Is it time for smart watches?

Phil 

Goldstein

It seems like an almost certainty at this point that Samsung Electronics will unveil a "smart watch" called the "Galaxy Gear."  Lee Young Hee, executive vice president of Samsung's mobile business, told the Korea Times that such a device "will enhance and enrich the current smart mobile experience in many ways." It seems likely that the smart watch won't have cellular connectivity and will be a companion to existing Samsung Galaxy-branded smartphones. (Editor's Note: Click here for the Samsung's Galaxy Gear announcement.) 

There have been many in the media recently who have said Samsung's announcement will kick off a new smart watch war as electronics companies seek new reasons to get people to spend money. However, this ignores the fact that there are a handful of companies that have already designed smart watches (Sony and Pebble to name a few) and implies that consumers are ready and willing to fork over cash for a smart watch.

There are a lot of unanswered questions about the smart watch market, if indeed one develops. Thus, it's worth taking a step back from the hype surrounding Samsung's expected smart watch launch to try to discern what will drive the market and whether it will have momentum in the months and years ahead.

First, there is a diverse array of possible contenders in the market, starting with Samsung and including Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG). Other players, like Nike and FitBit in the fitness segment, could also expand into smart watches.

However, it's unlikely that wireless technology suppliers will factor into the market, at least initially. Analysts generally do not expect vendors to install cellular connectivity into smart watches, mainly because adding wireless will make them more expensive, bulky and complex. Instead, analysts expect smart watches to connect to smartphones and other devices through low-power technologies like Bluetooth.

The absence of a cellular connection means that smart watches likely won't be high on the list of wireless carrier priorities in the near future. This means smart watches won't get much play in wireless carrier stores, which means it will fall to big-box and traditional retailers to sell the gadgets, as well as the companies producing the watches themselves.

So is there a viable market for smart watches?

After speaking with analysts about the market, I'm not so sure. I think smart watches will need to be more than just second screens of smartphones in order to have long-term viability as a distinct product category. What is the value they will deliver to users beyond providing glanceable information about text messages and emails? There are already services, such as Motorola's "active notifications" on its latest smartphones, that do that. What could smart watches tell customers about their health? What services could they provide that smartphones cannot?

Until those kinds of questions are satisfactorily answered by smart watch makers, I'm taking a skeptical view of the market. It seems clear smart watches are coming. What they'll bring is still unknown.

With all of that in mind, FierceWireless has done a deep dive on the smart watch market. Here are the key questions you need to know:

Which companies will play in the market?
Will early smart watches have LTE/cellular connectivity?
Will carriers sell smart watches in their stores?
What is the actual demand for smart watches?

--Phil

Is it time for smart watches?
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