Jeff Kagan: Will SmartWatch Do Well in 2014?

Jeff Kagan |

The SmartWatch is the newest innovation in the tech industry and it was just launched a few short months ago by Samsung. Qualcomm (QCOM) is getting ready for their launch in early December. Many other companies are getting ready to enter the fray as well. Will the smartwatch be as successful as tablet computers? Samsung just announced their initial sales numbers, so let’s take a closer look.

Since these smartwatches require them to be hooked up to a smartphone, we can safely assume sales numbers will not exceed smartphone numbers. With that said, how many smartphone users want a smartwatch?

This is a new industry segment. Sure there are other watches that call themselves smartwatches, but they are not the same type device. They track your steps or heartbeat while exercising, but they don’t let you check your email, surf the web or make phone calls.

We have just entered the first wave of customer sales. There is no history. The numbers will change as other competitor’s jump in, technology is compared, and customers decide whether they need these new devices. So smartwatches will either be a big success long term, or not. It’s too early to tell at this point.

The first few months of sales reported by Samsung looks promising. Samsung Electronics said its Galaxy Gear has become the world’s most popular smartwatch. They said sales were 800,000 since its launch just two months ago. This sounds good so far. Nothing to blow the doors off, but solid.

However, it’s important to take this with a grain of salt. Yes, there are other smartwatches in the marketplace, but they are not connected to the smartphone and do not deliver what the Galaxy Gear does.

So for that reason, it’s important to realize we are starting a new wave of consumer product. With that said, Samsung is the first and no other company has launched their smartwatches yet.

So when Samsung says its Galaxy Gear has become the world’s most popular smartwatch, well, of course they are. They are the only company in that space today.

Samsung is in the marketplace for the holiday shopping season, which is important. They should do well with these devices this season. Then we get to see what customers think about them. We still want to know whether these will be a hit or not.

Are these devices really industry changing, life changing, or not? Remember, tablet computers like the Apple (AAPL) iPad are successful. However the previous version, the Netbook, which was a smaller laptop, was not. So we have to wait and see.

Qualcomm is preparing to enter this fray with their Toq smartwatch on Cyber Monday. These devices obviously have no sales numbers yet, but it will be interesting to see how well they do in coming months.

The real question here is does Qualcomm want to re-enter the product arena or are they just launching this Toq as a showpiece of what they can do? This could be a great sales tool for other smartwatch makers. Of course they would have to sell well to make it all work.

Plus over the next year or two, we will see other companies jumping into the space as well. This will look very similar to the Netbook wars, and the tablet wars after that. Who will win early is no guarantee of who will win long term.

There will be several different steps over several years. The first step is this introduction. Customers love the sound of a smartwatch, but most will not buy first thing. The early adopters will jump right in.

Early adopters know they have to deal with devices that don’t work perfectly yet, but then again they have a helluva talking piece on their wrist to show off.

Then over the coming months, we’ll see the next wave jump in and try the devices, as smartwatches get stronger and better. We’ll see other companies jump into the space as well. The marketplace will change several times over the next several years. Who will lead?

One thing we will all be looking for is continued customer interest. Will this be an ongoing success like the tablet seems to be, or will it come and go like the Netbooks?

With all that said, there are still loads of questions. We’ll just have to keep our eyes on this segment to see whether it is a big success or not. Early on I would expect there to be lots of excitement and interest. The question is, will it be long term or not? We’ll just have to wait and see.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
AAPL Apple Inc. 117.65 1.05 0.90 23,320,674
MOAK Med One Oak Inc 1.00 0.00 0.00 0
QCOM QUALCOMM Incorporated 68.06 0.13 0.19 6,333,164


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