Share

Why the big time has not yet come for world’s smartwatch makers

They were hyped as the next big thing after smartphones, but tech giants have struggled to put a smartwatch on every wrist and Apple’s latest offering, aimed mainly at fitness enthusiasts, is unlikely to change that, analysts say.

Three years after smartwatches were launched to great fanfare, sales have disappointed; consumers have failed to get excited about the possibility of checking calls, texts and e-mails on the go without ever getting their phones out. Grumbles about bulky design and short battery life haven’t helped.

Global smartwatch shipments soared from five million units in 2014 to 40.3 million in 2015, according to estimates by Gartner consultancy. But the pace of growth has since slowed, with 60.4 million watches to be shipped this year and 66.3 million in 2017.

Apple’s sales decline sends smartwatch market sharply down

Industry players, however, argue there is still a lot to play for, and market leader Apple led the way earlier this month when it launched its second-generation Apple Watch.

Designed to be waterproof so you can take it swimming, with a built-in GPS for runners and cyclists, the device is most likely to appeal to sports lovers who want to track their workouts without carrying their phones.

Apple also announced an edition of the watch that was developed with Nike, which chief operating officer Jeff Williams calls “a watch designed with runners in mind”.

Wearable tech market cools, as consumers step back

With its strong emphasis on using the Apple Watch Series 2 to support a healthy lifestyle, Apple has chosen to focus on the booming fitness sector rather than target mainstream consumers, CCS Insight’s George Jijiashvili says.

“It’s still not something that will make an average consumer run out and buy one,” the wearables analyst adds.

IHS insight analyst Ian Fogg says Apple has made some sensible upgrades but the new watch is unlikely to make big waves.

Apple Watch quarterly sales plummet 55pc as consumers look ahead to next generation model

“For now, the increased fitness capabilities and Nike partnerships will keep the Apple Watch business moving, without creating a breakout new product category success for Apple as the original iPhone was nine years ago,” he says.

He argues that manufacturers need to make several technological advancements in order to appeal to a broader market than just tech geeks.

“I still think there’s a tremendous opportunity for it, but the technology needs to become better, to enable multi-day battery life, to enable ubiquitous always-on screens, to enable the size of the devices to become smaller,” he says.

The problems are all related – the devices are chunky because the screen technology and battery needed to power it requires a certain size.

Sony Mobile France director general Jean-Raoul de Gelis agrees that the sector can only push into the mainstream if “real innovations” are made.

“A smartwatch that has to be recharged every day quickly becomes irritating for the user,” he says.

“It’s not a dying market, but it’s a market that has to make more progress on technological areas.”

One of the first entrants into the smartphone market, South Korean giant Samsung, says it is seeking to tackle some of those problems by teaming up with a Swiss designer from Hublot.

Its Gear S3, third-generation smartwatch, has a round face and a battery life of three to four days. Nevertheless, it remains a big watch.

Samsung launches new smartwatch amid rumours of a new Apple Watch

Samsung does not see smartwatches becoming ersatz smartphones. Rather, it is seeking to replace conventional timepieces.

“Traditional watchmakers are trying to introduce more and more electronics into their classic watches, and we are bringing out connected watches closer to the classic format,” says Guillaume Berlemont, marketing director for mobile devices at Samsung France. “We believe that within two years, the market will just simply become the watch market.”

Jijiashvili says consumers will eventually fall in love with “smartwatches that look like traditional watches with some smartness imbedded”.

“That area will see mass market appeal,” the analyst predicts.