Are fitness trackers just a passing phase?

In 2015 almost 82% of U.S. consumers were aware of fitness trackers, yet only 12% actually owned one, and only 7% owned a smartwatch, according to the NPD Group’s Connected Intelligence Wearables Forecast. For 2016, the smartwatch is predicted to override interest in fitness trackers, as health and fitness apps become a key consumer and marketing focus. Demand for a more sophisticated type of activity tracker that is durable, waterproof and able to support GPS and heart rate monitoring is expected to create a plethora of new business opportunities for Internet of Things (IoT)-related sports products, whilst third party apps will reportedly be central to the growth of both the smartwatch and the fitness tracker markets.

Fitness trackers were popular holiday gifts in December. And most of us probably know someone who walks several extra steps each day because they’re wearing one. But is the FitBit just a fad?

Last week, former Twitter US:TWTR Chief Executive Dick Costolo announced (via Twitter, of course) that his next venture is “a software platform that reimagines the path to personal fitness.”

He’s working on the company with Bryan Oki, the co-founder and chief executive of health-and-wellness consulting firm Fitify Inc., which designs fitness programs for corporate clients.

Costolo didn’t give too many details about their plans, but said, “The fitness industry is transitioning to a world of specialized studios and programs with a multitude of connected devices and software trackers. We’ve developed a system that works within this evolving landscape, and we believe we can scale this system with technology and deliver it to a massive audience.”

Despite obesity levels in the U.S. that remain high, with less than half of U.S. adults meeting federal guidelines for physical activity in 2014, overall awareness of manageable ways to make changes have grown. “The demographic for someone buying a fitness tracker has expanded,” said Weston Henderek, the lead wearables analyst for NPD Group.

When wearable fitness trackers first came onto the market about four years ago, they seemed to be directed at serious athletes, Henderek said. But now there are more mainstream buyers, particularly in the 35 to 54 age range, he said.

“The mainstream buyers have much lower expectations than the more serious athletes,” he said. “They’re maybe looking to start an exercise program, maybe just walking around their block. They don’t have a need for the more serious tracking abilities. That kind of contributed to the popularity of the category as a whole.”

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In 2015, Euromonitor found the retail value of wearable electronics sold worldwide was about $12.5 billion, and in 2020 that number is projected to grow to $60.9 billion. (FitBit has about 45% of market share for wearable electronics in the U.S. and 24.6% worldwide, according to Euromonitor). And despite just 12% of consumers owning a fitness tracker and only 7% owning a smartwatch, 16% of consumers say they’re planning to buy a fitness tracker or smartwatch, according to a survey of nearly 1,700 Internet users aged 18 and over released Monday by market research company Mintel.

“We suspect the fear over activity trackers/smartwatches being a ‘fad’ is overblown,” wrote analysts for Raymond James in a note on Jan. 21. The firm upgraded FitBit shares to “outperform” from “market perform.” Analysts from Stifel Nicolaus reiterated their “buy” rating. The shares jumped, after reaching record lows a day before.

Consumers are also becoming increasingly aware of fitness trackers. In November 2013, just about 30% of the U.S. market was aware of activity trackers, and in 2015 almost 82% of consumers were aware.

One explanation for that: Fitness apps already come with many smartphones that offer many of the same features fitness trackers offer, and they are often free to download and use, including Apple’s Health app, which tracks several aspects of health including steps taken, Fitbit’s free Apple app and Google Fit for Android. And smartphone apps are just as accurate for tracking steps as wearables, according to a recent study carried out by physicians at the University of Pennsylvania. (Of course, their measure of “accuracy” assumes one carries a smartphone at all times, which is not always the case.)

They may not be as gimmicky as some people think. Smartphone apps and fitness trackers can both be effective in increasing physical activity and battling weight gain, said Holly Lofton, the director of the weight management program at New York University’s Langone Center.

Tracking steps and exercise can just be a good incentive to make an incremental change, she added.

That doesn’t mean people won’t tire of them like they do with the treadmill in the basement.

About 40% of wearers stop using trackers within six months, NPD Group found. “Engaging people in their health more by wearing an app or wearable is moving in the right direction,” said Mitesh Patel, a senior author of the University of Pennsylvania study. “But we don’t have enough information that using it by itself would significantly change behavior.”

He suggests competition among friends, workplace incentives such as working toward a goal, such as a charitable donation tied to fitness, and sharing your results on social media may encourage people to keep using their fitness apps.

Tracking exercise on its own might not be enough. “It’s going to take more than just showing (consumers) information,” Patel said. That could be an opening for Costolo.

“This platform will go beyond measurement to motivate and drive improvement and make the road to personal transformation fun and social,” he tweeted.