The Fitbit story is a fascinating one, and is about to enter its next phase as wearables graduate from mere utility to decoration, writes ARTHUR GOLDSTUCK.
It was a fashion show with a difference. Against the backdrop of the annual IFA consumer technology expo in Berlin, Fitbit chose a counterculture venue called Haubentaucher to show how its latest devices could be worn as both accessories and fitness devices.
Male and female models dressed in modest white outfits paraded along a temporary ramp built over a swimming pool, almost implying that the devices would keep working if they fell into the water.
The gadgets themselves marked the next step in the evolution of the activity wrist band: the new Fitbit Flex 2 featured a removable tracker that could be slotted into a bracelet for the wrist or a pendant for the neck. The potential was clear: the tracking component could be fitted into any clothing accessory or other wearable device. The bracelet and pendant were just the beginning.
Fitbit also launched the Charge 2, the latest version of its market-leading activity band, with a substantially larger screen that allows display of text messages. It also features automatic sports tracking and “guided breathing”, to help users regulate breathing and enhance relaxation.
James Park, CEO and co-founder of Fitbit, added a buzz to the event by introducing the new devices. He practically invented an industry by spotting what was missing in other inventions. When the Nintendo Wii was launched almost exactly a decade ago, he said, he had been caught up in the hype.
“I was very excited about the Nintendo Wii. I was really amazed at the way it made gaming something fun, active and positive. Families were getting off the couch. We thought, how do we capture that magic and put it in portable form?”
He and co-founder Eric Friedman had less difficulty coming up with a solution than they had naming it, he admits.
“My co-founder and I were going through hundreds of names and variations. One day I was just napping and I woke up and thought, ‘Hey, Fitbit!’ It just came out of the blue. Unfortunately, domain names were hard to come by. We reached out to the owner, who happened to live in Russia. We had an email dialogue, asked how much do you want, and he said $10 000. I said, how about $2000? He immediately replied and said okay, and we paid him via PayPal.”
Those were the easy bits. The next step, getting the product to market, tends to be the one where even the coolest products fail. They chose the TechCrunch50 start-up conference to showcase their device. The online publication that hosted the event, TechCrunch, described what was then a clip-on device in quaint terms: “a wireless 3D pedometer and diet monitoring system that will cost $99 and connect online to upload activity levels and food intake.”
“I don’t think success was a given in the early days,” Park acknowledges. “When we announced our first product at TechCrunch 50, Eric asked how many pre-orders I expected. He said five. I said, that’s pessimistic, I expect 50. By the end of the day we had a couple of thousand pre-orders.”
It was exhilarating, but it was the kind of success that can land a start-up in deep trouble.
“We’d only raised $2-million in capital, which was pretty small for a hardware start-up. It forced us to be pretty efficient and mean. We were always cognisant of the fact that we couldn’t depend on capital markets for money, and one of our primary goals was to get profits going.”
Eight years later, Fitbit presides over the two best-selling products in history in the category, the Flex and the Charge. Its attempt at a smartwatch, the Blaze, has been less successful, as it is perceived to compete directly with the far more popular Apple Watch. As far as Park is concerned, however, it is about offering more options.
“We wanted to make the successors to our original products more motivating, so we added health metrics, and made the devices more stylish. People are looking for more style from this category. The devices are also getting smarter, as we gradually introduce more connectivity functionality.
“For example, your cardio fitness level tells you how well your body is using oxygen. To get access to this technology before, you had to be a performance athlete and go to a lab and spend a lot of money. We’ve encapsulated this in a small digital format on your wrist.”
Park says Fitbit spends the largest proportion of its research and development budget on sensors and algorithms, and it will continue to develop new sensors that will give people better metrics about their health.
Park’s long-term ambition for Fitbit is not as immodest as it may seem, considering what it has already achieved: “It will be incredible if Fitbit is considered an integral part of people’s health journey, in the same way as people wouldn’t think of buying a car without a seatbelt today.”
Second-hand smartphone market booms
The worldwide market for used smartphones is forecast to grow to 332.9 million units, with a market value of $67 billion, in 2023, according to IDC
International Data Corporation (IDC) expects worldwide shipments of used smartphones, inclusive of both officially refurbished and used smartphones, to reach a total of 206.7 million units in 2019. This represents an increase of 17.6% over the 175.8 million units shipped in 2018. A new IDC forecast projects used smartphone shipments will reach 332.9 million units in 2023 with a compound annual growth rate (CAGR) of 13.6% from 2018 to 2023.
This growth can be attributed to an uptick in demand for used smartphones that offer considerable savings compared with new models. Moreover, OEMs have struggled to produce new models that strike a balance between desirable new features and a price that is seen as reasonable. Looking ahead, IDC expects the deployment of 5G networks and smartphones to impact the used market as smartphone owners begin to trade in their 4G smartphones for the promise of high-performing 5G devices.
Anthony Scarsella, research manager with IDC’s Worldwide Quarterly Mobile Phone Tracker, says: “In contrast to the recent declines in the new smartphone market, as well as the forecast for minimal growth in new shipments over the next few years, the used market for smartphones shows no signs of slowing down across all parts of the globe. Refurbished and used devices continue to provide cost-effective alternatives to both consumers and businesses that are looking to save money when purchasing a smartphone. Moreover, the ability for vendors to push more affordable refurbished devices in markets in which they normally would not have a presence is helping these players grow their brand as well as their ecosystem of apps, services, and accessories.”
Worldwide Used Smartphone Shipments (shipments in millions of units)
|Rest of World||136.8||77.8%||245.7||73.8%||12.4%|
Source: IDC, Worldwide Used Smartphone Forecast, 2019–2023, Dec 2019.
Table Notes: Data is subject to change.
* Forecast projections.
Says Will Stofega, program director, Mobile Phones: “Although drivers such as regulatory compliance and environmental initiatives are still positively impacting the growth in the used market, the importance of cost-saving for new devices will continue to drive growth. Overall, we feel that the ability to use a previously owned device to fund the purchase of either a new or used device will play the most crucial role in the growth of the refurbished phone market. Trade-in combined with the increase in financing plans (EIP) will ultimately be the two main drivers of the refurbished phone market moving forward.”
According to IDC’s taxonomy, a refurbished smartphone is a device that has been used and disposed of at a collection point by its owner. Once the device has been examined and classified as suitable for refurbishment, it is sent off to a facility for reconditioning and is eventually sold via a secondary market channel. A refurbished smartphone is not a “hand me down” or gained as the result of a person-to-person sale or trade.
The IDC report, Worldwide Used Smartphone Forecast, 2019–2023 (Doc #US45726219), provides an overview and five-year forecast of the worldwide refurbished phone market and its expansion and growth by 2023. This study also provides a look at key players and the impact they will have on vendors, carriers, and consumers.
Customers and ‘super apps’ will shape travel in 2020s
Customers will take far more control of their travel experience in the 2020s, according to a 2020 Trends report released this week by Travelport, a leading technology company serving the global travel industry.
Through independent research with thousands of global travellers – including 500 in South Africa – hundreds of travel professionals and interviews with leaders of some of the world’s biggest travel brands, Travelport uncovered the major forces that will become the technology enablers of travel over the next decade. These include:
Customers in control
Several trends highlight the finding that customers are moving towards self-service options, with 61% of the travellers surveyed in South Africa preferring to hear about travel disruption via digital communications, such as push notifications on an app, mobile chatbots, or instant messaging apps, rather than speaking with a person on the phone. This is especially important when it comes to young travellers under 25, seen as the future business traveler, and managing their high expectations through technology.
With the threat of super app domination, online travel agencies must disrupt or risk being disrupted. Contextual messaging across the journey will help. Super app tech giants like WeChat give their users a one-stop shop to communicate, shop online, book travel, bank, find a date, get food delivery, and pay for anything within a single, unified smartphone app. Travel brands that want to deliver holistic mobile customer experiences need to think about how they engage travellers within these super apps as well as in their own mobile channels.
In the next year, research shows, we will see an accelerated rate of change in the way travel is retailed and purchased online. This includes wider and more complex multi-content reach, more enriched and comparable offerings, more focus on relevance than magnitude, and an increase in automation that enables customer self-service.
“How customers engage with their travel experience – for instance by interacting with digital ‘bots’ and expecting offers better personalised to their needs – is changing rapidly,” says Adrian Roodt, country manager for Southern Africa at Travelport. “We in the travel industry need to understand and keep pace with these forces to make sure we’re continuing to make the experience of buying and managing travel continually better, for everyone.”
Read the full 2020 Trends report here: 2020 Trends hub.