Smartwatch War: Can Anyone Challenge Apple?

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Smartwatch War: Can Anyone Challenge Apple?

Smartwatch Market: Can Anyone Challenge the Apple Watch?

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By Greg Miller, Senior Technology Analyst

As my colleague Louis Basenese mentioned on Wednesday, Apple’s (AAPL) product launch event last week contained the usual buzz and hype over new gadgets.

But one thing was conspicuously absent from CEO Tim Cook’s two-hour presentation: Despite the Apple Watch being the first product mentioned, and getting all kinds of functionality and fashion updates, Cook never actually said how many watches the company has shipped to end users.

Thanks, Tim – now we have to guess! All we know is that pre-orders were strong – nearly one million units before anyone even saw one in person. Such is the popularity of Apple products and the dedication of its fans, Apple could pretty much sell one million pre-orders of anything!

Gauging the smartwatch market is important, though, given that Apple, Google (GOOGL), and other device makers in the Android universe are acting like watches are the “next big thing.”

But are they?

Apple’s Most Successful Product Launch Ever?

While Apple fanboys go nuts for any new device, initial reviews of the Apple Watch were muted, to say the least.

Among the criticisms: It’s too expensive, not intuitive enough, the screen is too small to carry out many tasks, it doesn’t do anything that your phone doesn’t already do, and you have to carry your phone, to boot.

Yet, Apple and other watchmakers have poured millions of dollars of investment into watches. And it appears they’re right.

Despite Cook’s reticence to reveal the Apple Watch numbers, forecasts suggest the device is a huge success. For example, IDC Data estimates that Apple sold 3.6 million watches in the second quarter, the first in which it was available. If so, that would make it Apple’s most successful product launch in years – better than the iPad and much better than the iPhone, which is the engine of Apple’s growth, as Louis mentioned the other day.

And with Apple’s upgrades announced last week, future sales are likely to be strong, too. But it probably won’t be due to the functional changes to the watch, which are pretty minimal and only attractive to a few people. Rather, the vast expansion of the fashion aspect could be a game changer.

Dedicated Followers of Fashion

Now, we don’t talk much about fashion in tech articles – and for good reason. It’s too subjective.

For example, an iPhone might be more attractive to someone than a Samsung Galaxy, but not much more attractive to make a difference.

But watches are another story. For a start, they’re wearable, whereas phones aren’t. And in terms of the fashion aspect, they date back much further. Wristwatches have been a fashion item since they first appeared in the 16th Century. That isn’t going to change now, just because you can read your texts or hail a cab with the device.

So aside from the main Apple versus Android universes, smartwatches really aren’t drastically different, so fashion will continue to be important if companies want to entice consumers to spend a lot of money on these devices.

Apple understands this – hence why it’s created different styles of the watch for different consumers, from sporty folks to those who like solid gold bling. The company also offers dozens of bands and has teamed up with high-end fashion brands like Hermes to create even more variations.

Bottom line: Apple has always parked itself at the intersection of form and function, which makes it a natural bet to dominate the smartwatch market.

But Apple’s competitors don’t intend to concede the market entirely. Not without a fight anyway.

Contenders or Pretenders?

For example, Motorola (MSI) recently introduced its next-generation Moto 360 watch. It takes advantage of the improvements to Android Wear that I mentioned in my Google I/O article back in May and comes in two sizes, both with increased battery life and better graphics. But it also has an “innovation” that few reviewers even mentioned – a traditional band clasp!

This seemingly benign feature is actually important. Given that the faces of smartwatches are pretty similar from one brand to another, it leaves the case and band as the differentiating fashion items.

Like everything else that Apple does, the Apple Watch is proprietary and only uses bands from Apple. The old Moto 360 was similar, but with the new one, a consumer can walk into any store and get whatever band they like, made from any material.

Other watchmakers are fashion-forward, too.

Huawei is finally getting ready to ship its much-anticipated smartwatch. It’s upscale, too. Not only has the company made a sharper screen to allow more detailed images, it’s also using sapphire instead of Gorilla Glass for the face and high-grade steel for the cases. And while Huawei has a standard band, it’s also going the Moto 360 route and offering a variety of different bands.

And of course, South Korean giants Samsung Electronics Co. (SSNLF) and LG Display Co. (LPL) are also introducing new watches with enhanced fashion features.

And the Winner Is…?

By the time the third generation of smartwatches appears next year, you’ll probably be able to buy a device in almost any shape you want, along with many styles and materials. You’ll be able to make just about any fashion statement you want, just as you can with traditional watches.

The question is: Will Android makers’ new fashion sense allow them to catch up with the Apple Watch?

In a word, no. Louis was right when he wrote back in April that the Apple Watch will crush the competition.

However, by recognizing that the fashion aspect of smartwatches is arguably equal with functionality, manufacturers may bid the market higher than many analysts expect, so even the scraps that Apple leaves behind may still be pretty tasty.

To living and investing in the future,

Greg Miller

The post Smartwatch War: Can Anyone Challenge Apple? appeared first on Wall Street Daily.
By Greg Miller