Premium brands to offer additional functionalities to boost adoption

More than 100 million smartwatches will be in use worldwide by 2019, with a host of premium brand launches over the next 12 to18 months, bringing the category into mainstream consumer consciousness new research shows.

Differentiation is now shifting from smartwatch hardware towards other features that allow new capabilities, such as GPS and NFC connectivity, the report from Juniper Research states. It argues that these functionalities are likely to become standard in the next few years, particularly as Apple has offered payment and NFC capability via the Apple Watch.

The report also claims that the range of functionality available means that it is unlikely that a ‘killer app’ for smartwatches would evolve. It cites the example of Fitbit, which grew to dominance in the fitness space with a mantra of ‘one size doesn’t fit all’, and varying device form factor. 

The report argues that, given the greater scope for development in smartwatches, the industry should not expect a single capability to make or break the category.

Additionally, the report argues that as international vendors including Google, Apple, Sony, and LG roll out high end products, demand for notification-based watches like the Martian Notifier will diminish, even in markets where budget pricing is the biggest purchase driver. Hence, the report says that smaller players will need to respond to increasing consumer expectations or lose further market share.

Smartwatches will slowly gain more sales outlets as brands outside the technology sector, such as luxury watch maker TAG Heuer, enter the smartwatch space, Juniper added. However, high functionality and premium branding means that the average smartwatch price will remain above $200 until 2020 at the earliest.