Wednesday, September 30, 2015

Insanity in Trade Press w.r.t. Wearables

Today I ran across this article in +ReadWrite entitled: 1 In 5 U.S. Adults On Board With Wearables Now.

I have been following wearable sales numbers, even before the release of Android Wear and thought that the numbers stated were very unlikely.

Reading the article, I found out the headline was incorrect. The numbers they were talking about came from Marketing Research firm Forrester and came from a survey of 952 "online" US adults. In a well done survey, 952 could be enough, but well done surveys are the exception, not the norm.

Let's examine some of the claims...

From the US Census Bureau we find there are roughly 246 million adults in the US. Pew Research (an organisation that is actually good at surveys) says that about 15% of adults do not use the Internet. So the number of "online" American adults is around 209 million and the article's claim is that there around 42 million currently using wearable devices. (The survey was explicitly about what people were actually using, not bought and put in a drawer or replaced with a different device.)

The survey contained one data point that I absolutely knew was wrong (in a survey representative of online US adults)... it said that 15% of those surveyed were using Google Glass. 15% of 42 million is 6.3 million. The exact number of Google Glass sold was way below 1 million with the most outrageously high number I've seen being around 800,000... but a more likely number is sub-200,000. Recall that this survey was about what people were *currently* using. A look at the Google Explorer community page shows 46,574 members. Now if you paid $1,500 for Google Glass and were still using it, surely you'd be a member of that community, even if you don't follow it regularly. One can safely say that the number of Google Glass units in use is sub-100,000.

One can only wonder why ReadWrite author David Nield did not catch that glaring problem.

But it goes deeper than that. While Apple and Google are fairly secretive about their smartwatch sales, FitBit, which primarily makes wearables, recently went public and so we know a fair bit about their actual sales. A recent number released by Fitbit is that the total number of trackers they have sold since 2011 is 21 million.

According to the survey, 36% of the 42 million are using their Fitbits... that would be 15 million *currently in use*, very unlikely. But the problem doesn't end there. The 21 million sales were world-wide. I don't know how extensive Fitbits world-wide sales are, but during their early days they had a recall in the US and Canada; at that point the Canadian units were about 1/4 of the total units recalled. Currently Amazon is selling the units in the UK, Canada, Germany and Japan, so one would expect a minimum of 50% of sales would be outside the US. The point here is that the number of units sold in the US is far below what the survey is claiming for units in use in the US.

Then you need to factor in the number of units that are no longer usable. For example, my wife, an early Fitbit adopter has had 3, only 1 of which is still in use. (The other two died, it is instructive to note why... clip-on Fitbits do not fare well in the wash, and if you use them daily, the batteries in these tiny devices fail after a couple of years.) I've had two, only one of which is in active use.

Given that many such gadgets end up in drawers, attrition rates, and the known number of Fitbits, one would be very surprised to find that more than 5 million are in *active* use in the US.

Why a "respected" marketing firm like Forrester and a new-media publication like ReadWrite gets away with producing such blatantly bad information astounds me.

Finally consider this quote:
Her colleague, Julie Ask, points to the growth of the smartphone market as the primary driver behind wearable adoption, an angle that's tough to argue with: Without the iPhone, there would be no Apple Watch. Without Android, there would be no Android Wear.

It's not tough at all to argue with that... first of all the US phone market growth has slowed greatly, this is so well known, one wonders how the Journalist and Market Analyst involved could make/report this statement.

Second, Fitbits do not need smart phones to work. They come with a dongle you can plug into any desktop or laptop. I rarely use the Fitbit App on my phone, the data gets downloaded automatically by an old Mac when I walk into my house. Using an App to monitor your wearable is an unnecessary drain on its battery, which is the last thing most smartphones (especially iPhones) need. The only point you could really draw at all is that Apple greatly limits their market by having only iOS support. All of the rest at least support Android and iOS, with a few going beyond that.

Simply put, the causality in the quoted statement is backwards. Wearables support smartphones because that is the most prevalent form of computing among their target consumers. If users stopped using smartphones for another platform, Wearables would simply support the new platform.