Android Wear to Beat Apple Watch?

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According to a new report from research firm Gartner, smartwatches are primed to take off, with Android Wear leading the way. Sort of.

Gartner expects that by 2016, smartwatches will comprise around 40% of wristworn devices. That sounds like a lot, but these "devices" exclude traditional, unconnected watches. More than a billion traditional watches are sold each year, so Gartner's not yet saying Rolex and other high-end watchmakers need to start worrying.

"The traditional watch market is alive and well," Gartner research director Angela McIntyre told InformationWeek.

She said the report refers to connected wristworn devices that include not only new entries such as Apple Watch, but also various medical devices, as well as familiar consumer fitness products from companies such as FitBit and Jawbone. She said that within this group, full-blown smartwatches will increasingly become the norm. McIntyre added that despite this growth, conventional watches will likely far outnumber the new devices, at least over the next few years.

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To distinguish smartwatches from other wristworn devices, Gartner defined smartwatches as offering convenient communications and apps. Such devices generally have a small screen for the user to discretely receive notifications and messages, McIntyre said. Many of them must also be paired with a compatible smartphone in order to work.

She said products such as runner's watches and fitness bands qualify as wristworn devices but not as smartwatches. She countered, however, that "smartwatches can have the functionality of a fitness band." For example, both Apple Watch and Samsung's Galaxy Gear emphasize fitness, and patents suggest Microsoft could soon join in. Over time, fitness bands that don't include communications capabilities and apps could struggle to compete.

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Because they function as status symbols and examples of precise mechanical craftsmanship, the most expensive watches might be somewhat insulated from the digital revolution, but McIntyre said more consumer-oriented mainstream watchmakers will have to embrace software. An executive from Fossil made precisely this point at Intel's recent developers' conference.

Gartner derived its estimate from several factors, including a survey the firm conducted last spring that indicated more U.S. households currently own fitness wristbands than own sports watches. The firm noted that fitness bands enjoy greater adoption even though sports watches have been available for years.

Gartner also noted that device manufacturers and component suppliers are ramping up their investments in wearable products. Including Apple, seven of the top 10 smartphone makers have entered the smartwatch market, up from only two a year ago.

Gartner analysts expect the Apple Watch to "attract many users," but say its high price and dependence on the iPhone will limit its market share. Android has become the most widely-used smartphone OS partly because Android devices are available at a variety of prices, including dirt-cheap

handsets that are popular in emerging markets. Gartner suspects Android Wear could similarly rise to prominence in the wearables market, and that smartwatches running Android might cost less than $150 on average. The Apple Watch, in contrast, will start at $349, with rumors suggesting the gold Apple Watch Edition model could cost as much as $5,000.

Gartner's report criticizes early smartwatches from Samsung and Sony as "unclear" in their value proposition, but says Android Wear is promising because it effectively offers a Google Now personal-assistant experience made for tiny, portable screens.

Nevertheless, current wearable devices don't have a great track record. According to a report released earlier this year by Endeavour Partners, over half of respondents who own or owned an activity tracker or fitness band stopped using it. One-third of people who purchased a tracker abandoned it within six months.

These statistics might demonstrate why communication functionality and apps are necessary for wearables to achieve wide adoption; smartwatches are supposed to be lifestyle devices, after all, not just accessories for fitness buffs. But the statistics might also demonstrate that industry experts are more excited about wearables than consumers are.

McIntyre said figures like those from Endeavour aren't as troubling as they appear. She conceded some percentage of users will drop a wearable device because it doesn't work as well as they'd hoped. In other cases, however, she said low use might not indicate dissatisfaction. If a runner gets the same general results each time he wears his smartwatch, he might conclude he's learned what he needs to know and stop using the device, for example. Others might have purchased the device for a specific goal, such as losing weight or training for a marathon. Once the goal is achieved, the user naturally uses the fitness tracker less frequently, McIntyre said.

She said smartwatches with more accurate sensors could appeal to the "quantified self" crowd, but that the communications capabilities will help new devices achieve greater success than dedicated fitness devices. Before that happens, though, smartwatch makers will have to answer several lingering questions. McIntyre said battery life continues to be a major concern, for example, and that fitness and health applications open a world of privacy and security fears.

Will smartwatches live up to the new hype? Forrester analysts have been touting Google Glass for over a year, and that product still hasn't broken through. Now that wearables manufacturers are more focused on the wrist than the eyes, will adoption finally take off? Let us know what you think in the comments.

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