April 24, 2024

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[THE INVESTOR] It has been three years since Apple CEO Tim Cook said, “The Apple Watch is (the) most personal device we’ve ever created.” 

Since then, smartwatches have evolved to become smarter, sleeker and more stylish. They now feature fitness trackers and payment services, and are even waterproof. Some of them are also hybrids made with luxury fashion brands including Emporio Armani, Fossil and Michael Kors.  

Despite the fanfare, smartwatches have yet to grab the mainstream market for now. The global smartwatch market saw a whopping 350 percent growth in 2015 on-year, but the rate plummeted to 1 percent in 2016 to reach 21.1 million units, according to the US research firm, Strategy Analytics. Meanwhile, smartphones shipped 1.5 billion units last year. 

“The slow growth is simply because smartwatches have no killer apps, functions or content to make consumers -- who already own smartphones -- open their wallets,” said Kim Jong-ki, a researcher specializing in the mobile industry at the Korea Institute for Industrial Economics & Trade.

A smartwatch currently serves to tell the time, receive message notifications, make phone calls and track fitness activities -- functions that most smartphones also offer. Many features of smartwatches still lack standalone capabilities.

To differentiate smartwatches from smartphones, tech firms are focusing in fitness and health care-related functions by capitalizing on wearable features. 

Last week, Samsung Electronics unveiled its new smartwatches, Gear Sport and Gear Fit2 Pro, with updates in tracking and monitoring fitness, nutrition, sleep and heart rate. 

Apple’s upcoming Apple Watch, slated to be unveiled this month, is also expected to have improved fitness tracking and a sensor to monitor blood sugar. Apple recently hired a small team of biomedical engineers.

The world’s largest fitness tracker company Fitbit also jumped into the smartwatch market for the first time, unveiling its smartwatch Fitbit Ionic. The device tracks and monitors a user’s step count, heart rate, calories burned and sleep.  

“We feel strongly that smartwatches are a platform to deliver the most advanced health tools the market has seen,” said Fitbit CEO James Park at a prelaunch event in August, highlighting the reason why the firm joined the smartwatch race. 

However, challenges still remain. 

“Health care services of smartwatch still have limitations because professional medical care cannot be involved in digital fitness devices due to regulations,” said Shin Jae-wook, a researcher at LG Economic Research Institute.

In most nations, there are restrictions on the management of health care by nonmedical organizations due to medical and privacy protection laws. 

“But for sure, there are needs in health care among digital device users. So that is a challenge the tech firms should solve,” Shin added. 

Despite the challenges, the global smartwatch market is predicted to gradually grow -- although not exponentially -- as smartwatches are becoming more standalone and smarter, industry watchers said. 

Strategy Analytics predicted that the global smartwatch market would grow to 100 million units in 2022 from 29.7 million units this year. Apple has the largest market share with a 55 percent share, selling 11.6 million units last year, followed by Samsung’s 11.4 percent share with sales of 2.4 million units. 

By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)