Why I am Skeptical About Smart Watches

There is significantly more hype than substance around the smart watch category. While I completely agree there is a market for these products, I am still unconvinced the size of the market / opportunity is as large as others do.

Smart watches appeal to me entirely. I am an early adopter and a techie so I like many things that more normal consumers do. So I grasp the appeal of a smart watch. But I also know that my gadget desires to not reflect the mass market in most cases. So in order to understand the smart watch opportunity we need to land on what the form factor offers your mainstream consumer who represents the largest market opportunity.

Notifications

The primary value proposition being touted of the smart watch is notifications. These are the same notifications which a consumer would receive on their phone. So the logic behind the value proposition goes like this. You have your phone in your purse or pocket and when a notification like a incoming call, text message, email, etc., comes in it will alert you on your smart watch.

The strongest value proposition is one of convenience. The only problem with this value proposition is that the percieved value of this proposition is not universal. The conveneince of getting a notification on your wrist so you don’t have to pull out your phone of your pocket or purse has a limited appeal.

From my use with smart watches I’ve encountered and interesting dilemma. While I am in a meeting or at a lunch or dinner and I get a call or text or other notfication it is convenient to get a message on my wrist but I’m not in a context where I can do anything about it unless it is an emergency. In fact, in the same way that it is viewed as soically rude to be checking your phone every time it buzzes or makes noise in a meeting or lunch or dinner it feels equally rude to be chekcing your watch all the time. So where I thought I would want notifacations, I came to realize I didn’t unless it was an emergency.

Enter the need for smart filters for your smart watch. Meta, the rebranded name of the company Meta Watch, has filters built into their software that lets you choose which notifications to alert you and which to not. While Pebble does not have filters they have recently added the addition of a “do not distrub mode.” Which I found that I used to turn off notifications in nealry every context where I initially thought I wanted notifications.

The watch by itself requires the smartphone or another connected device to derive its value. The value features of the smartphone are extracted from the phone and placed elsewhere. Again, I don’t doubt this is valuable to a segment of the market. I simply struggle to believe it is a mass market solution.

Not a single product I use today is anywhere near ready of the mass market and I often struggle if it is even a mass market solution at all.

An iWatch

This leads us to the inveitable question about what Apple could do in this category. On this question I have several thoughts.

Let me first start off and state that while I understand those heavily vested in Apple’s future there is a sense that they need to attack a new or disrupt an existing category in order to march forward. I don’t personally believe this is true, although I see the investor point of view on this, but I will address this at a later date. Let me just say on this point, that China is Apple’s growth opportunity. More on this at a later date.

The fundamental challenges facing Apple with a watch form factor is in the required diversity of design in order to come remotely close to addressing the mass market. This is an area where one product design will not cover all the bases. Watches, for those who wear them, are extremely personal choices from a fashion standpoint and even more than smartphones in this regard. In order to Apple to be able to address a larger market they would need to offer a lineup from of these products. Perhaps not on day one but diversity in fashion is the key for every brand that choses to compete there. This tact is required if they are going after existing watch market customers or ones who are at least interested in a watch.

The other point worth considering is whether Apple can attract customers who aren’t watch wearers already or didn’t have any previous interest in a watch. Again, this is a harder sell than any other offering Apple has made in personal electronics. While our firm didn’t predict the iPod we saw and projected the market opportunity for music devices embracing the shift from analog to digital. And with the iPhone the market opportunity was clear even before Apple entered it. Even before the iPad we outlined outlined the market opportunity for tablets as we continue to do today. So it is within this industry and market context that we still remain skeptical of Apple’s offering being a watch at least at this point in time. While Apple’s products were not necessarily foreseen a market opportunity was. Many fundamentals of the technology market would still need to evolve for this category to make sesne outside of just the predicable early adopter category. These are not things we are certain even happen. Even before things like the iPod, iPhone, and iPad, as we speculate what Apple could do we could a market play that appealed to a wide audience. We don’t see this for smart watches.

I certainly understand the logic that people believe Apple can come in and do it right and show the market how to make one of these products. This is certainly how they operate, however, as I outlined above the market opportunity was clear before they entered with the right product. The smart watch is a category where this is not the case and may never be.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

7 thoughts on “Why I am Skeptical About Smart Watches”

  1. Are there any smart watches targeted to women?

    Every smart watch that I’ve seen seems to be targeting either the technology geek market (which doesn’t preclude women but where the female segment is almost certainly small) or men’s watch market.

    It seems to me that If you are starting out of the gate with a new product category with only half the potential market being addressed, you have a big problem.

    1. I am yet to see anything directly targeting women. I saw a number of brands at CES, which I have zero faith will actually get to market, have alterations on colors, but all were big and dorky.

    2. The problem is that current technology requires a smart watch that does anything to be big, much bigger than anything most women would consider wearing. They also don’t fit very well around a small wrist.

  2. Most of the watches i saw at CES were very colorful and appropriate to be worn by teenagers. Almost none were focused on being worn with “boardroom” attire. Once you move to a Rolex, Breitling, etc, it’s hard to go back. I’m neither, but like Ben, i don’t find a compelling reason to own one.

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