The Right Time? Smart-Watch Hype May Be Premature
The runaway success of the Pebble doesn't mean that everyone will be getting a smart watch.
While Google Glass grabs most headlines for "wearable tech," connected wristwatches are also generating excitement. The fervor started, as is often the case, on Kickstarter.
A project called Pebble sought $100,000 in backing and instead got nearly $2.3 million to make a watch with an e-ink display (think Kindle) that connects over Bluetooth to display notifications and other info from iPhones and Android phones. More than 93,000 units of the $150 Pebble Smart Watch have already sold worldwide (either directly from Pebble or from Best Buy). [See also: Top 10 Kickstarter Tech Projects of 2013]
But early-adopter excitement doesn't always translate to mainstream adoption as quickly as some people hope, said Shawn DuBravac, chief economist and director of research at the Consumer Electronics Association (the organization behind CES). "I like to say there is a 50,000-unit market for everything," he wrote in a blog post earlier this year. "It is the next few hundred thousand that are more difficult to sell."
Last week, DuBravac tweeted to discount a prediction by research firm Canalys that 500,000 smart watches will be sold globally by the end of this year and an additional 5 million by the end of 2014. "Various tech product [pundits] just assume [sales] will grow forever," DuBravac told us.
"I’m bullish on the category," he said, "but just think the math is wrong for a new category." The market, which also features models from Sony as well as from smaller companies, such as Martian Watch and i'm Watch, won't get nearly as big as the market for smartphones. In fact, DuBravac predicted that only about 30 percent of smartphone owners will opt for a second screen on their wrist.
"It kind of cohabitates with your smartphone, but it also competes with your smartphone," he said, adding that no device has won a fight with a smartphone, including, for example, the point-and-shoot camera.
But just as the smartphone has largely replaced the point-and-shoot camera, a smart watch might replace other one-trick gadgets, such as wearable fitness trackers like the Fitbit Flex. Pebble highlights fitness monitors among the key apps for the watch, which uses a connected phone's GPS data to measure speed, distance and pace. Further, connecting to a smartphone would allow a smart watch to take advantage of its accelerometers and other sensors to gather more information.
Apple to the rescue?
Some product categories remain niche markets until the right model comes by — and often, that model comes from Apple. The iPod, iPhone and iPad all brought moribund categories to life, as did Amazon's Kindle for e-readers.
"You've got a lot of people who will line up and buy a product because they are strong believers in that brand and that name," said DuBravac. "Apple has a very strong following. Samsung and some others are getting a strong following."
An iWatch or similar blockbuster product could speed up adoption of the technology but not necessarily make it more of a household item, DuBravac said. "I don't know that it changes the market size for the category over a longer horizon," he said.