With the recent announcement of the new Apple watch as well as the iPhone 8 and X, the end of September has been surrounded by a large amount of tech hype.
The announcements may have been exciting for the big tech player, but it was not as exciting for the smaller start-ups in the industry. For those small companies, it is almost impossible to enter into the market of consumer electronics.
To attempt to compete with the large brands of DJI, GoPro, Fitbit or even Keurig would be a bad idea as their control on the market is too large. This has been followed by a trend of investors beginning to slow down investments in the field as the smaller companies just cannot compete.
Cyril Ebersweiler, a veteran hardware investor and general partner at SOSV stated that “investments in consumer hardware are down partly because some of the consumer and internet-of-things devices haven’t really delivered. Other atet-ups are doing well but taking longer to scale than most investors would like.”
One hardware-focused accelerator named HAX, funded by SOSV has been focused on the creation of anything but consumer devices. They have entered the market by creating niche health and medical devices that have a smaller amount of large players than the tech industry.
A report from Osage Partners’ Natasha Azar stated that “big swing investments are on the rise in areas such as quantum computing… edge processors, robotics and non-traditional computing.” Eberweiler added to this by stating that it could become a cycle that lasts and one that is here to stay.
Small companies may have breakthrough technologies at their hands, but the difficulty in finding how to enter the large market, has helped to shut down those smaller companies when competing against the big guys in the market.