Technology | Media | Telecommunications

Friday, March 18, 2016

Activity Tracking Devices Create a Mass of New Data

More people are wearing new personal activity tracking devices. According to the latest market study by The NPD Group, annual 2015 unit sales of connected activity trackers experienced impressive growth of 85 percent versus 2014 -- that's despite a hike in the average selling price (ASP) from $96 to $109.

"The increase in ASP speaks to these devices becoming more sophisticated, and that consumers are looking for better-quality devices, not just entry-level products," said Ben Arnold, executive director at The NPD Group. "This, combined with unit growth, shows that prices aren't falling to drive demand -- demand is increasing along with rising prices."

Fitbit remained the leading brand in connected activity trackers in 2015, accounting for 79 percent of sales. The company has been the market leader in connected activity trackers since 2014, growing market share by more than 20 points since that time -- despite the entrance of new competing products in the wearables category.

According to the NPD assessment, several factors have contributed to the growth of connected fitness trackers. Greater awareness of the products is leading to increased interest, new designs have made trackers more appealing, and there are more opportunities to buy the products due to increased distribution.

Besides, all of these new health and fitness device users are creating mass quantities of personal data that needs to be captured, stored and ultimately interpreted. Cloud-based object storage and big data analytics software solutions are a key component of this emerging developer ecosystem.

Wearables Market Development Opportunities

Fitness trackers are still a significant category in the world of wearable devices, but they're now part of a growing variety of personal technologies within the rapidly expanding Internet of Things (IoT).

While the smartwatch category continued to gain in popularity due to the Apple Watch launch in April 2015, overall ownership growth has continued to trail the more mainstream fitness tracker category.

According to NPD, fitness tracker ownership in the U.S. market stood at nearly 33 million devices at the end of Q4 2015, while smartwatch ownership -- including more traditional watches with smartphone notification capabilities -- stood at just 13 million devices.

However, awareness of the smartwatch device category is higher than fitness trackers -- at 83 percent compared to 75 percent, respectively -- which could stimulate demand for second-generation smartwatches with dedicated cellular connectivity, and also more traditional watches enabled with wireless notification capabilities.

In fact, NPD predicts a significant ramp-up in smartwatch ownership growth starting in the second half of 2016, with an expected overall ownership number of just over 30 million devices by the end of 2017.

Despite slightly lower overall awareness, fitness trackers are still showing strong sales and ownership, which seems to demonstrate that the category has more upside growth potential. Meanwhile, translating smartwatch awareness into new sales continues to be the greater market development opportunity.