Two and a half years since its introduction, Apple Watch is seeing increased momentum as market analysts suggest both rising market share and significant growth in sales. Android Wear on the other hand has not been so fortunate with decreased attention from both Google and their hardware partners.
It is one thing to say that Apple has won this first round of the wearables battle. However, it is still very very early in the game. The larger question is what will the landscape look like when wearables reach say 50 percent market penetration, because it is only until then that the winners will become so consolidated, entrenched and seemingly invincible. Before that, markets tend to remain a battle among many where anybody could win the next day.
We know that Apple has continued to refine the Apple Watch. Notable progress has been made in both performance and battery life. Recently, it has become possible to fit LTE connectivity without making the device unmanageably huge. On the marketing and value proposition side, Apple has shifted away from luxury and has moved towards fitness and health. On top of this, they are increasingly using AI to surface relevant information on the small screen, and making small but significant UI tweaks. As a result, we are quickly approaching the point where the value of a wearable would become easy to understand and widely recognised.
On the other hand, Apple still refuses to link the Apple Watch to Android smartphones. The only way to enjoy the Apple Watch remains to own an iPhone. This will create a gap in the market where Android users will increasingly want to own a good smartwatch, but cannot find anything that is compatible with their phone. This gap will only widen in 2018, as the Apple Watch enjoys further success.
OEMs will rush in to fill in this gap. With the lacklustre progress in VR headsets, drones and other gadgets that distracted them for the last couple of years, they will come back to the device that Apple has demonstrated a market exists for. I predict that in at least the later half of 2018, we will see hardware OEMs come back to smartphones.
Google’s attention is a bit more difficult to predict. They are preoccupied with AI and following Amazon’s lead in smart speakers. If so, we might see improved Android Wear hardware, but very little progress in the OS.
From my point of view, it is inevitable that Android users will start to want to have an Apple Watch equivalent. What I’m not sure about is whether their needs will be satisfied by Android Wear or by Samsung’s Tizen, but the fact remains that a significant chunk of the 80% of total smartphone users who don’t have an iPhone, will want a nice smartwatch too.
Naofumi Kagami 