What’s wrong with wearables? Here’s 5 problems

Extending smartphone functionality to your wrist is not creating the magical new market opportunity many were predicting.

Moto 360 Android Wear
Moto 360. One of the best first generation Android Wear watches. But held back by terrible battery life.

What is wrong with the Apple Watch? Is it really flopping?

I have thoughts on that, and will share them in a separate post this week, but, for now, maybe the real question is:

What’s wrong with wearables?

It’s not just the Apple Watch that appears (we don’t yet know for sure) to be struggling to win over consumers. Android Wear devices — there are a total of 7 currently, made by LG, Motorola, Sony, and Asus, with another model announced by Huawei coming soon — aren’t exactly selling through the roof. One estimate had those Wear devices selling just 720,000 units in the second half of 2014. Not exactly iPhone numbers.

Pebble was an early leader, and innovator thanks to its trick e-paper display that provides for long better life, and superb outdoor readability. The new Pebble Time has had a few hiccups, at least in my experience. And, even though the Palo Alto start-up raised $20+ million via Kickstarter, the overall sales volume is not large, not mainstream large. If you assume an average pledge value of $200 (my guess) than that would equate to about 100,000 units total. Plus, of course, you need to add to that sales of existing Pebble products. Impressive for a 100-person or so sized operation, but not something Google and Apple investors should be too thrilled about.

So what’s the problem with wearables?

After testing the Apple Watch, a year of wearing Pebble (and now Pebble Time), and recently having re-tested a batch of Android Wear smartwatches (getting better), I have some thoughts. The list is actually very long — and there are many positives too — but for now here’s 5 key problems I see with wearables in general.

5 Problems with Wearables in 2015

1. A smartwatch is an accessory, not a new market opportunity

A lot of analysts looked at wearables as a new market opportunity. I’m not so sure that’s true, at least if we’re talking about smartwatches. I see them as accessories. Like a mouse. A Bluetooth speaker. Or a VR headset like Google Cardboard. They add functionality, yes. But they require a paired device — usually a phone — to work. Further, a smartwatch merely extends functionality, that already exists in your pocket, to your wrist. It doesn’t necessarily do anything your phone doesn’t already do. From this perspective, if wearables are accessories, “attach rates” become central to sales thinking. How can Apple, must go the strategizing, attach more sales of the Apple Watch, for example, to the iPad, and iPhone. It’s easy to switch my iPhone for an Android. A little more painful if I own an iPhone and an iPad — all that synced cloud data. But really a tougher decision if I own an Apple Watch. It will become worthless if I switch to Android. Ouch.

2. Too expensive

Blame Apple. You can buy an Android Wear watch for as low as $149 (Moto 360) and even less if you look around online for the original LG G Watch (still a solid performer). Apple, though wants us to buy into the idea of an “accessory” that begins at $399. Come on, now, there are phones out there that cost less! That have 4G LTE. HD screens. And run full-on apps to boot (something the OG Apple Watch is missing… native apps). Celebrities, hip-hop artists, athletes, sure, drop $17K on a special edition watch, and make it rain, and all that… for middle America, even for the iClass, it’s too much to swallow. Until prices hit $100-200, I don’t expect the masses to buy in.

3. Too complicated

When was the last time you had to actually think when setting up an Apple product for the first time?

Yet, that’s the Apple Watch. That magic factor, not so much. I wonder: would Steve Jobs have Ok’d this design? CEO Tim Cook did. The jury’s still out if this is going to be the first new product category to successfully bust open a new market under his leadership.

When was the last time you had to actually think when setting up an Apple product for the first time?

The Apple Watch has two buttons, one of them a crown that can rotate. And there are touch-based gestures, and two different ways to touch the screen (regular and force touch). At first, it overwhelms. Over time, I found it not a big deal. You get used to the different ways to interact with the watch. But, I’m an early adopter, and I like new gadgets, if only because they are new. The average buyer? Not so sure they’d put up with the hassle. Android Wear, for what it’s worth, is not a whole lot better, though I do find it easier to use (there are fewer buttons, and the interface simpler).

4. Offer little functionality above-and-beyond a phone

Your smartwatch isn’t really that smart at all. It simply relays information — primarily notifications such as text messages, emails, social network updates — to your wrist. Handy? I think so. I love it when I’m driving or at the gym that can see urgent texts, or control music (Music Boss, awesome).

The thing is, we see greater, evident value in a tablet. It’s great for reading, watching movies and checking Facebook on the couch, at the end of a long day. A tablet is a standalone device with lots of functionality.

Apple and Google have done less than yeoman’s work convincing us that we really need a smartwatch. Nice to have, sure. Then again, nice to have doesn’t drive the kinds of sales many are predicting for wearables.

5. Clunky designs

Don’t tell me the Apple Watch is fashionable. It is not. Baume & Mercier? Probably a better choice if you’re looking to wear something tasteful to go with your designer dress.

For it’s part the Apple Watch is not bad looking. Quite nice, actually. But how on earth is Apple expecting us to buy in to this whole fashion idea? By hiring fashion designers and executives from Burberry. A red herring to be sure.

Most designs are inelegant (LG G Watch… though I like it!), incomplete (Moto 360 and the “flat tire” though I really like it!), or underwhelming (sigh, Pebble Time of which I’m struggling to remain a proponent).

Re-adjusting Expectations

Not everyone will want a smartwatch. That we know. And since you have to own an iPhone or Android device, we know that the size of this market can’t realistically be larger than that of the one for smartphones. It’s not going to be 0% either, of course. It’s going to fall somewhere in between. My suspicion is that less than 25% of smartphone owners will want, and buy, a smartwatch. That number could be far, far less if the nextgen batch don’t come soon with significant improvements (battery life, ease of use would be good places to start, in addition to native apps for the Apple Watch and persistent Cards for Wear). Look online for Android Wear deals, and you’ll find prices are plunging, fast. Last I checked there’s about a thousand or so Apple Watches, new and used, for sale on eBay.

MORE Wearables Stories

Everyone talked up Google Glass. It bombed (though I love what Google is doing with VR and Cardboard, and the market is reacting enthusiastically, especially in the education sector). 3D was the rage for a very short time. Now along comes wearables. Us in the tech blog community love new stuff, so headlines tend to skew towards awe and wonder at the new and shiny. Fair enough. But we ought not to confuse that enthusiasm for market acceptance.

My theory is that wearables are accessories. The attach rate of this new slew of devices is way low. Less than 25% of those that own a smartphone will buy a smartwatch to pair with it. If anything this is a niche market. That’s not a bad thing by any means, it just means we may need to reset our expectations of the wearable opportunity.

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