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The State of the Smartwatch: Wait and See

Consumer tech giants watching battle between Samsung, Fitbit

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If consumers actually buy the Galaxy Gear in quantity, then the race to release smartwatches might quickly intensify. But until then, there are key technical factors currently holding companies like Apple, Google (GOOG) and Microsoft (MSFT) from making a move.

  1. Battery Life: Having to plug in and recharge every day is annoying with a smartphone and would be worse with a watch where consumers are accustomed to going years without worrying about power. Battery life is a series of tradeoffs between display size, device size (and room for battery), CPU and the requirements of sensors and wireless communications. Business Insider says poor battery life is one of the primary stumbling blocks for Apple’s rumored iWatch.
  2. Physical Size: No one is lining up to have a smartphone strapped to their wrist. Something like the Fitbit Force can get away with being small and lightweight because it’s a relatively “dumb” smartwatch. The Galaxy Gear is big because it packs a big display, a mobile processor capable of running Android apps and incorporates telecommunications functions like a microphone and speaker. The question is, how smart is smart enough? The answer to this question will largely dictate how big the smartwatch is and whether it appeals to just tech enthusiasts or the general public.
  3. Form Factor: This influences physical size but is worth spiking out because it can alter the equation. You could likely get away with a Galaxy Gear-sized smartwatch if the form factor was different. Rather than a flat slab of metal, a curved bracelet-like approach (used by many of the fitness trackers like the Fitbit Force) would be much less awkward. Forbes suggests that Liquidmetal technology may be in the future for Apple. Add flexible AMOLED displays and Corning’s (GLW) flexible Willow Glass, and form factor could take care of the physical size limitation.

You could argue that price is an issue too, but let’s face it — if Apple or any of the big consumer technology companies release a smartwatch that addresses the three limiting factors listed above — they’ll be able to charge what they want for it and a wave of early adopters will line up.

Later, as they target mass market adoption, they can use economies of scale and experimentation with different models to lower prices if they choose to do so.

The bottom line: I still think wearable technology is going to take off over the next few years and that smartwatches are going to be the big seller — much more so than glasses.

Samsung’s Galaxy Gear isn’t going to be the smartwatch that cracks the market open, though, and I suspect this Christmas will be the time for Fitbit and the other fitness tracking companies to make hay while the sun shines.

And you can bet that Apple’s iWatch, along with offerings from Google, Microsoft and of course a revamped Galaxy Gear, will be battling it out with those incumbents come 2014.

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

Article printed from InvestorPlace Media,

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