From there, the process is basically a couple of taps.

As a regular treadmill runner, I’m looking forward to the feature rolling out more widely. Apple’s done a pretty decent job calculating things like pace and distance without the use of GPS, but fitness machines offer an even more accurate reading. They also do a better job with things like flights climbed and inclined. That said, they suck at heart rate and things like calories burned, because they don’t have your vitals (height, weight, etc.), unless you plug in that information. GymKit is an attempt to combine the best data sets from both devices.

Equipment manufacturers seem eager to embrace the tech in an attempt to offer up the latest and greatest to gyms. How long it will actually take to circulate is another question entirely. Those pricey sports clubs will likely be the first to get it, and others will probably wait until the end of life on their current devices. Apparently the upgrade cycle is around five years for these professional pieces of sports equipment — though I’m pretty sure I regularly encounter ones from the height of Jazzercise in hotel fitness rooms.

That said, some companies are offering up a retrofitting service. Depending on the specific manufacturer, that could be as simple as inserting a new chip into the back of the machine. For others, it will require replacing the top console altogether. That’s also good news for future upgrades, meaning the days of dangling connectors might soon be behind us.

Wearable numbers get a bump, as consumers shift focus to smarter devices

The wearable space seems to still be figuring itself out — though in spite of some reports about the death of the category, overall growth remains one of the few constants. According to the latest numbers from IDC, the global bump was pretty modest for Q3 of this year, at about 7.3-percent, year over year.

More interestingly, the numbers point to a larger overall trend of consumers moving from  dumber, low-end devices to smarter ones. The study defines the latter as devices that are capable of running third-party apps — so pretty much smartwatches, at this point.

That trend does seem to lend some credence to Fitbit’s recent decision to go all-in on smartwatches with multiple high profile acquisitions that led to the creation of the Ionic. That device was something of a mixed bag, though its release did go a ways toward bolstering the company’s sales in recent months.

Fitbit’s fortunes appear to be a mixed big as well, in this latest report. The good news is that the company caught back up to Xiaomi, after the Chinese hardware company surpassed it for a bit, thanks to some seriously low cost devices. The two are basically tied for first according to IDC’s chart.

The one time far and away leader in the space experienced a steep drop in shipments, with a 33-percent year over year decrease. Of course, the Ionic is considerably more expensive, which means the company doesn’t have to ship as many units to make the same revenue — even so, it’s going to have to start selling a lot more smartwatches to make up for those declines.

And while this quarter points to a growth in higher end devices, other recent trends have focused on cheaper devicse. That’s certainly driven Xiaomi’s growth, though the company did suffer a slight year over year decline, due perhaps in part tot the fact that the company hasn’t made much of a dent outside of its native China. That hasn’t really hurt Huawei’s growth, however. The company shot up 156-percent year over year, blowing past Garmin to capture fourth place on the chart.

Apple also had a nice bump at 52-percent year over year, thanks to the company’s decision to push back the announcement of the Apple Watch 3. That jump likely also had something to do with this recent shift toward smart device purchases.

Featured Image: Bryce Durbin

Apple launched a study to look for irregular heart rhythms on the Apple Watch

Apple and Stanford have teamed up for a new heart health study. Using a new Apple Watch app and the Apple Watch’s built-in sensor, researchers will work to identify irregular heart rhythms and notify users who may be experiencing atrial fibrillation (AFib).

AFib is the most common type of irregular heartbeat and can lead to heart failure or even stroke if left unchecked. The condition affects an estimated 3 million Americans (though some think those numbers may be higher) and approximately 33.5 million people around the world (or .5 percent of the world’s population).

Though the Watch can’t diagnose any conditions just yet, it is perfectly positioned to detect an irregular heart beat and alert those with a serious condition who may want to check it out further with a medical professional. That’s because, unlike some other heart rate checkers, it stays on the person most of the time and the Watch’s sensor flashes its LED green lights hundreds of times per second to detect the amount of blood flowing through the wrist and thus capture any abnormal heart behavior.

“Every week we receive incredible customer letters about how Apple Watch has affected their lives, including learning that they have AFib. These stories inspire us and we’re determined to do more to help people understand their health,” said Apple’s COO Jeff Williams. “Working alongside the medical community, not only can we inform people of certain health conditions, we also hope to advance discoveries in heart science.”

However, this is not the first heart health study to use the Apple Watch. Over the past year and a half, Cardiogram has been using it’s own algorithm and the Watch’s sensor in a study involving heart health with the University of California San Francisco.

So far, the Cardiogram’s study results seem promising. From that study, researchers were able to determine the Apple Watch could detect an abnormal heart rhythm with a 97 percent accuracy when paired with an AI-based algorithm called DeepHeart.

Later, the same eHealth study concluded the Watch could also detect sleep apnea and hypertension with similar accuracy using its built-in sensor.

That same ongoing study has also concluded the same results may be available to any wearable heart rate sensor, including those found within Garmin, Fitbit or Android Wear as they all have similar components. However, the study focused solely on results from the Apple Watch.

Currently, the only real way to diagnose AFib is through an ECG reading, which is usually done through equipment with a built-in ECG reader at a hospital or clinic. That is, unless you have an FDA approved ECG reader you can carry with you. So far, AliveCor has the only commercially available ECG reader consumers are able to carry with them via smartphone or, as of this morning, as a built-in sensor on the Apple Watch band.

The Apple Watch’s optical heart rate sensor is instead based on photoplethysmography (PPG), which can pick up on the second signal, irregular spacing between heart beats and it is not FDA approved for diagnosis of any heart condition.

However, just having the Watch or another sensor good enough to detect an issue could help alert someone that something is wrong and, as mentioned above, prompt them to go in for further evaluation.

“Through the Apple Heart Study, Stanford Medicine faculty will explore how technology like Apple Watch’s heart rate sensor can help usher in a new era of proactive health care central to our Precision Health approach,” Stanford school of medicine dean Lloyd Minor said in a press release.

Those ages 22 and over and who might have an irregular heart beat can participate in the new Apple heart health study by installing the app on any iOS device.