Cellular-enabled smartwatches almost nonexistent at MWC—but carriers remain hopeful

Apple Watch Series 3 with cellular (Apple)
The Apple Watch Series 3 features cellular capabilities. (Apple)

BARCELONA, Spain—Cellular-enabled smartwatches were conspicuous only in their almost complete absence here at the Mobile World Congress trade show. That’s noteworthy considering the devices have played a prominent role in past MWC events, and carriers in the United States and elsewhere were hoping the gadgets would catch fire—so that they could sell wireless subscriptions for the devices.

“Indeed, not many significant new smartwatches at this MWC,” wrote George Jijiashvili, a senior analyst for wearables at research firm CCS Insight. “Major phone makers stepping away due to low volumes.”

No major company announced any new smartwatch products here during Mobile World Congress. And, as noted by Jijiashvili, LG didn’t even show off smartwatches in its booth.

“Leading chipset company Qualcomm has not unveiled a new smartwatch-focused chipset for two years and software development by Google on Android Wear has been extremely slow, which makes it hard for OEMs to bring modern smartwatch designs to market and little reason for carriers to spend time, effort and marketing dollars to promote old designs,” explained IHS Markit Senior Research Director and Analyst Ian Fogg.

However, that’s not to say that smartwatches aren’t selling at all. CCS estimated that around 1 million cellular-enabled smartwatches were sold in North America last year. That figure is partly due to Apple’s entry into the cellular-enabled smartwatch market late last year with its Apple Watch Series 3. CCS estimated that a quarter of all of the Apple Watches that Apple sold globally in the final three months of 2017 were cellular-enabled variants.

But, according to CCS, China represents the primary market for cellular-enabled smartwatches. The firm said that, of the 26.5 million cellular-enabled smartwatches sold in 2017, 25 million of them were sold in China, mainly to parents looking for a way to stay connected to their children.

Despite the relative dearth of smartwatches here at the MWC show, some carrier executives remain upbeat about the market’s prospects. Mike Troiano, AT&T’s VP of IoT solutions, said the carrier’s new LTE M network—which is specifically geared toward supporting wearables and other IoT-style devices, could make smartwatches more appealing.

“It’s a very different network for things like wearables,” he said, explaining that LTE M networks can support devices with batteries that last far longer than devices with standard LTE service. And he said LTE M radios are generally 50% less expensive than standard LTE radios—thereby potentially lowering the price tag for cellular-capable smartwatches. Finally, Troiano said LTE M modems are smaller in size, so that LTE M-powered smartwatches aren’t as bulky as their initial brethren.

“Most smartwatches with cellular included have delivered a poor experience because of bulky designs and poorly executed Android Wear software design for working when the smartphone is left behind,” agreed IHS’ Fogg.

AT&T turned on its LTE M network late last year, so smartwatch vendors may well reconsider the space. But Google—the company behind the Android Wear operating system used by most smartwatch vendors—has made no mention of plans to upgrade the platform. And that could leave Apple to pursue the smartwatch market largely unopposed.

Finally, it’s worth pointing out that the smartwatch market is largely following the same path as the tablet market. Apple’s iPad spurred Android smartphone vendors to build their own Android-powered tablets, and operators hoped to sell lots of cellular subscriptions for the devices. But the tablet market hasn’t grown much beyond its initial heyday, and wireless network operators aren’t putting much focus on the devices anymore.