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Futuresource: Traditional Watches and Smartphones on a Collision Course

At both CES and MWC this year there was a clear design drive to make smartwatches look more like analogue watches in an effort to make them seem more accessible. LG and Huawei were some of the examples at MWC. The much- rumoured Huawei watch gives its users the choice of 40 dials on a 1.4″ round Sapphire Crystal display. However, from the opposite direction we can now see traditional watches adding basic mobile connectivity. Guess Watches have partnered with Martian to design a ‘boldly designed smartwatch’ which was a hit at the MWC.

In the absence of one killer application, vendors are throwing all the features from a smartphone in to the watches to see what sticks. This is having obvious effects on the size, aesthetics and the battery life of the smartwatches. But, compared to other wearable solutions, smartwatches benefit from being generally unobtrusive, they have low barriers for consumer acceptance, are secure, and can be worn 24/7 in any location. Today, vendors and service providers can be seen presenting the watches in credible and serious roles such as; health and fitness tracking, assisted living, mobile payments and interfacing with connected cars and smartphones.

Futuresource estimate that a little over 6.1 million smartwatches were sold in 2014, and we have a market tracker to smartwatch data to track the progress of these products over the coming years. With Apple’s release of Apple Watch this market is certainly expected to accelerate rapidly. Today (Monday 9th March) will see Apple announcing the price of the watch, which will have some bearing on volume shipments for 2015. Product availability is said to be on course for April 2015.

Futuresource also expect the mid-range watch market ($100-$500 at retail) to be affected more than most – representing approximately one-third of watch volume sales. This is based on the price positioning of smartwatches in the current market, where Apple Watch is projected to be positioned together with competing watch brands such as Swatch, Fossil and Tissot.

Smartwatches are not (yet) attempting to compete in the super-luxury end of the market, from Rolex upwards in price-terms (Brietling, Beume & Mercier, Breguet, etc). Of which we would assume this market has significantly more challenges to gain acceptance, and is relatively tiny in volume terms.