Where have Nike Inc (NYSE:NKE), Fitbit And Others Missed The Wearable Point?


Nike Inc (NYSE:NKE) and Fitbit Inc (NYSE:FIT) feature among the early movers in the smart wearable business. However, it turns out that neither Nike nor Fitbit is doing enough to expand the market for their wearable devices. Part of the problem lies in their wrong perception of the market, which results in misplaced product advertisements. Device complexity has been blamed for the low penetration of smart wearables.

Wearables that track fitness activities such as Nike Inc (NYSE:NKE)’s Fuelband and Jawbone have the potential to attract widespread consumer adoption. The strength in fitness wearables is that they have the tendency to influence favorable behavior changes that enable people to stay out of risk for chronic diseases. On its part, Fitbit is making impressive progress by selling its activity trackers through corporations.

However, none of the fitness wearable vendors seems to be doing enough to get their devices to the people who need them. According to Iana Simonov of Public Health Institute, wearables vendors such as Nike Inc (NYSE:NKE), Fitbit and Apple Inc. (NASDAQ:AAPL) appear to be marketing their products to people who don’t need them while leaving out a more receptive customer population.

Wearable dropouts

In its recent report, the NPD Group established that one in every ten U.S. adults earning an average of $100,000 and above owns a fitness tracker. Interestingly, the report said that a third of the fitness wearable owners ditched their devices in the initial few months.

While Nike Inc (NYSE:NKE) and its peers in the fitness tracker business appear to focus their attention on populations they think can afford their products, the strategy hasn’t worked well. There is a huge customer population that wearable vendors have not reached and reaching them could significantly expand the addressable market.

Affordable prices

Explosion in the wearable industry could easily be realized if vendors could make their devices more affordable.

Misplaced advertisements

The other thing holding back wearable penetration is misplaced advertisement. Wearable vendors like Nike Inc (NYSE:NKE) seem to say that their products are for a particular community or profession, thus making it difficult for the average consumer to relate with the devices. The result is that misplaced ads limit sales.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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