LAS VEGAS — The smart watch segment has attracted a handful of large established companies and its share of start-ups, and more companies will enter the nascent market to compete with them here at International CES.
Analysts expect the market to remain fledging for several years.
Big names such as Samsung and Sony have already entered the space, and chipmaker Qualcomm began shipping its first product in December direct to consumers. The watch will be on display. For its part, newcomer Martian Watches launched its first products in 2013 and is coming to CES with one more model.
These companies will be joined at CES by such smart watch first-timers as CE maker E Fun, Yifang Digital and start-up Neptune.
And GPS supplier Magellan is expanding its smart watch selection here at CES.
Newcomers will share the same — challenges as current smart watch suppliers — turning their products from a nice-to-have device into a must-have device, analysts said. That means better design, more apps and a lower price, they said.
“For wearables to be successful, they need to add to the user experience by complementing and enhancing what other devices already offer,” said Gartner research VP Carolina Milanesi. “They also have to be stylish yet practical and, most of all, hit the right price point.”
In the short term, she said, “we expect consumers to look at wearables as nice to have rather than a must-have, leaving smartphones to play the role of our faithful companion throughout the day.”
Smart watches are not only in their infancy in sales but also in capabilities, said Chetan Sharma Consulting. Most wearable smart devices “are where smartphones were in the late nineties — basic, functional and full of possibilities,” the company said. The evolution of wearables, however, “will be much quicker,” it added.
For her part, principal Gartner analyst Annette Zimmermann cited “several significant barriers to mainstream adoption, including low interest and awareness among consumers, poor design and price.”
Although leaving a larger-screen phone or tablet in a handbag or pocket “is something that users can relate to and probably recognize its value,” Zimmermann explained, “users expect more than just more convenience from a new product category that claims to be innovative and priced at $200 to $300. That amount of money pays for a basic tablet with a good feature set, she noted.
The majority of products launched in 2013, she added, “have displays that many consumers will find unstylish due to their bulkiness.” Vendors should try to find a balance between a slim design and long battery life because both features will play a significant role in consumers’ purchasing decision, she said.
She also advised that designing a smart watch “only to act as a secondary device will consign it to failure.” Incorporating accelerometers, gyroscope, infrared, microphones and cameras “will give software developers greater flexibility to create apps for a broad range of usages,” she explained.
As a result, “bringing smart watches to life will mean vendors must be involved in fostering the developer community. Just as for smartphones and tablets, wearers will naturally expect numerous apps and services,” she said. For now, app availability for smart watches is low.
Smart watches are a segment of the consumer wearable electronics segment, which includes smart watches, activity trackers, wearable GPS, heart-rate monitors and smart glasses. Their combined worldwide sales were forecast to hit $8 billion worldwide at the factory level in 2013 and reach about $20 billion by 2017, said Futuresource Consulting.
Fitness devices made up a projected 97 percent of 2013 sales, said Oliver Rowntree, research analyst at Futuresource, “though this will fall dramatically as smart watch and smart glasses categories develop and products ship with embedded sensors that track and analyze movements and activity, cannibalizing some the functionality of dedicated fitness products.”
(See story at left for details of new products on display at International CES.)