They were little electronic things that did stuff for you. They would play music or record videos or give you directions or let you play games on the go. They were fun. Everyone had them. Everyone wanted them. There were whole magazines and websites and even TV shows devoted to them.
For 30 or 40 years, through recessions and war, through stability and revolutions, they were always there, one gadget after another, from transistor radios to TRS-80s to Walkmen and Gameboys, then iPods and Flips, GoPros and Fitbits. We were sure gadgets would always be with us, because they had always been with us, and it was good.
But no. Winter is coming for gadgets. Or maybe winter has already come for gadgets. Everywhere you look, these days, gadgets seem on the rocks. Pebble, which makes smartwatches, has been purchased by Fitbit, which has had its own problems. GoPro may be going bust, while Jawbone, Nestand other members of the gentry of gadget pageantry look just about ready to stick a fork into.
What happened to gadgets? It’s a fascinating story about tech progress, international manufacturing and shifting consumer preferences, and it all ends in a sad punch line: Great gadget companies are now having a harder time than ever getting off the ground. The gadget age is over — and even if that’s a kind of progress, because software now fills many of our needs, the great gadgetapocalypse is bound to make the tech world, and your life, a little less fun.
Things were never easy for gadgets. The lives of gadgets have always been nasty, brutish and short. One year a gadget would be the Must Have of the Year, and the next year it would be old news. But that was the cycle, and it was fine, because there would always be another gadget.
Then things got even worse. Suddenly, out of nowhere, the Thing That Does Everything emerged from Cupertino, Calif. That was almost 10 years ago now. You know what I’m talking about: the iPhone. We knew the Thing was going to be big, but we didn’t know it would be this big. When the Thing threatened to eat up all the gadgets, nobody thought it would really happen. We still had hope that some gadgets would stick around.
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And for a while, they did. For a while, it even looked as if we would have a gadget renaissance. “Gadgets are back,” said The Verge. People created websites where customers would pay to get gadgets that hadn’t even been made yet. They called it Kickstarter. You want a gadget? Pay for someone to make it! What a world.
People started making gadgets that you could wear. They started making gadgets for your house, gadgets to control your heating and cooling, gadgets to help you sleep. Imagine that! A gadget, for when you weren’t even awake. What a world. There were even gadgets that would make other gadgets. And that’s not even getting to the gadgets that could fly!
But now the companies making flying gadgets are crashing back to earth. Look at 3D Robotics, the company founded by Chris Anderson, the former editor of Wired, which ripped through $100 million to start a consumer drone company that ended up not selling many drones.
The gadgets that make other gadgets aren’t making other gadgets anymore, either: MakerBot, a much-buzzed-about start-up that aimed to spark a 3D-consumer revolution, failed spectacularly to get people printing at home.
The gadgets that were Kickstarted have been Kickstopped, too. Pebble, whose first smartwatch earned a record amount on the crowdfunding site, failed to find long-term success in a category that would soon be overrun by big companies like Apple and Samsung. (Even other big companies had trouble here; Intel’s Basis watch was recalled after it burned its wearers.) Lots of other start-ups have raised tidy sums from crowdfunding sites, but the bloom has come off the rose; as often as not, the products are delivered late and don’t work as well as they should. Even if all goes as planned with the first gadget, the companies fail to translate onetime success into long-term stability.
Much of this isn’t a surprise. “Hardware is hard” is an actual phrase that people in Silicon Valley say to pass for wise. What they mean is, starting a company that makes physical stuff has always been more perilous than starting a company that just makes code.
That’s why the hardware market has recently been ruled by big companies, either as stand-alone businesses for the likes of Apple and Samsung, or as a kind of come-on for other services. Amazon makes devices like the Kindle and the Echo as an accelerant to its content businesses and its Prime subscription program. Google and Microsoft appear more serious about hardware, and they both might turn devices into nice side businesses. But neither sees hardware as a primary moneymaker; the devices are mainly ways to get us to use more of their software.
For start-ups, even in these days of easy contract manufacturing in China, gadgets involve a lot of costs — you need money for parts and a factory, and shipping and distribution, and you need virtually everything to go perfectly, because if your first gadget is a bust or has some fatal bug, you won’t have a lot of money to make a second one. And even if your gadget is a success, it won’t last long. The gadget economy is hits driven — you’re only as good as your next big thing.
And once you get a hit, you’ll get hit by cheap knockoffs. Just before I went on a trip to Hawaii last year, I thought it would be fun to get a GoPro camera to record some pool stunts. But when I searched Amazon.com, I noticed a ton of generic “action cameras” that carried many of the same specs as the GoPros, at a steep discount on price. I ended up buying an SJCAM for $75, about half the price of the cheapest GoPro I could find. And you know what? It worked pretty well.
This is the mixed blessing of cheaper manufacturing. “In some ways it’s much easier to be a hardware start-up than it ever was before, because the Shenzhen ecosystem gives you all the components you need,” said Jan Dawson, an analyst at Jackdaw Research, referring to the manufacturing hub Shenzhen, in southern China. “But that same ecosystem is available to everybody else, too, so setting yourself apart is really tough.”
You might point out that the SJCAM I purchased lacked some of the finer qualities of a GoPro. Its software wasn’t great, and it didn’t offer customer support. If I were an extreme sports enthusiast, I might have cared about those deficiencies. For years, after all, GoPro managed to do very well among its niche audience of people who ride bikes in the snow while drinking Mountain Dew, or whatever it is you do when you’re Xtreme. Other manufacturers tapped other niches — there are gadgets for running, hiking, walking and several other sports.
But Mr. Dawson noted that eventually these companies reach the limit of their natural niche. Every sports enthusiast already has a GoPro — and that’s when trouble begins. Because I’m more of an extreme Twitter enthusiast than extreme sports guy, and because for me every gadget is essentially just an accessory to my smartphone, the cheaper knockoffs are usually fine for my purposes. This is likely to be the case for you, too.
There is something sad about this. The gadget marketplace is the great laboratory of new tech. Gadget start-ups feed the entire tech ecosystem with new ideas. It’s thanks to Pebble that we first saw the latent demand for smartwatches, and thanks to GoPro we realized that people really wanted to take videos of themselves doing underwater handstands. Would we ever have had the iPod if a bunch of start-ups in the late 1990s hadn’t braved legal trouble to create portable MP3 players?