Wearables – Fossil fuel.

Wearables to remain fossilised.

• Google has purchased the right to use and disseminate core IP from Fossil for $40m (stoking rumours of a Pixel Watch) but I can’t see anything that Fossil has that will allow Google to close the gap on Apple.
• Smartwatches are the most important sub-segment of the endlessly disappointing wearables segment where Apple clearly leads the pack.
• This is because Apple has done a good job of integrating a series of nice-to-have functions into a device that works extremely well and makes a good companion device for an iPhone.
• Apple Watch 4 is the first version that is triggering a round of upgrades from Apple Watch 1 as the ECG function and the larger screen are enough of an enhancement to entice Apple fans to once again dig for their wallets.
• Against this backdrop, the rest of the smartwatch industry has really struggled as Android Wear fails to deliver a compelling user experience, resulting in the device quickly ending up forgotten in a desk drawer.
• Fossil and Tag Heuer both have innovative offerings:
  • Fossil offers hybrid watches that look like regular watches and have some smart functionality.
  • Tag Heuer seels smartwatches where the guts of the smartwatch can be replaced with a new one or a regular mechanism.
• Fossil has been quick to stress that the IP that Google has paid $40m for is not in the market but currently under development.
• This means that Google is not about to start making a Pixel Hybrid smartwatch but will be aiming to delight prospective buyers with something else.
• Sadly, I do not think that Fossil has the kind of technology that could make a Pixel Watch a must-have.
• This is because what I am looking for to set this segment on fire is medical grade health monitoring.
• The two biggest targets for this are blood pressure and blood glucose which represent two of the biggest health problems in the developed world today.
• Furthermore, both require constant monitoring which is invasive and unpleasant today and can be fairly easily treated with lifestyle changes
• Hence, I have long believed that non-invasive monitoring of these two characteristics could trigger a wide-ranging take-up of wearable devices.
• This could create a user base already engaged with a product into which more innovation could be delivered.
• This is exactly what happened with the iPhone where everyone bought it because of its cool user interface creating a big enough user pool for developers to be incentivised to experiment and innovate.
• I don’t think that Fossil has created a technology anything like this and so I suspect that Google will come out with some cool gimmick, the novelty of which will wear off after a short period.
• Hence, this is not going to kick-start a mass adoption cycle and so 2019 looks set to be another disappointing year of Apple Watch doing reasonably and not much more.
• Hence, I would continue to steer clear of this segment until there is a real reason to get involved which will be before H2 2019 at the earliest.