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First-to-market means diddly when it comes to smartwatches

Matt Hamblen | April 16, 2014
The old wisdom that "first-to-market" technology products will win out gets thrown out the window when it comes to smartwatches and some other wearables.

But that finding could easily change with Apple's iWatch — assuming that's the actual name — given Apple's success with the iPhone, which was introduced in 2007 and quickly displaced previous cellular handsets, including a number of BlackBerry models. The iPad had a similar effect when introduced in 2010, even though tablets with digital pen input had been on the market for years.

"There's clearly a first mover advantage" for technology products, said IDC analyst Ramon Llamas. "But if your strategy is to seek out and grab as much market share as you can because the education on a new product category has taken place, that's what I expect Apple to do. Apple is prone is stand on the shoulders of what's come before."

Llamas is one of several analysts who believe Apple will wait for the smartwatch category to slowly grow before jumping in. He believes Apple will be busy launching a larger iPhone and a different sized iPad in 2014, so to inject a new smartwatch device category would be too many devices for one year.

"Apple is comfy to sit back and let the competition suffer all the slings and arrows," Llamas said. "Look at all the criticism that greeted the Galaxy Gear," including a $300 initial cost that quickly dropped to nearly half and the need to pair it with a limited number of Samsung Galaxy smartphones and tablets.

On another front, Apple took a wait-and-see approach to Near Field Communication, now widely available in Android phones, and may never adopt the NFC approach for the iPhone in lieu of its iBeacon capability.

Motorola announced the Moto 360 smartwatch that will run on Android Wear. (Photo: Motorola)

Early-to-market probably won't even matter at all with smartwatches and related wearables. The average consumer is finding prices too high and the number of apps too limited. While the Moto 360 has won high marks for its round face and overall styling, nearly all the other rectangular models have been panned for being too large or plain ugly. That's where the sleeker, more stylish fitness bands have stepped in. Also, most smartwatches rely on a Bluetooth connection to a smartphone to access the Internet and more powerful functions — an unproven concept for many consumers.

"Apple only releases products when it thinks its technology and its market are ready for them," said Jack Gold, an analyst at J. Gold Associates. "The smartwatch market is still nascent, and waiting until 2015 won't have any detrimental effect. It's more important to Apple to do it right than to do it soon."

There comes a time when being late to market matters, but analysts don't feel the smartwatch category has reached that stage — not even close. The only thing that might matter is if a manufacturer waits too long and loses the interest of app developers who will have been building apps for a competing smartwatch platform, Moorhead said.


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