Wearables war takes another victim

It is not just Nike that faces challenges in the wearables war, the business of wearing devices that monitor the wearer's health, which has seen a lot of hype but disappointing mainstream appeal over the last couple of years.

Privately-held company Fitbit has also withdrawn from sale its latest and most-popular activity tracker, the Fitbit Force, following complaints that the nickel in the wristband irritated and even burnt skin. Consumers have been invited to return their bands for full retail price.

The market leader in activity trackers had promised a "next-generation tracker" soon, but it is not known when or whether the Fitbit Force will be replaced by a new device.

Around 1.7% of Force users have reported skin irritation, which is said to be an allergic reaction to nickel, even though the devices are made of surgical grade material, rather than any issues with the battery or electrical systems.

Mobile chip market

Imagination Technologies has also been looking to tap this market, and in particular a space for itself in the mobile chip market among ARM and Intel, and has been pushing its MIPS-based CPUs for wearable devices.

It recently unveiled a small computing platform, about the size of an SD card, that was created by Chinese partner Ingenic Semiconductor. Imagination officials said wearable devices is a market that the company can tap by offering vendors low-power systems-on-a-chip designs and other technologies they can leverage to create products.

However, despite dazzling predictions from analysts, the market is a tough one, and will get tougher when Apple launches its iWatch later this year, with a big focus on health tracking. No one wants to go head-to-head with Apple on hardware.

The business is also an awkward marriage between fashion and data management, with few companies able to unite competencies in both. Instead, Oregon-based Nike was said to be finding it difficult to retain talented software engineers in the field and has lost some of the FuelBand’s top designers to the competition.

The business also has something of Big Brother about it, with Fitbit for example successfully turning the data it collects from its trackers into analytics dashboards that can be sold on to companies to monitor the health of their workforces. Privately-held Jawbone may consider starting a similar programme in the future, and will possibly go a stage further by offering custom analytics software for employers.

Related businesses are somehow more palatable. Google's recent acquisition Nest Labs, the start-up which makes internet-connected thermostats and smoke-detectors is for example working with electric companies to manage power consumption in the homes of some of its users.

Nest has already partnered with utility providers such as Chicago's ComEd and Southern California’s Edison, but striking deals with utilities is still a challenge since Nest is only in less than 1% of US households. These partnerships could for example enable utilities to reimburse Nest users for lowering their air conditioners on a hot day to relieve load from the grid.

Passing fad

In the meantime, however, the devices that should be exploiting the trend for personal control of health are proving instead something of a passing fad.

Research by Endeavour Partners in the US found that one-third of American consumers who own a wearable product stopped using it within six months and while one in 10 American adults own some form of activity tracker, half no longer use it.

Consumer-to-consumer giant eBay is said to be awash with Galaxy Gears in a way that one would not find with early versions of other personal technology.

Yet the market of gym users is substantial: 4.5 million UK adults have memberships, according to TGI; in the US, the figure is about 10 times higher.

It could simply be that early adopters are generally the young and while the young worry about their beauty and form, that is not the same as a preoccupation with health.