Gartner: smart watches won't dominate consumer spending during the holidays
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Gartner: smart watches won't dominate consumer spending during the holidays

Despite the hype surrounding smart watches, they are unlikely to be featured on many consumers' holiday wish lists this year, according to Gartner, Inc. (www.gartner.com). The research group says that premium pricing paired with an unclear value proposition will steer consumers' spending toward tablets and fitness bands, leading to lackluster sales of smart watches this holiday season.

Smart watches are a product subset of the wearable electronics market that caters to different industry verticals and consumer groups that include fitness, health-monitoring, monitoring the elderly and law enforcement (tracking). Smart watches themselves are not a new device but they have recently evolved from the health and fitness field with an attempt to enter the mainstream consumer market by adding communication and more smart features.

"Samsung and other well-known vendors have recently entered the smart watch space, yet the products we have seen so far have been rather uninspiring in terms of design, available apps and features," says Annette Zimmermann, principal research analyst at Gartner. "As a result, Gartner predicts that wearable devices will remain a companion to mobile phones at least through 2017, with less than one percent of premium phone users opting to replace their phone with a combination of a wearable device and a tablet."

There is currently a wide spectrum of technical specifications and capabilities in current smart watch products, such as the availability and speed of processors, display technology, type of sensors, connectivity and operating systems. There are models that could potentially replace a smartphone entirely — as they include all technologies down to cellular connectivity, while others can perform message display, initiate voice calls and music streaming.

"The convenience aspect of using a watch for interaction while leaving the larger-screen phone or tablet in the bag or pocket is something that users can relate to and probably recognize its value," says Zimmermann. "However, there are still several significant barriers to mainstream adoption, including low interest and awareness among consumers, poor design and price."

Currently, due to lack of innovative design, most smart watches have not achieved mass-market appeal. The majority of products that have been designed or launched so far have displays that many consumers will find "unstylish" due to their bulkiness. Gartner said that vendors should try to find a balance between an appealing (slim) design and long battery life, as both aspects will play a significant role in consumers' purchasing decisions. Early technology adopters may not place their main emphasis on design but mainstream consumers tend to make purchase decisions based on overall appearance, material and color.

"Users expect more than just more convenience from a new product category that claims to be innovative and priced at $200 to $300," says. Zimmermann. "The same price will fund basic tablets with a good feature set. For the coming holiday season users are more likely to pick the basic tablet option rather than a smart watch as the value proposition is clearer."

What's more, providers must realize that the success of smart watches will not be decided by hardware alone; apps and interoperability across devices will be a key differentiator that will bring brand loyalty and customer engagement to those vendors investing resources in fostering the developer community.

"Interoperability and stand-alone apps give the smart watch more value on its own — that is when it is not connected to a smartphone," adds Angela McIntyre, research director at Gartner. "Even though smart watches play a 'supporting role' to smartphones, designing the smart watch only to act as a secondary device will consign it to failure. Sensors, such as accelerometers, gyroscope, infrared, microphones and cameras, will give software developers greater flexibility to create apps for a broad range of usages."

McIntyre says that interoperability between the smart watch and devices other than the smartphone or tablet would enhance their usefulness and bring new capabilities to wearers. Some smart watches include the ability to pair directly with a Bluetooth headset to keep calls private and prevent music from being overheard by those nearby. Smart watches may connect directly with Wi-Fi access points, which would enable wearers to access the Internet, send messages and make calls via voice over Internet Protocol (VoIP), independent of the smartphone.

"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," says McIntyre. "In these nascent days of the smart watch and wearable devices market, there is very low availability of apps. Once smart watches become more mainstream, vendors will face new challenges related to use in the work environment and the 'bring your own device' scenario. Enterprises have to protect their intellectual property and are starting to ask similar questions as back when the first camera-enabled phones came to market. Smart watch vendors need to engage mobile device management solution providers to increase acceptance by enterprise."

 
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