Samsung Files Patents for Galaxy Gear Smartwatch

by Brad Moon | August 7, 2013 11:23 am

We’ve been talking about wearable technology being the next big thing in consumer electronics[1] for some time now. Augmented reality glasses, fitness trackers and smartwatches are promising to make waves by becoming the must-have accessories for smartphone owners, helping tech giants like Apple (AAPL[2]) see the kind of demand that could lift stocks out of the doldrums.

But after talking up these devices for months now, where are they?

If you look hard enough, you’ll see signs of maneuvering going on in the background, the latest being a trio of smartwatch design patents[3] filed this year by Samsung (SSNLF[4]) and just uncovered by a South Korean news site. Samsung has already confirmed it is working on a smartwatch and patent filings[5] may just have given away its smartwatch lineup’s name: Galaxy Gear.

The million dollar question is, will it be this holiday season or Christmas 2014 when we finally see the flood of wearable tech? Analysts have mixed feelings, but I think it’s going to be this year.

Existing smartwatch players (while the category has generated huge buzz this year, it’s hardly new) have been busy revamping, hoping this is the year the category takes off and that their established products catch some of the buying frenzy when it hits.

The Players

Sony’s (SNE[6]) second generation Android smartwatch — the Sony SmartWatch 2[7] — has been announced, incorporating NFC to make pairing with its new Xperia Z line of smartphones even slicker. Google already has a horse in the game, albeit indirectly. Its Motorola division’s MotoACTV is an Android-powered smartwatch and fitness tracker combo[8].

TomTom, the GPS maker whose market is seriously eroding thanks to smartphones and mapping apps, has long offered a line of GPS-equipped watches. Those devices have more riding on them than ever, but face looming competition from smartwatches, so TomTom is updating them and building in loads of fitness functionality[9].

Fitness is another rapidly growing segment that could be threatened by smartwatches. Nike’s (NKE[10]) FuelBand began the movement to wristband fitness trackers, and recent entries like the Fitbit Flex and a reengineered Jawbone UP have firmly established the devices as wrist-wearable contenders. The challenge will be convincing consumers to stick with a single-purpose device rather than switching to an all-in-one like a smartwatch — somewhat analogous to the battle Amazon (AMZN[11]) faces in convincing consumers to buy a Kindle e-reader instead of a multipurpose iPad.

What about augmented reality glasses? We’ve seen Google Glass on early adopters and know that the high-tech specs will be hitting stores sometime in 2014 (at $1,500, they’re currently too expensive to make a big Christmas splash this year, so Google’s not losing much by holding them back). A growing throng of competitors[12] is ready to offer augmented reality glasses at much cheaper prices in time for holiday shoppers this year, but lacking the recognition that Google enjoys, they’re unlikely to do much with the head start.

The question is, when will we finally get a glimpse of the big guns — the smartwatches from Samsung, Apple, Microsoft and Google?

We’re pretty certain Microsoft (MSFT[13]) has been testing Windows 8-powered Surface smartwatch prototypes[14]. Android Authority says a Google smartwatch is real and prototypes have popped up in multiple Google offices[15]. Meanwhile, Apple has reportedly been furiously at work on a smartwatch, with reports of dedicated design team even as it trademarks the “iWatch” name. There is also speculation that Bob Mansfield — the former Apple Senior VP of Technologies who was assigned to “special projects” in July[16] — is now heading up the iWatch effort.

Rumors are circulating about engineering difficulties[17] and the possibility of CEO Tim Cook pulling the plug on the project altogether. But I doubt Apple will cancel the iWatch, and I suspect Bob Mansfield is indeed overseeing the project — with a 2013 delivery mandate. After all, pressure is on all the tech giants to deliver their smartwatches in time for the holidays.

Consumers Are Done Waiting

After listening to a year or more of hype, consumers want wearable tech and especially the smartwatches that promise to be affordable extensions to their smartphones. And investors want the devices in hopes of big sales for a new product category that will drive up revenue and boost stocks that have suffered from softening smartphone demand and PC decline.

Letting a competitor get the jump by having the holiday season 2013 uncontested is a risk none of the tech giants want to take. Otherwise, they risk a repeat of the iPad release where Apple utterly dominated the tablet market, building a huge lead that other manufacturers are still struggling against.

Samsung watchers like Sam Mobile expect the company to be first out of the gate, pointing to Samsung’s September 4 Galaxy Note III event as a potential unveiling[18]. If Samsung does pull the trigger and announce a Galaxy Gear smartwatch in September, expect Apple, Microsoft and Google to put their versions out there in short order. All it takes is one of the big four and the rest will pile on. The 2013 versions may not be the smartwatch these companies want to release, but they’ll need to have a horse in the game.

With the flood of products out there and due to arrive, wearable technology is likely to be front and center this holiday.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Endnotes:
  1. wearable technology being the next big thing in consumer electronics: http://investorplace.com/2013/02/prepare-for-wearable-tech/
  2. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  3. trio of smartwatch design patents: http://www.bbc.co.uk/news/technology-23587448
  4. SSNLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=SSNLF
  5. patent filings: http://reviews.cnet.com/8301-19736_7-57597034-251/samsung-galaxy-gear-smartwatch-on-the-horizon/
  6. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  7. Sony SmartWatch 2: http://www.sonymobile.com/gb/products/accessories/smartwatch-2-sw2/
  8. MotoACTV is an Android-powered smartwatch and fitness tracker combo: http://www.motorola.com/us/consumers/8GB-or-16GB-MOTOACTV/79070,en_US,pd.html
  9. TomTom is updating them and building in loads of fitness functionality: http://sports.tomtom.com/en_us/
  10. NKE: http://studio-5.financialcontent.com/investplace/quote?Symbol=NKE
  11. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  12. A growing throng of competitors: http://www.pcworld.com/article/2040801/google-glass-competitors-vie-for-attention-as-industry-grows.html
  13. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  14. testing Windows 8-powered Surface smartwatch prototypes: http://www.theverge.com/2013/7/15/4524286/microsoft-surface-watch-smartwatch-testing-rumors
  15. prototypes have popped up in multiple Google offices: http://www.androidauthority.com/google-smartwatch-real-207878/
  16. assigned to “special projects” in July: http://investorplace.com/2013/07/monday-apple-rumors-iphone-5s-to-launch-on-sept-6/
  17. engineering difficulties: http://www.techradar.com/news/portable-devices/report-apple-could-still-scrap-iwatch-project-despite-hiring-blitz--1165771
  18. September 4 Galaxy Note III event as a potential unveiling: http://www.sammobile.com/2013/08/04/samsung-smartwatch-called-galaxy-gear-trademark-filing-confirms/

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