NEW YORK – Microsoft’s launch of a high-end fitness-band might be a little late, given that fitness-band growth has already begun to slow, the market is already crowded, and smart watches have already begun to eat into fitness-band sales, analysts said.
Microsoft’s entry into wearables is a cause for concern for smaller rivals but not for larger rivals such as Samsung and Apple, one analyst added.
The $199 smartphone-connected Microsoft Band, which also offers productivity functions, went on sale in Microsoft stores last Thursday and became available for ordering on the company’s web store. A shipment date for online orders was unavailable at press time. Microsoft said it is making the Band available in limited quantities to gauge demand and make any product changes based on customer feedback.
The wearable, which works with the Microsoft Health smartphone app, is compatible with smartphones from all three major OSs – Android, iOS and Windows Phone – to differentiate it from Apple’s planned smart watch and other smart watches.
“Microsoft has deep marketing budgets, a famous brand, and good global distribution channels at retailers and carriers through which to sell its new Band product,” said Neil Mawston, executive director of Strategy Analytics. “Microsoft certainly has potential in fitness bands. However, Microsoft’s timing is a little on the late side, finally entering the market at a time when demand for fitness bands is slowing after three years of feverish growth and smart watches with similar features, like Apple Watch, are lining up to cannibalize the fitness- band category.”
Small rivals such as Fitbit “will be worried by Microsoft’s entry into the U.S. and global fitnessband market,” Mawston also said, because “Microsoft has deeper pockets and more retail clout.” Major rivals such as Apple or Samsung, however, “are unlikely to be too worried by Microsoft’s presence at this stage because Microsoft’s track record in selling mobile products and accessories in large volumes has long been patchy.” Delivering a “relatively high-priced band into the niche fitness-band segment is unlikely to significantly worry Apple, Samsung and others at this stage,” he concluded.
For his part, IHS senior analyst Wayne Lam pointed to challenges faced by Microsoft in entering “a crowded market space with entrenched players like Fitbit, Jawbone, Samsung Gear, Android Wear devices and the upcoming Apple Watch.”
One good sign is that the band is “mobile OS-agnostic,” he said. Another is that Microsoft is trying to differentiate through the Cloud-based element of its fitness service. The companion Microsoft Health app uses data from the band and recommends ways to achieve fitness goals, thanks to partnerships with Jawbone and Gold’s Gym and with Cloud-based links to MyFitnessPal and RunKeeper fitness accounts.
“The intelligence engine of the Azure Cloud platform promises to continuously improve and update in the background — offering “better experiences and more valuable data over time,” Lam said. “This, I think, is the key to the product’s success.”
IDC analyst Ramon Llamas also sees challenges. “Microsoft is a new player in the market, and it has to make some noise to get end-user attention.”