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Intel officials, who have targeted the internet of things and wearable devices as key growth areas, are recalling its Basis Peak smartwatches due to overheating issues that they say could cause a user’s skin to burn or blister.
The chip maker issued the voluntary recall Aug. 3 after almost two months of trying unsuccessfully to develop a software solution to fix the problem. Now, officials are asking users to return their devices for a full refund, have stopped supporting the smartwatches and will shut down all Basis Peak services Dec. 31, at which time people will no longer be able to access their data.
“We are issuing this safety recall of the Basis Peak watch because the watch can overheat, which could result in burns or blisters on the skin surface,” Josh Walden, senior vice president and general manager of Intel’s New Technology Group, wrote in a recall alert. “It is important that you stop using your watch immediately and return it.”
Intel initially sent out messages in June noting reports of overheating in the Basis Peak watches, at the time recommending that users immediately stop wearing the devices. Reported problems accounted for 0.2 percent of all smartwatches sold, Walden wrote.
“We had hoped to update the software on your watch to address the problem,” he wrote. “Unfortunately, despite our best efforts, we aren’t able to develop such a solution without completely compromising the user experience. As a result, we are asking that you return your Basis Peak watch and authorized accessories for a full refund at your earliest convenience. This was a tough decision, but your safety is our top priority.”
Users who want to return their devices and get the refund can go to the Basis support website or call one of several regional telephone numbers listed in the recall notice. Users with a Basis Titanium will get a $344 refund, while, those with a standard Basis Peak will receive $234.
Intel bought Basis Science in 2014 as a key step in expanding the company’s presence in the increasingly competitive wearable device market. With PC shipments declining over the past four-plus years, Intel and other OEMs and component makers have looked to reduce their reliance on PCs by extending their reach into emerging growth markets. For Intel, that has included the internet of things (IoT), wearables, the cloud, the data center and connectivity, part of what CEO Brian Krzanich has called the “virtuous cycle of growth.”
Intel early last year introduced Curie, a tiny development platform for wearable devices like smartwatches, bracelets and eyewear and sensors, all of which help make up the IoT. At the time, Krzanich said the wearable space is a natural market for the company.
“Wearables are a natural extension of computing,” he said. “Wearables are becoming ultra-personal.”
However, it’s unclear what Intel will replace the Basis Peak with once support stops at the end of the year.
The chip maker also has released other platforms—including Edison—for the IoT and has hosted various competitions challenging developers to build wearable devices using Intel technology. Most recently, the company helped host a reality television show called “America’s Greatest Makers,” in which device makers create wearables powered by Curie.
Intel’s IoT Group is small but growing. According to company, the group in the second quarter generated $572 million in revenue, down 12 percent from the first quarter but up 2 percent from the same time in 2015.
Intel Cites Overheating Issues in Recall of Basis Peak Smartwatches
In a report last month, IDC analysts said that the smartwatch market in the second quarter for the first time saw a year-over-year decline, driven in large part by a drop in shipments of Apple’s devices. Worldwide shipments of all smartwatches fell 32 percent from the same period last year. Apple was hampered because the numbers in the second quarter were compared with those in the second quarter a year ago, when Apple first launched its Apple Watch.
Although Apple was the only vendor in the top five to see a shipment decline during the quarter, the company was still by far the leader in the space, with 47 percent market share. Samsung was next with 16 percent, followed by Lenovo, LG Electronics and Garmin. Intel’s Basis business was in the “others” category, which accounted for 16 percent of the market.
The analysts said they expect growth in the market to be “muted” though they are forecasting growth to return next year.
“What will bear close observation is how the smartwatch market evolves from here,” Ramon Llamas, research manager for IDC’s Wearables group, wrote in a statement. “Continued platform development, cellular connectivity and an increasing number of applications all point to a smartwatch market that will be constantly changing. These will appeal to a broader market, ultimately leading to a growing market.”