Fitness trackers are having a difficult time – that much is certain. Smartwatches are eating the category at the top end, Xiaomi and budget brands are cleaning up with cheaper offerings. And the likes of Fitbit are fighting – and losing – on two fronts in the middle.
With so much turmoil, Mio has pulled the rip-chord and got out of the fitness tracker game altogether. The maker of the Mio Slice has had a change of leadership at the top, bringing in Peter Taylor to replace founder Liz Dickinson in the CEO position, to transition the company from hardware maker to software giant.
Essential reading: Best fitness tracker 2018
"I think the space, like a few others, has bumped into the fact that hardware is difficult, and doing it well is extremely difficult. Our focus is to work on what we have been the world's best at the past which is accuracy of algorithms," Taylor told us.
At the heart of this strategy is PAI – Personal Activity Intelligence – a score given to your heart health and the effort you've made to improve it, over the last seven days. Go for a walk, wash the car, do a triathlon – everything contributes to a 100/100 score, which you need to maintain. It's Mio's jewel in the crown, and it wants to break it out to the wider fitness market.
The cost of getting a heart rate sensor into a device now is very low, the value of the information is very high
"PAI brings something unique to the market," said Taylor. "As a metric it has scientific grounding in health outcomes. Goal focused is really powerful, getting to 100 PAI. Consumers are seeking outcomes and a fairer judge of their effort, than steps bring."
And as heart rate sensors pervade even the cheapest devices, it's going to become less about the device, and more about platforms that speak to people, beyond just a step count.
"All manufacturers are seeking the next motivational experience that goes beyond step counting, which is fatigued now," he continued. "The cost of getting a heart rate sensor into a device now is very low, the value of the information is very high. But the benefits of HR training, reaching max HR are very difficult to communicate. Maybe there's a simpler way, and maybe PAI provides that simplification and that engagement."
PAI fits into a fitness tracking world that's significantly different to today – according to Taylor. He believes that the era of the device is over, and it will be the software experience that gets people excited.
And while the days of the general fitness-interested wearable tech user might be gone, Taylor believes there are clear sub-categories of user emerging: those with a lack of time to get fit, those who want to save money via insurance premiums, and those with serious conditions.
"We're seeing a sub-segmentation of different user types. Some people have had a health scare and need to link activity to a healthier tomorrow," he said.
Taylor will be looking to insurance brands such as Vitality (which has already worked with the Apple Watch) to incorporate PAI into their offerings. So when customers opt for a fitness device or smartwatch as part of their insurance package, corporate wellness scheme or when making big life adjustments post-illness, they opt into the PAI system first, rather than basing everything around the plastic on the wrist.
"What you will see in the next generation from PAI is an interface, a UI, that talks to the person who is very health sensitive, time sensitive, and the person who needs a friendly nudge…maybe from a loved one," he said.
The future of health?
Taylor constantly compares the wearables market – a term he rejects as outdated – to the general consumer electronics market, where apps and software have prevailed.
"In the future we will think of wearables, the category, as getting a sensor on the wrist. No-one will shop for a wearable and we will laugh about the clumsy term. These sub-segments with literally life-saving use cases are emerging, and they have incredible dollar value in insurance and healthcare. Insurance companies could be offering a $1,500 discount per year to put a sensor on your wrist. PAI can talk to that."