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Smart Watches are Smart – but are they Sensible?

I’m still trying to convince myself that some combination of features and design elements can make smartwatches a large-volume consumer category.

Moto 360 (Photo: Ron Amadeo)In 2014, manufacturers shipped 720,000 Android Wear watches according to Canalys – a very modest number for a consumer product – with the Moto 360 being “the clear leader” despite shipments that were constrained by insufficient supply. And LG’s round G Watch R shipped significantly more units than the original square version. That confirms the idea that style matters as much as functionality in this segment. (The Android smartwatch figures do not include the wide variety of not-so-smart fitness bands, of which a bit less than 4 million were sold last year, according to Canalys, nor do they include the sales of Pebble watches and other brands based on Tizen or other OSs, which may have accounted for another couple of million.)

BURG 31 NavyBURG 31 (Photo: BURG)BURG has an interesting approach with its just-introduced BURG 31, the “first standalone phone/safety smartwatch for kids & seniors”. BURG has incorporated just those features it judges are needed for this market segment, understanding clearly that the watches will often be purchased not by the wearer but by members of the wearer’s family. The watch functions as a stand-alone phone with included SIM card, and incorporates GPS tracking so you know where your kid is and a one-touch 911 emergency call feature that will allow the BURG 31 to replace the emergency pendants used widely be seniors. This interestingly targeted package carries a very affordable MSRP of $129 – and it’s round.

But, as usual, it is Apple that compels the attention of Wall Street and the press, even (or especially) when it is late to the game. The Apple Watch is scheduled to ship in April, and the company will hold its “Spring Forward” event next week, with an expected focus on the watch. The financial types expect the Apple Watch to significantly expand the smartwatch market.

What does “significantly” mean? Earlier this week Fortune published a survey of analysts’ estimates (see table), whose predictions average to 22.6 million units for 2015. Is it credible that Apple will sell 10 times as many smart watches in 2015 as the entire industry sold in 2014?

Analyst Predictions Apple Smart Watch Sales from FortuneAnalyst Prediction of Apple Watch Sales, 2015 (Survey and Table: Fortune)During a recent earnings call, Apple execs made much of the fact that more developers are working on apps for the phone. Does a big ecosystem of apps make sense for watches as it does for smart phones? Or does BURG have it right with “less is more?” For better or worse, Apple will establish the initial default model just because it is Apple. But this is just the beginning, and the smartwatch category will continue to embody different product strategies. – Ken Werner