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Sep 8, 2016

Smartwatch Growth Takes Time

Eddie Hold, President ;

Connected Intelligence

@eddiehold

Over the past few years I’ve tried my fair share of smartwatches in various shapes and sizes, but none lasted on my wrist for more than a few days. The use case wasn’t compelling enough to justify the wrist space, particularly as each and every one of the devices felt like a compromise between tech and style. Ugly may be too strong a word, but certainly – for me at least – they did not look elegant or classy.

Instead, the smartwatch opened my eyes to the world of watches and I found myself dreaming of Rotary’s, Rolex’s and many other timepieces that I couldn’t possibly afford. If I was going to wear a watch beauty and elegance would take priority over functionality that may or may not even be of use to me.

And I’m clearly not alone. The watch industry is cautiously reaching for the champagne now that the smartwatch has failed to take over their world. While the smartwatch certainly impacted the $200-$500 watch business, many of the declines in the broader watch business are now, in hindsight, being blamed on economic and related issues, not the brash smartwatch upstart.

In the end, I embraced neither the classic watch, nor the smartwatch. Rather, my inner-nerd found a compromise and I chose a runner’s watch replete with GPS, notifications, waterproofing and (of course) step counting. But IFA 2016 has made me reconsider the smartwatch for a couple of reasons. Firstly, I may actually need a little more functionality than a sports watch can provide. I’m directionally challenged making running in new locations without Google Maps a recipe for disaster; and since I don’t run with a phone, the watch becomes a far more important tool.

But the second reason is more significant to the broader industry: the smartwatch is morphing into a device of beauty. At Samsung’s Gear S3 launch, there was far more emphasis placed on the exterior design of the device than on its innards. And it was justified - the device is a beauty. Samsung is not alone in this shift as more tech companies are taking the watch industry approach, recognizing that they need to build an elegant device first, and work on the technology second.

In that respect, it is surprising that it has taken the mobile industry a while to truly embrace this focus. After all, the mobile phone was always the eye candy that drove the mobile purchase. Few people wanted to carry an ugly phone, as Motorola proved when they launched the original Razr at the (then) ridiculous price of $500, and watched it sell out almost immediately because the device was so darn cool.

Mobile’s “cool” has now been transposed to “elegant” for the smartwatch market, and we can expect to see many more smartwatch launches that focus on the designer’s thought process, not the functionality of the product. As such, it may be a little too soon for the watch business to write off the smartwatch threat just yet.


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