Adidas’ retreat from languishing wearables space not entirely bad news for carriers, vendors

Apple Watch
The Apple Watch has come to dominate the wearables market. (Image: Apple)

Adidas is retreating from a struggling wearables market in which it was once a pioneer. What that might mean for carriers, though, isn’t clear.

The athletic gear company recently confirmed a Portland Business Journal report indicating slash the number of mobile apps it maintains as it shifts focus to other areas. Adidas will close its digital sports division, TechCrunch said in a follow-up story, reorganizing its other digital initiatives.

Adidas was among the first companies in its market to venture into consumer wearables. In 2008 it teamed with Samsung to launch miCoach, a so-called fitness phone sporting such features as a hearteat monitor, MP3 player and 2 megapixel camera, and last year it unveiled a cloud-based wristband designed to enable students to share fitness information with PE teachers.

The wearables market continues to live up to a significant amount of hype, though, and it has increasingly become dominated by smartwatches such as the Apple Watch, which combine fitness-tracking capabilities with more sophisticated features, often in a more stylish form. IDC reported in August that wearables shipments grew 10.3% year over year in the second quarter as smartwatch prices continued to fall, attracting consumers and enterprise users alike.

"Smartwatches recorded double-digit year-over-year growth, with much of that increase attributable to a growing number of models aimed at specific market segments, like the fashion-conscious and outdoor enthusiasts in addition to the technophile crowd, lower price points and a slowly-warming reception from consumers and enterprise users alike. Factor in how smartwatches are taking steps to become standalone devices, and more applications are becoming available, and the smartwatch slowly becomes a more suitable mass market product,” said IDC’s Ramon Llamas, research manager for firm’s wearables team, at the time.

Indeed, the market for fitness trackers once appeared to be a promising new revenue stream for operators, just as tablets did before sales slowed a few years ago. But smartwatch users typically require more data than simply transmitting heartrates and counted steps. And that trend could gain steam as smartwatches become more mainstream devices—particularly if they connect directly to the internet rather than through a smartphone.