How Apple is leaving money on the table

Apple now has a long and storied history in wearables. The Apple Watch set expectations for the category, replacing Swiss watches on so many wrists on its journey to become the world’s most widely worn wearable AI device. But is Apple making the most of the technology it has now developed — and is there another opportunity waiting to be explored?

Apple seems to think there might be. Mark Gurman recently reported the company is exploring a wider family of wearables, including products such as fitness bands and rings. And while the latter certainly represents a viable opportunity, the fitness band market seems ripe for a good bit of Sherlocking.

Why is it ripe? 

The technologies Apple already has

First, think of the technologies Apple can already bring to a fitness band product. The sensors, algorithms, and software the company has already developed would certainly make sense in wristband form when used with a paired iPhone to review the data the band collects. Apple’s sensors have a good reputation for accuracy and could deliver outstanding battery life. They could carry a smaller display to show limited amounts of information, such as time or distance travelled. And I expect the company’s product design teams could build a high-quality health and fitness band with very little effort, as some of the key technologies to support such a device have already been tried and tested on Apple Watch.

Privacy as a product

The second reason is competitive. Apple knows that in Europe under the Digital Markets Act it will eventually be forced to give third-party devices, including fitness bands, peer access to the kind of data it already uses in the Apple Watch. The company has suggested a protected system in which that information is shared (once it has been cleaned up to protect customer privacy), but EU regulators have not yet agreed – and perhaps never will.

The problem at the moment is that Apple doesn’t make a fitness band other than Apple Watch. And there are enough Apple customers who use third-party bands that the company might see an opportunity to bring its own versionto market as a fitness band that doesn’t erode privacy. Ironically, EU competition regulators have given Apple a reason to compete for a market it didn’t originally want to get into — to the likely detriment of incumbents in the fitness band space.

What customers want

The third reason is the nature of the market itself. Recent success by the likes of Fitbit Air, Cirqa, or Whoop show growing interest among consumers for screen-free, all-day trackers. 

“Consumers want either minimalist, screenless trackers they can wear 24/7 or feature-rich sports watches with superior accuracy and multi-day battery life,” Jason Low, research director at Omdia said in a statement. “Premium and screenless devices are gaining ground, while basic watches and mid-tier smartwatches are being left behind.”

Apple leads the smartwatch side of the equation with a 46% global share, Omdia says, while Garmin (with 15%) posted the biggest share gain among non-Apple vendors. “Garmin’s market share gains highlight a clear trend: consumers are increasingly willing to pay premium prices for devices that deliver accurate, advanced training data and translate it into actionable insights,” Low said. 

What Apple offers

Apple already has its own market-tested technology to provide accurate and advanced fitness monitoring if provided on a screenless device. As its business is not built on selling the data its devices gather, it can supplement those high-quality features with privacy promises some other vendors don’t match, while offering additional features and services through integration at a platform level. Add Siri AI to the mix and access to Apple Music and the device seems even more compelling.

Apple might be motivated to boost attachment rates to customers who will update iPhones, Macs and other Apple devices less frequently in response to recent price increases. The logic is that if customers can’t afford a new iPhone, they might invest in an Apple Watch, AirPods, or fitness band instead, becoming more deeply invested in Apple’s ecosystem as they do.

The potential returns seem promising: the fitness tracker market is expected to $generate 189 billion by 2032. That’s real money Apple already has the tech to take a grab at – and its years of work on colorful Apple Watch bands means it could offer its bands in a wide selection of designs at a price consumers will find they can afford.

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