Is Intel Backing Away From Wearables?

Not every effervescent market embraces or even tolerates the ambitious.

Brands don’t have it easy — stakeholders and customers push brands to expand, encouraging them to be risk-takers, often pushing industry-stalwarts to enter new markets that they aren’t really built for.

Network manufacturers become smartphone manufacturers, watch makers transcend into consumer electronics, and of late, chip makers have been dipping their toes in the marsh of Wearables.

There’s nothing wrong with being adventurous, but it’s also prudent to know when to cut and run. Before the money runs out, or before the egg hits the unyielding floor.

The Wearables market is one such market. Everybody, their cousins and ex-girlfriends seem to view Wearables as an easy market to plunge into. But like not every waterbody welcomes a swim, not every effervescent market embraces or even tolerates the ambitious.

Witnessing an immense amount of interest, the Wearables market is in flux — customers are interested, but the products aren’t sufficiently justifying their existence. Hence sales are low, while interest is high — kind of like Virtual Reality is at right now.

Consequently, even biggest tech companies haven’t been able to set off well in the Wearables space. It seems Intel is also joining this trail as there are reports that the company is planning to layoff almost all of its staff from its wearable division.

This comes in the wake of news surrounding Intel’s own Basis Peak smartwatch, which was summoned back earlier this year due to complaints of overheating which in some cases, even injured some users.

Intel purchased Basis, a startup focused on fitness and sleep trackers, back in 2014, just when Wearable device technology was gaining momentum.
Basis’ products and technology was then meshed into Intel’s New Devices Group (NDG) that was formulated as a new unit to support Intel’s ambitious dreams in the field of Wearables.

Later Intel also acquired Recon, innovators in the Smart Eyewear space.

NDG, during the short span of its existence, managed to deliver wearable devices like the Basis Peak and Basis Titanium. However things went south with Basis Peak being reported as being plagued with issues of overheating.
Unlike Samsung, that quickly offered to replace the exploding Note 7’s, Intel decided to recall all the Basis Peak units sold. Intel also made it clear that it would be halting its production of the proprietary software for Peak.

Now, a notification at Basis’ website implies that Intel is shutting down the service on December 31, on all its devices and apps.

Intel already has Qualcomm as a huge competitor, with Qualcomm announcing over 100 Wearable products last year. In opposition to this, Intel is still in the embryonic stage in wearables.

Even in April, Intel planned to move out approximately 12,000 jobs and going as per the data from The Oregonian/OregonLive last spring, Intel’s entire new devices group had just 579 employees in the United States following those layoffs.

As a result of this “fiasco”, many industry soothsayers implied that all other smart watches produced by Intel’s Wearables unit could also be terminated and Intel was done with Wearables.

We disagree. And it seems we’re about right.

Amidst all the conjecture, Intel has officially declared that it has no plans to withdraw from wearable market but has informed its employees already about the changes to take place, which might lead to a lot of employees losing their jobs, especially in the New Devices Group (NDG).

An Intel spokesperson made the intentions of the company clear, “Intel is in no way stepping back from the wearables business. In fact, we have several products in the works that we are very excited about, as well as prior launches that highlight our wearable technology such as the TAG Heuer Connected watch and recent Oakley Radar Pace smart eyewear”.

Additionally, there was also published a picture of the hitherto-unannounced wearable called the Basis Ruby, which is a smartwatch with heart-rate, activity, and sleep tracking features; but which amidst all this phasing out and layoffs, report appears to have been cancelled.

All this said, it will be extremely naïve to conclude that Intel is facing rough waters because the company has sone of the finest products in wearable segment such as the Intel Curie SoC, which is currently used by some of the top shots like Fossil, Oakley, New Balance and Tag Heuer.

Bear in mind, that the Wearable segment is expected to grow and is estimated to be worth $25 billion by 2019 — “The wearables market is set to treble in size in the next five years and become worth over $25 billion”, as per CCS Insight report, Intel really ought not be doing anything drastic, just because suffered a misstep.

This niche of wearable devices that includes smartwatches, fitness trackers, augmented and virtual reality headsets and wearable cameras — is set to grow from 84 million units in 2015 to 245 million units in 2019.

Intel really will be better off learning how to swim instead of throwing in the towel!

Originally published at Chip-Monks.