Canalys: Just 720K Android Wear smart watches were shipped in 2014

Around 720,000 smart watches running Google's (NASDAQ: GOOG) Android Wear platform were shipped in 2014, according to research firm Canalys, or just 15.6 percent of the 4.6 million shipments in the overall smart band market. The news of the relatively sluggish start comes just months ahead of Apple's (NASDAQ: AAPL) launch of the Apple Watch, its first wearable, which is expected to jumpstart smart watch sales.

Google and its hardware partners have been releasing Android Wear watches since last summer, but so far, according to Canalys, they don't seem to be taking the market by storm for a variety of reasons. In contrast, smart watch maker Pebble has said it has shipped a total of 1 million units from its 2013 launch through to the end of 2014, and Xiaomi has shipped more than 1 million units of its Mi Band, which has fewer capabilities than many Android Wear devices.

Although Motorola Mobility's Moto 360 smart watch was only available in limited quantities throughout the fourth quarter, Canalys said Motorola was the "clear leader" among Android Wear vendors. LG Electronics' round G Watch R performed significantly better than its original square-faced G Watch, while Asus and Sony got into the market with their own Android Wear devices.

"With six unique watches on the market (round and square), a growing collection of watch faces, and thousands of apps created specifically for Android Wear, our team and developers are helping users wear what they want," a Google spokeswoman said, according to the Wall Street Journal.

"We think [Android Wear shipments] would be under where [Google] were hoping to be by the end of the year," Canalys analyst Chris Jones told CNET.

Why have Android Wear devices been a relative dud? There are several reasons. One is a lack of apps. Although Android Wear supports tens of thousands of apps, the wider Android ecosystem supports more than a million. That could lead many consumers to think the watches do not have that much added utility. "We don't have the third-party software ecosystem for smartwatches that we have for smartphones" Canalys Analyst Daniel Matte told the Journal. "It's still early."

Another reason is that the user experience is not fully optimized for a watch, especially because it focuses heavily on notifications that drain battery life, Jones told CNET. "It's a stripped-down smartphone operating system," Jones added to Re/code. "It's really about notifications and getting notifications from your phone on a small screen you wear on a band on your wrist."

It's not just about functionality though. Smart watch makers also need to be thinking more about form and fashion if they want to draw consumer appeal. "At the end of the day these are things people are going to want to wear," Jones told Re/code. "They should add something to their lives. Be fashionable. There's a lot to consider here. Some device makers have been guilty of throwing devices into the market to see what sticks."

Indeed, Samsung Electronics has launched six wearable devices in just 14 months, some running Android Wear and others on Tizen. Samsung still leads the smart band market in total overall sales, according to Canalys.

The market is likely going to shift when the Apple Watch launches in April. The entry-level Apple Watch will retail at $349, which is more expensive than some smart watches on the market but not by that much. However, Apple has not disclosed pricing for the more expensive models, including models in 18-karat rose or yellow gold.

"There are several things that are called smart watches that are shipping," Apple CEO Tim Cook said in an investor conference earlier this week. "Certainly there has been none that has changed the way people live their lives. That's our objective at Apple."

Cook said that the "biggest surprise" customers will experience with the Apple Watch will be the "breadth of what it can do." Cook said the integration with Siri, Apple's digital personal assistant, will increase the watch's utility, and that the watch will know to tap a person on their wrist if they have bene sitting around too long. "Sitting is the new cancer," Cook said.

"Apple made the right decisions with its WatchKit software development kit to maximize battery life for the platform, and the Apple Watch will offer leading energy efficiency," Matte said in a statement. "Android Wear will need to improve significantly in the future, and we believe it will do so."

For more:
- see this release
- see this WSJ article (sub. req.)
- see this CNET article
- see this Re/code article
- see this The Verge article

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