(Bloomberg) -- The first time I saw a smart ring in person was more than a decade ago, when Nokia’s former head of design Marko Ahtisaari showed me a product from his native Finland. It was the first generation of Oura Health Oy’s health-tracking ring and Marko was helping the startup in its early days. For most people, Oura’s products are still the defining example in this budding category, a simpler and more discreet alternative to a track-everything smartwatch.
Now valued at $5.2 billion, Oura is leading a much more competitive field, with industry heavyweights like Samsung Electronics Co. also getting involved. As the necessary components have gotten smaller, rings are becoming ever more capable replacements for smartwatches and other health gadgets. They can track sleep, activity and heart rate without a conspicuously technological appearance — or a display. Oura’s latest generation, the Oura Ring 4, continues to define the category.
Why Now?
Tech companies are racing to invest in artificial intelligence and prove that the technology can generate revenue. Oura Chief Executive Officer Tom Hale sees AI as central to its strategy too, and that’ll require more accurate and sophisticated data collection. The $349 Ring 4 brings a new so-called Smart Sensing system that dynamically adjusts its array of sensors for improved accuracy and battery life. It also eliminates the bulky domes that housed those sensors in previous iterations, allowing it to look and feel much closer to conventional jewelry.
Smart rings are surging in popularity, with industry tracker IDC projecting annual sales to nearly double to 1.7 million. The Ring 4 also arrives just in time to compete with Samsung’s Galaxy Ring, which debuted last year with some design and performance shortcomings. Although that product was hardly perfect, the Korean tech giant is the world’s biggest electronics brand and, unlike Oura, doesn’t charge a subscription fee to access all of its smart ring’s software features. With more options in this space, Oura is under pressure to defend the 80% market share it held before last year.
What Makes This Smart Ring Different
Over several weeks of testing that included wearing the Ring 4 during exercise and overnight, I found it to be a more accurate and reliable health tracker than either its predecessor or Samsung’s alternative. While many might find the titanium ring stylish, I would argue that its software is its biggest strength. Where Oura excels is in distilling all the personal data it collects into an accessible, actionable format. The app offers a “daily readiness score,” for instance, that rates your wellness each morning based on a variety of factors.
I also appreciate how the interface is less a repository of stats and more of a knowledgeable fitness coach. The app defaults to tracking calories consumed rather than steps as the main activity metric, and it offers running commentary and helpful suggestions. When a user doesn’t meet their goals, the Oura app is philosophical and encouraging about it.
Although it’s fairly uncommon for device makers to require a subscription, the $5.99-per-month fee is lower than some standalone health and fitness apps such as MyFitnessPal or Strava. It also helps that the experience is so polished. Syncing the ring to its mobile app is seamless, and Oura produces more sophisticated readings from its measurements, such as tracking cardiovascular health.
The titanium hardware is comfortable when fitted correctly, and without the overhead of a built-in display, it also lasts for nearly a week on a single charge. Those are key advantages for smart rings over bulkier options like the Apple Watch. Rings offer longer battery life than smartwatches and it’s easier to forget you’re wearing one. That’s especially true for sleep tracking, which can be uncomfortable with a watch.
Unlike the Galaxy Ring, which misses some peaks in heart rate during exercise, the Ring 4 records a faithful picture of workouts. The software uses machine learning to detect sports and, even when it doesn’t immediately identify a workout, it’ll remember a user’s input and suggest the correct sport on subsequent sessions.
The Ring 4 does an accurate job telling the difference between time spent in bed and actual sleep, and it turns that information into actionable advice. The inclusion of a rest mode is also helpful in keeping users engaged — the app is forgiving enough to pause tracking when a user lacks their usual motivation or time — and Oura’s holistic approach to helping users understand their body extends further.
The app also provides insights for women’s cycle tracking, such as predicting an optimal fertility window. This is significant given the company’s user base is 59% female, according to Oura, with twenty-something women being the fastest-growing segment as of 2023.
The Downsides of This Health-Tracking Tool
The subscription fee is likely the biggest hurdle for would-be Oura users. Consumers are used to paying once for hardware from the likes of Apple Inc. and Samsung, with any software upgrades considered an added value. Though that appears to gradually be changing. Alphabet Inc.’s Google, for example, bundles a Fitbit Premium subscription with new fitness devices, but only for six months. In Oura’s case, it has the added challenge of convincing people to try an entirely new kind of product.
With Samsung’s $399 Galaxy Ring being subscription-free, Oura has a tougher sales pitch. And there’s little for Oura members who stop paying: free functionality is reduced to a handful of basics such as the daily readiness and sleep scores. Insights, advice and the AI-powered Oura Advisor are all behind a paywall.
Beside the recurring cost, the Ring 4 is also a step down in accuracy compared to smartwatches. The Apple Watch line, Samsung’s Galaxy Watch Ultra and Google’s Pixel Watch 3 provide more precise heart-rate information and collect additional data like the number of stair flights climbed each day. Many watches include built-in GPS tracking and storage to hold and play music by connecting to wireless earbuds, all things a ring can’t provide. Smartwatches also commonly support contactless payments and can receive notifications.
For all the things that a smart ring can do discreetly, it cannot compete with the full feature set of larger wearables. And yet, most devices in this class cost as much as a smartwatch. The Oura Ring 4’s gold edition is $499.
The Takeaway
From its first wearable tracker the size of a signet ring to the current one, which could be mistaken for a wedding band, Oura has sliced away much of the bulk while raising expectations for accuracy and utility. The company has successfully associated its name with a growing category of health-tracking gadgets, and the Ring 4 extends that lead. Samsung’s Galaxy Ring may have been competitive with the previous-generation Oura Ring 3, but the latest edition makes significant improvements that leave no doubt about its superiority.
As of today, the Finnish pioneer has the most refined design and best user experience in its class. It delivers more and better personalized insights than its competitors, and the brand’s narrower focus means every detail of the user experience seems considered.
But staying ahead is now a necessity, if Oura’s business model is to endure. With years between device releases, the company will have to rapidly iterate on its AI and software to keep paying users coming back for more.Read next: Huawei’s Google-Free Phones Are Making Real Progress
