In the last few weeks I’ve been testing a new pair of headphones called The Dash, from the German startup Bragi. The company claims they are the first of a new breed of smart devices called hearables. And in fact, they are a kind of product that is scarce in the current landscape.
They’re sexy. Appealing. Fun to use. And useful.
These headphones are completely wireless, just like the AirPods. But their main selling point is that they are like little computers for our ears and have the ability to do some stuff that is quite interesting.
For example, The Dash is able to read our heart rate from an HR sensor built into each headphone, play music locally thanks to 4GB of internal storage and control all the activity and media functions through a touch sensor. All this is managed through an OS called Bragi OS 2.2.
The Dash has a companion app that in iOS is pretty compelling. It is very easy to use and, most importantly, integrates the activity data into HealthKit in the iPhone. Meaning that every exercise it records goes directly into the Health app and is taken into account in our daily activity goals.
But not everything in Bragi-land is rosy. From my perspective it has three flaws:
- There are only three types of activities that The Dash can track: running, cycling and swimming (yes, it’s waterproof). Bragi can add several more with a software update in the future.
- The Dash can only track your activity when you’re wearing them, meaning that as soon as you remove them after 3-4 hours of listening and tracking, you lose that ability. Battery life is good, but not enough to cover all day long activity, even with the charging case.
- Connectivity is better than any other bluetooth device I’ve tried, with the exception of Apple’s AirPods. Which basically means Bragi has taken that technology as far as it can go, which it is still not perfect.
The first one is easily solved through the magic of software updates. It is the other two that concern me.
The One Trick Pony Tale in Tech
We are witnessing one of the most innovative periods of history. The smartphone era is allowing hundreds of companies to reach new markets that can be measured in billions of dollars.
Despite this promising environment and the competition that new profitable categories generate, I’ve started to notice a worrying trend. It is what I call The One Trick Pony Tale. According to Google, a one trick pony is:
a person or thing with only one special feature, talent, or area of expertise.
When I think of a one trick pony in tech, I’m reminded of a startup that does one thing great but is unable successfully jump into new markets.
Perhaps the first company that most notoriously caught my attention was GoPro. A company that made some interesting hardware in the shape of action cameras, started to be successful and a frequent discussion topic in the media.
But as GoPro made its way into an IPO, the company ran out of ideas. New products didn’t catch the public’s attention as earlier. There was basically no reason to upgrade from an existing one.
Pebble is another interesting case study. A pioneer in the smartwatch and wearable category, Fitbit acquired Pebble’s software assets a few months ago after floundering in the market. But the deal sounds like it was sold as scraps after the company turned down an offer by Citizen for around $700 million.
The list goes on. Nike shut down its wearable fitness band business a few years ago. Jawbone is dropping the hardware market and plans to move into the services one.
I also believe that Bragi may end up becoming part of this list. Even Spotify and Netflix. They all fit into this One Trick Pony Tale because, what comes after their current product or service and how do they plan to fund their future?
The World Is Collapsing into the iPhone Sun
When we ask, then, how many people will own a smart watch, or a tablet or smart thermostat and so on, or how connected cars work, or who will control them or what software they will run, it seems to me that the best way to think of this is as a solar system – the smartphone is the Sun and everything else orbits around it. Those other segments might be big or small and near or far, and there will be moons too. Some will be full of life, some interesting, some important, others boring but worthwhile. Some, like Pluto, might not seem to have much to do with the smartphone at all, really (smart meters, perhaps?), but the pull is always there in some form. Some devices will have their own computing and UI and leverage smartphone components, and others will just be dumb glass, sensors or pipes that are explicitly dependent on a smartphone
Ben Evans expressed this idea two years ago. What this means is that every new planet of the smartphone system needs to have some degree of interaction with it in order to be valuable to the user.
Why? Because the smartphone is the daily device of choice of billions of people. The first thing they do when they wake up is check their phones. It is always with them, always connected to the internet.
Above the smartphone, the iPhone is ruling without contest. Android is the dominant platform, but the profits are extremely skewed towards the iPhone (a few months back, the iPhone made more than 100% of the industry’s profits).
Apple is turning the iPhone into the sun around which everything else revolves. It can do so because it has:
- The most profitable customer base, willing to spend several hundred more dollars than in other devices. Something that can be seen in the iPhone ASP above.
- A tight control over the software and services delivered in its hardware, potentially making it closer to the user than anyone else can. Certainly, Google’s grip on Android is far from Apple’s control on iOS.
- An ecosystem that is self sustainable, with over 1 billion users around the world and across all its devices, mainly in the iPhone.
With this muscle, Apple is picking and choosing what to integrate within the iPhone, iCloud and its own planets. Let us have a look at it:
Apple is adding every valuable planet into its Solar System. Let us have a look at the companies I mentioned earlier:
- GoPro: we can argue that as the iPhone (and other smartphones) are adding better and better cameras, with much improved video editing capabilities and water resistance built in, they are attracting potential customers of action cameras like GoPro. The iPhone is good enough for 80% of them.
- Pebble: has been unable to provide an integration level as intimate as the Apple Watch. Long battery life wasn’t enough in order to appeal customers.
- Fitbit: fitness tracking bands were enough in the wearable market at first, but as more users are buying into the idea they demand more things and better integration with their other devices and devices.
- In both instances, the Apple Watch is becoming a public’s favorite wearable, capable of tracking our daily life, paying at stores, communicating and getting notifications.
- Spotify: it has recently reached the 50 million subscriber milestone, but it increasingly looks as if Spotify is scraping the end of the barrel with permanent promotions such as the New York Times one. Apple Music is growing at a faster pace and its paid subscribers are more valuable.
- Netflix: is a successful company with a great business model. Despite the fact that Apple has no direct competitor with Netflix, it seems that they are moving towards something different than simply streaming original content. I believe Apple’s intention with video is to become a cultural superpower.
There are other tech markets where the iPhone is collecting planets too: DSLRs with the iPhone 7 Plus dual camera system, mobile payments with Apple Pay, home automation with HomeKit, messaging with iMessage and hearables with the AirPods and Siri.
Some of these companies will have no trouble going forward; others like Pebble will simply disappear.
A few years ago, Steve Jobs met with Dropbox chiefs in order to negotiate a possible acquisition. He reportedly said that Dropbox was not a product but a feature. Although he was ultimately wrong, I don’t think this knowledge is lost.
Some companies find success with a single product, not realizing that it is a dead end. There is nothing beyond that. It is the One Trick Pony Tale, and I’m afraid that Bragi will follow the same path.