North Pole Engineering’s Runn smart treadmill sensor can now work with Apple Watch, said the company Friday. After a software update for Series 2 and later Apple watches, the app will track speed, distance, incline, cadence and heart rate, it said.
TAG Heuer highlighted an immersive sports experience on its latest connected watch series that arrived in stores Friday. Based on the Wear OS by Google platform, the latest connected watch series has an active OLED touch-screen display and comes in four references, said the company. Available services include notifications; Google Assistant, Translate and Pay; music controls, agenda, weather and maps. A heart-rate monitor and GPS are built in.
A University of Michigan engineering professor accused Apple of stealing his invention for a wrist-mountable heart-rate monitor and using it in the Apple Watch. Apple is guilty of willful infringement of U.S. patent 10,517,484 because the professor, Mohammed Islam, discussed his then-patent-pending invention with Apple employees in at least three face-to-face meetings in Cupertino, California, between June 2014 and July 2016, alleged his complaint (in Pacer) Friday in U.S. District Court in San Francisco. Islam offered to license his technology to Apple during the encounters and in follow-up emails, but the company "declined," said the complaint. Apple emailed Islam in December 2017 and abruptly asked him to stop sharing his invention with the company, it said. Islam seeks damages “adequate to compensate for Apple’s infringement,” plus an order “permanently enjoining” the company from further infringement, it said. Apple didn’t comment Monday. Islam’s complaint is at least the second in recent weeks from an academic accusing Apple of misappropriating patents for cardiovascular functionality in the Apple Watch. Dr. Joseph Wiesel, a board-certified cardiologist on the faculty of the New York University School of Medicine, alleged last month that Apple stole his atrial fibrillation-detection invention and built it into the wearable, also after numerous “engagements” with the company in which he tried unsuccessfully to strike a licensing arrangement (see 1912310002).
The success of the Apple Watch is impinging on Movado’s traditional watch sales, said CEO Efraim Grinberg on a fiscal Q3 call Tuesday. Operating profit fell 32 percent on a 9.1 percent U.S. sales decline. The stock plunged 20.4 percent Tuesday, closing at $20.05. “We are operating in a challenging retail environment for our channels of distribution and our category,” said Grinberg. The technology in wearables “has had an effect” on the retail channel in traditional watches, “but it's really focused on one company and that being Apple,” he said. “I believe that people will continue to wear traditional watches.”
Fossil, due to launch more than 100 smartwatch styles across 10 brands this fall, announced a new category of smartwatches called Hybrid HR. The technology gives information “at a glance” for text messages, alerts, caller ID, heart rate and activity tracking with a two-week battery life, said the company Wednesday. Hybrid HR is said to combine the best of digital and analog smartwatches, putting into classic watch designs with mechanical hands smartwatch features such as an always-on display that reads out incoming texts, caller ID and app alerts along with weather updates and a second time zone. Wearers can customize watch faces.
Smartwatches drove much of the 17 percent sales growth in the watch market in the 12 months ended June, but an increasing number of consumers under 35 are “embracing the fine watch segment,” said NPD Tuesday. “Smartwatches have become the entry point for new watch consumers looking to make their own personal statements, creating opportunity for many traditional watch brands across all price points,” it said. NPD research found that “across all age groups, the number of consumers who say they wear a watch today has grown since 2015, with the most significant shifts happening at the younger demographics,” it said. Though a fifth of the 18-to-34 group told NPD that smartwatches are the type of wristwatch they wear most often, another 13 percent of the group “identified fine and fine Swiss options as their primary watch -- an increase from 2015,” it said. Older consumers continue to be the “sweet spot for the high-end watch market, but the younger generations are bringing new growth to the segment,” it said.
Apple likely discontinued the Series 4 Apple Watch (see 1909160042) "because it’s too similar to the Series 5 and keeping it on shelves would likely hurt sales for the Series 5,” IDC's Jitesh Ubrani emailed. The Series 4 and 5 have "similar hardware" including screen and processor, along with the ECG heart app, Ubrani noted: "Having the two sit side by side would diminish the innovation and 'newness' of the Series 5." The overall smartwatch market is "quite healthy," said the analyst, reaching 5.1 million units globally in Q2, up from 4.7 million in the year-ago quarter. IDC's forecasting nearly 30 percent growth year on year in 2019 and another 18 percent next year. Meanwhile, deal site Brad’s posted Tuesday what it called the first discount it has seen on the Apple Watch 5 44mm with GPS and cellular: the $699 watch, with a higher end case and black sport band, is selling at B&H Photo at $50 off list price, it said.
Retailers are continuing to sell the Apple Watch 4, though Apple is no longer selling it, we learned. The most recent Apple Watch, prior to release of the 5 this Friday, received no love during the company’s Sept. 10 event where it launched a trio of iPhones, a tablet and the Apple Watch 5 (see report, Sept. 11). Bigger news than the display that doesn’t sleep in the Watch 5 was the price cut from $279 to $199 on the model 3, setting a new entry point for Apple Watch, as the company looks to broaden its customer base. The Watch 4, meanwhile, is no longer featured on the Apple website and quietly took a modest price cut; Best Buy was selling a GPS-only version, with 40mm case and pink band Monday for $349, down from $399, with $50 cuts also applied to other models. The Apple website Monday featured the 5 starting at $399 for a space gray case with sports band going up to $1,399 for a ceramic case with stainless steel band. Deal hunters are likely to check retailers often heading into the holiday season as retailers look to clear Watch 4 inventory.
Fitbit cut revenue projections for the rest of the year after Q2 Versa Lite smartwatch sales fell short, said CEO James Park on the company’s Wednesday earnings call. The company cut full-year revenue guidance to $1.43 billion-$1.48 billion from $1.52 billion-$1.58 billion. Park attributed the Versa miss to Fitbit’s price and go-to-market strategy. It added Versa Lite in Q1, hoping to lower the barrier to entry for consumers looking for a quality smartwatch with certain core features and shifted to an everyday low-price strategy from a promotional one, resulting in a “lower promotional dollar spend and less sell-through,” he said. The watch received good reviews, but the company found “consumers were willing to pay more for a smartwatch with additional features or look for discounting versus everyday value,” Park said. Smartwatch revenue fell 27 percent year on year in Q2 and declined to 38 percent of total revenue, from 54 percent a year ago, said the company. Disappointing Versa Lite sales were offset by growth in trackers, with 59 percent of total revenue, up from 51 percent in the 2018 quarter, it said. Forty-one percent of Q2 activations came from repeat users. The company is testing premium services and plans a full launch in the fall, a "critical part" of changing the Fitbit model from one that's "episodic" with a customer device purchase to one that's "long term," said Park. It's planning to bundle services and devices, including giving away certain devices for free and then having a recurring revenue services stream associated with the device, he said. Fitbit Health Solutions revenue grew 16 percent to $24 million in Q2 and is on track to meet its $100 million revenue goal for the year, said the company. Of the $314 million in Q2 revenue -- up 5 percent year on year -- 33 percent came from Fitbit’s direct channel, it said. U.S. revenue declined 1 percent year on year to $181 million. Long-term, Fitbit shares could increase if services revenue returns the company to profitability, wrote Wedbush analyst Michael Pachter in a Thursday investor note. “However, it is taking longer than expected to roll out and expand these services,” said the analyst, saying in the meantime, device sales “are stagnating as both the novelty wears off and competition increases.” Shares plunged 21 percent Thursday to $3.31, a 52-week low.
Garmin’s recent launch of its Marq line of smart “tool” watches “expands our reach to the upper end” of the smartwatch category, said CEO Cliff Pemble on a Q1 call Wednesday. “Where we’re at today is obviously not the upper end of where watches are in total,” he said. “We feel very good about it. We’ve received high marks in terms of the design of the product and the materials we’ve selected.” Garmin is just starting “to deliver those devices into the field,” he said. “We’ll start to see some impact from that.” Introduced in mid-March, the six models in the Marq series range in price between $1,500 and $2,500. The fitness-tracker category also is moving “upmarket,” said Pemble. More consumers are adopting “high-end” trackers like Garmin’s $299 Vivomove HR with heart rate technology “as opposed to a basic tracker band,” he said. “Margins on high-end trackers are lower than those of basic bands, he said. “Depending on mix, of course, that impacts the overall segment margin.” The stock closed 6.6 percent lower Wednesday at $80.06.