Wearable tech is dedicated to staying on your wrist, but its face is changing fast.
Headed into 2015, the wearable market will soon be bidding a slow farewell to the dominance of screen- and app-less fitness wristbands and trackers, like theand Jawbone UP, and welcoming in the era of smartwatches, with the Apple Watch front and center.
The global fitness wearable market, which includes fitness wristbands, sport watches and smart garments, is expected to shrink next year from 70 million units sold to 68 million, according to a November report from analyst firm Gartner. Smart wristband shipments are expected to fall by 15 percent to 17 million units, while smartwatches are expected to jump 17 percent to 21 million shipments, eclipsing the former as the most successful wearable design to date.
The problem? Fitness wristbands, as popular as they have been so far, just don't do enough to excite consumers when compared with devices like the Apple Watch and Motorola'ssmartwatch -- or do very little that a smartwatch can't do and more. "Half the people who would have bought a [fitness] wristband will buy a smartwatch instead next year," Gartner analyst Angela McIntyre concluded.
As wearable technology moves from the fringes to the mainstream, accelerated by the, companies that have thrived by being first to the scene will soon be facing competition from fashion houses, watchmakers and accessory providers. More than just increased pressure, however, is a decision on how to move forward as consumers abandon one design for another.
Unlike smartphones, tablets and PCs that take obvious shapes and perform many of the same functions, wearables can cover different parts of our bodies and perform a wide variety of functions depending on where they're placed and what other device they're paired with. How to maneuver that complex landscape in 2015 will decide whether younger upstarts like Fitbit, Pebble and Jawbone can keep up with the tech titans -- all while traditional companies start making wearables of their own.
In a December report, Forrester analyst J.P. Gownder laid out the results of a survey asking consumers what features they were most interested in using a wearable for in the future.
While a majority of respondents, 42 percent, said they wanted a wearable for their wrist, none of the top five use cases can be accomplished by modern-day fitness bands with a few exceptions. Those functions included accessing maps, taking photos and video, receiving contextual information about your location, shopping online and performing Web searches.
"Fitness trackers represented the first wave of wearable devices -- they proved out the early use cases. But there's only so much real estate on the wrist," Gownder said in an interview. "So it's only natural that smart watches would co-opt that usage case." Gownder expects Apple Watch to legitimize the market and convince mainstream consumers that never considered a wearable to begin looking at them in a different light.
When it comes time to make the the purchase, giving up the fitness for the features of a device like the Apple Watch, he added, is a "sensible compromise."
Between a smartwatch and a hard place
Caught in crosshairs of an evolving wearable market in 2015 will be the companies that can't or won't figure out which part of the body they can best serve. And if their products are in competition with other devices, how a wearable maker can better position itself to win your wrist.
"There's this grey area in the middle where these companies are going to struggle," said Wes Henderek, an analyst and director of connected intelligence for The NPD Group. "If they try and target too large of a segment and add too many features, they become a lesser smartwatch and they're not targeting enough of a niche."
Fitness giant Nike saw the writing on the wall in April when it. The company said that it would begin focusing more on its Nike+ fitness platform, essentially positioning the service as a mobile app that lives on other wearables -- including Apple's upcoming smartwatch. "We are focusing more on the software side of the experience," Nike CEO Mark Parker said at the time in an interview with CNBC.
As for Fitbit, the leading maker of wristbands and clip-on trackers has already made an attempt to differentiate itself as the market heats up. Beyond-- a move that may have contributed to -- Fitbit launched a smartwatch of its own. The startup's take, called the Surge, lasts more than five times longer than current offerings by cutting out the bells and whistles of feature-packed gadgets like Samsung's and LG's .
"Fitbit's response is to move toward the smartwatch space with Surge, which isn't a true smartwatch -- it doesn't run third party apps -- but which takes on key smartwatch elements, like notifications," Gownder said.
Fitbit hopes the Surge can be the best of both worlds by not being classified exclusively as fitness band or a smartwatch. Even its chief executive is shying away from the idea of a smartwatch as the magic product design.
"I'm personally a little skeptical of the smartwatch category," Fitbit CEO Mike Park said at roundtable discussion last month in San Francisco.
Fitbit, Henerek thinks, is "hedging their bets in the middle" and waiting to see what happens to the market.
Jawbone has gone the opposite route, positioning itself as a "lifestyle tracker" that could be worn in conjunction with smartwatches and other wearables. When it released its UP3 activity tracker, Jawbone opted not to include a screen and this past September -- seeing the writing on the wall -- the company made its platform available for competing wearable devices. "We're not trying to build a smartwatch," Andrew Rosenthal, Jawbone's group manager for platform and wellness, said last month. "It's not where we'll win."
"A lot of companies trying to figure out where they stand on this," Henderek said. "The ones that don't figure it out and try to be a little bit of everything to everyone. In the long run, they're going to get lost in the shuffle."
It's still unclear whether the smartwatch is the win-it-all wearable. But one thing we can count on is the quintessential device we associate with wearable tech is on the move.
"It's a period of creative destruction, and there will surely be losers," Gownder said. "It's too soon to say who will win, but I think 2015 will see coexistence between fitness bands and smartwatches to some extent, but a lot of the fitness tracking will eventually fold into other devices."
Update at 7:00 p.m. PT, Sunday, January 4: A previous version of this article misidentified the firm for which analyst J.P. Gownder works. It is Forrester, not Gartner.