It’s everyone versus Apple in the battle for the smartwatch.
While tech giants Intel and Google and start-up darlings Pebble and Mistfit were first to the field, it’s the Apple Watch that continues to dominate the conversation in the fast-growing sector.
Smartwatches are Dick Tracy realized — miniature computers that strap to the wrist and can do everything from count steps, get directions, display photos, receive texts, send reminders and, oh yeah, tell time. They have their limitations, from battery life to functionality. The Apple Watch, for instance, needs to be paired with an iPhone to use many of its high-tech features and so it doesn’t save the user from carrying two devices. But there’s more over the horizon for the category, from video chats and phone-free Internet connections to health tracking and whatever the wizard app developers can cook up.
Cook has his foot on the accelerator, pushing the sleek hybrid out to 5,000 locations in 32 countries. Its new operating system better utilizes the watch’s microphone, speaker and heart-rate sensor.
“Apple Watch has already had a tremendous effect on customers’ health and fitness, and the stories we’re hearing about its impact are truly inspirational,” Cook crowed. “I personally heard from people who credit Apple Watch with saving their lives, and customers are finding new applications all the time in their day-to-day activities.”
Traditional brands, while not yet claiming to be saving lives, are starting to rise to this challenge and come to market with their own intelligent offerings. Swatch’s first smartwatch was introduced in September, while Fossil joined the fray last month with a smart bracelet and Tag Heuer will release its much-anticipated version Nov. 9, priced at the high end of the market, around $1,800. Breitling will introduce its own version on Dec. 16.
But the tried-and-true watch names could be in for a tough slog as they square off against the extremely well-funded and digitally savvy Apple. (Hermès is something of an outlier and has teamed with Apple, creating a $1,100 to $1,500 version of the Apple Watch.)
“In the long term, my bet is on Apple crushing the market in smartwatches,” said Maureen Mullen, cofounder and head of research at L2 Inc. “Apple singlehandedly determines how big the smartwatch market is and everything else is a rounding error. Whether or not the smartwatch becomes mainstream is dependent almost entirely on Apple’s next product release and if they can tackle some of the challenges of the watch.”
Those challenges include: the Apple Watch’s reliance on the iPhone to log on, a lack of utility and its need for daily charging. If Apple can overcome two of those three hurdles, she said the market will “all of a sudden get much bigger.”
Already, many of the early adopters — Pebble and Misfit included — are starting to get pushed out of the way, and Mullen argued that the first efforts from fashion players will fall flat unless they pull together in collaboration with a tech partner.
Tim Cook and his design chief Jony Ive notwithstanding — fashion’s gunning for the smartwatch category and teaming up where necessary. “We’re going big,” said Jill Elliott-Sones, chief creative officer of Fossil Group Inc., “We see this as being a really disruptive force in the whole accessories category.”
Elliott-Sones said the brand’s connected devices would soon be a meaningful portion of its business, with every product having some type of connected functionality in five to 10 years.
Fossil’s current offering, born out of a partnership with Google and Intel, ranges from $125 fitness trackers to up to $195 for connected watches, with styles that look like traditional timepieces but have a module inside the face that connects to a phone. Next month, Fossil will introduce the $275 Founder, a true smartwatch with a full display Androidwear screen.
There’s plenty of room for improvement in the category.
John Bowden, a partner at Coalition Ventures, said connected watches still need to get “smarter” before they create much additional value for the wearer. Until there is something actionable wearers can do with these data, the information is “going to waste” and “getting misinterpreted,” he said.
“I always associate the primary functionality of a smart wristband/watch to be that of a fitness tracker,” Bowden said. “If that isn’t the case and these companies want to provide more value, then what can that device accomplish that isn’t already possible in other devices? The iPhone created digital mobility.”
For smartwatches to succeed, they are going to have to be both useful and attractive for the price.
“We’re focusing on broad market,” said Jacob Surber, senior product manager at Pebble Tech, which will unveil its first round timepiece on Nov. 8. The $249 Pebble Time Round is the brand’s most fashion-forward product and its lightest.
“Just because you don’t want to spend $500 on a watch doesn’t mean that it has to look terrible,” Surber said. “This looks great but is functional.”
Misfit, another early player in the space, is still confident about its positioning. The company’s devices don’t have screens and start at about $20 and go up to $169 for a Swarovski collaboration, and come with a battery that lasts from four to six months.
“It’s not a smartwatch, it’s an intelligent wearable,” said Matthew Loyd, Misfit’s chief marketing officer. “It does work as a watch, too. I think from a fashion standpoint, having a device that’s super-versatile is hard to do with a screen. People check their phones, on average, 150 times per day. Not everyone wants to have a screen on their wrist.”
But people might also want a little high-tech bling.
Erica Orange, executive vice president and chief operating officer of The Future Hunters, said a “luxury differentiator” might change the dynamic in the sector, with a high-end brand, and not utility or technology, sending prices up to $1,000 on a smartwatch.
“The price tag on the Tag Heuer and the Hermès smartwatches is superhigh — meaning it’s out of reach for the average consumer,” Orange said.
“It’ll have the same cachet that luxury handbags used to have before retail became more democratized.”
And that’s a game that fashion plays well — maybe better even than Apple.