A smartwatch is a watch with the same functions as a smartphone. Such a device would be extremely convenient, as it could eliminate the need to carry around a (relatively) bulky phone and pull it out of your pocket each time you need to check your Facebook or Twitter. We're still in the very early stages of this potentially massive new market. And while we now know that there are several huge players considering developing their own smartwatches, details at this point are scarce, and there are numerous rumors flying around. In this article, I'll give a summary of what's out there so far and what certain companies may have planned.
Smartwatches Already On The Market
While watches with computational power have existed for decades, it's only fairly recently that real smartwatches allowing users to communicate have come to market. The first smartwatch that could properly act like a phone was LG Display Co's (NYSE:LPL) LG-GD910, which was first demonstrated in 2008. Not many people know about this product, and it could be considered a flop - its features were limited (there was no inbuilt web-browser or working MMS) and it launched at a high price point, and thus sold poorly. Some other smartwatches released later that have not been met with outstanding reviews are the following:
- The I'm Watch, which has been criticized for being very expensive, difficult to set up, having a low battery life and some stability issues (reviews here and here).
- The Martian Passport Watch, which is cheaper than the I'm Watch (though it's still expensive) and reported as being not particularly useful.
- The Meta Watch, which is fairly priced and feature-rich, but also bulky, not particularly stylish and difficult to use (review here).
- The Pebble Watch, a new smartwatch reported to have limited features and glitches (though for a small startup it's not a bad product).
It seems to me that the most popular and well-received smartwatch on the market today is Sony's. Sony (NYSE:SNE) came out with their own smartwatch in 2012, which is very reasonably priced at $130 or less. Sony's smartwatch only works with a limited number of Android phones and isn't compatible with iOS, but otherwise works quite well (a comprehensive review can be found here). It's still arguable as to whether this is the "best" smartwatch currently on the market, and certainly there are numerous improvements that could be made. I have no doubt that there will be a better smartwatch developed sometime in the future as it looks like several tech giants are already working on one.
What Companies Are Reportedly Working On Smartwatches?
We've established that there's plenty of room for expansion and innovation in the new smartwatch industry. In the past couple of months, the following companies have been rumored to be working on smartwatches:
The latest speculation for the smartwatch industry is that MSFT will be creating its own smartwatch. This article from the Wall Street Journal ("Microsoft Working With Suppliers on Designs for Touch-Enabled Watch Device") gave rise to this rumor, as the article states "executives at suppliers" have confirmed that MSFT asked suppliers in Asia to ship components for a "potential watch-style device." MSFT itself has declined to comment. The details at this stage are sketchy, and we have no idea what MSFT's smartwatch (if it ever comes to existence) would be like.
Interestingly, all the way back in 2003, MSFT came out with technology to personalize everyday objects with its Smart Personal Objects Technology [SPOT], which would be applicable for smartwatches. They even came out with a smartwatch concept of their own. At that time, MSFT was primarily focused on its core business of software, and SPOT never took off (it was abandoned in 2008). But since then, MSFT has branched out into numerous other areas, and I wouldn't be surprised if they did expand into the smartphone industry.
With virtually unlimited resources and experience creating the most popular gadgets ever, it would seem that no company could develop a niftier smartwatch than AAPL. As with MSFT, no AAPL smartwatch has been officially confirmed yet, but it seems this will just be a matter of time. Recently 3 things have surfaced to indicate AAPL is thinking of developing a smartwatch:
- AAPL board member Bill Campbell's stated that "when you start to think about glasses or watches, they become as intimate as the cell phone was."
- AAPL posted a job listing (now removed) for a "display specialist to lead the investigation on emerging display technologies).
- AAPL has filed patents for a "Bi-stable Spring with Flexible Display," which would likely be used in an upcoming smartwatch.
Internet users have dubbed AAPL's potential new smartwatch "iWatch". I do believe that given the recent developments above and AAPL's area of business, the probability of AAPL developing a smartwatch is very high. Bloomberg states that AAPL's iWatch could be more profitable than TV, and that according to "people familiar with the company's plans" AAPL has around 100 product developers working on a wristwatch-like device. It also speculates that the iWatch could launch as soon as this year.
Even GOOG, which generates the vast majority of its revenues from online advertising, has been rumored to be developing a smartwatch. This largely stems from this patent they filed some time ago (October 2nd 2012) for a "smart-watch including flip up display." Also adding likelihood to a GOOG smartwatch is the fact that Motorola (which was acquired by GOOG) has a smartwatch called the MOTOACV (which is focused on fitness features), and GOOG may be looking to expand their influence with a new wider-reaching smartwatch. And while many only think of GOOG as an internet company, they have dabbled in hardware.
It has been 100% confirmed that SSNLF.PK will be developing a smartwatch. Last month, executive vice president Young Hee stated the following:
We've been preparing the watch product for so long. We are working very hard to get ready for it. We are preparing products for the future, and the watch is definitely one of them.
We don't know what special features SSNLF.PK's smartwatch will have, but I am sure that it will be an excellent product. Like AAPL, I regard SSNLF.PK to be one of the best companies to develop a smartwatch given their proficiency in developing smartphones. It is possible that SSNLF.PK will be able to develop a cheaper smartwatch than AAPL since they make their own displays and chips.
It is certainly exciting to see so many tech giants considering developing their own smartwatches. I am most interested in what AAPL comes up with, but it also wouldn't surprise me if MSFT, GOOG and SSNLF.PK develop a device that is totally unique. I believe the smartwatch sales will be in the billions in the coming years and it's just a question of who capitalizes on it the most.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.