Make or break for the smartwatch market?


The wearables market has perhaps been underwhelming, with awareness and sales not hitting the anticipated heights. Paul Withers explains how the Apple Watch could solve these problems – even if sales don’t match expectations

It’s already make or break time for the smartwatch market, with the early success of the Apple Watch determining the future of the segment.

Those are the stern thoughts of many of the analysts we spoke to as the Californian tech giant prepares to make its first foray into wearables, and although those statements might sound extremely exaggerated, they’re not far wrong.

The wearables market perhaps hasn’t taken off as quickly as some people had first anticipated. A survey of 15,000 smartphone owners from Kantar Worldpanel ComTech revealed just 60 per cent wear a watch but more worryingly, 84 per cent said they had no plans to buy a smartwatch.

Disappointing sales
Most of its rivals in the smartphone space, including Samsung, Sony Mobile, LG and Motorola, have all launched smartwatches and although global sales rose 155 per cent last year to 4.6 million units, it still seems comparatively low.

These numbers are expected to rocket to 75 million this year but that will be largely thanks to Apple, which is forecasted to account for up to 20 million of these, despite only launching the Watch a third of the way through 2015.

However, this is what Apple does best and it has a well-documented history of being later to market than others with products (smartphones) but still turning the segment on its head.

Remember, it has managed to sell more than 700 million iPhones since 2007 from a standing start and continues to dominate the smartphone space at the expense of more established manufacturers.

Strong fanbase
The key to that has been Apple’s loyal fan base, which stretches across  PCs, laptops, tablets and iPods. Many eyes will be on them to see how they react to the company entering this segment for the first time, the features the Watch provides, differentiators and the wide-ranging pricing for it, which is between £300 and £13,500.

Apple already has a platform to build from in the smartwatch space as the Watch will be especially beneficial to the 280 million iPhone users that will be able to pair it up to their smartphone.

Regardless of this, the Apple Watch will sell in many millions. After all, the manufacturer could release its most disappointing product yet and it would most likely still fly off the shelves.

Raising awareness
CCS Insight chief of research Ben Wood for example has gone as far to say that Apple Watch will be the market leader within the segment as soon as 48 hours after going on sale and will “obliterate” every other smartwatch.

Based on that statement, there will be a part of Apple’s rivals that may well be looking forward to the launch of the Watch. Weird isn’t it?

Apple’s role, regardless of whether the Watch matches sales expectations or not, will be instrumental in raising the relatively low consumer awareness throughout the market, and many will buy it due to their already overwhelming loyalty to the brand. This to some degree will benefit its competitors too.

For that reason, the smartwatch market can look forward to a bright future. Without the Apple Watch, it may not have survived for too much longer.