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Healthy smartwatch growth seen after slow 2015

Matt Hamblen | Feb. 4, 2016
More traditional watch makers will enter the space to offer sleeker designs, Gartner says

While a number of design experts are hoping the Apple Watch 2 will come in a round design, like the Moto 360 and others, McIntyre said, "I can't say that round matters; you can still be successful with a rectangular shape," she said.

The biggest successes in popular smartwatch designs may come from traditional watch makers, McIntyre said. These watch makers, such as Tag Heuer, Fossil and Casio are entering the market. "I'm looking forward to the sleek and elegant and sporty designs that only traditional watch makers know how to perfect," she said.

Of the 1.2 billion traditional watches sold every year, nearly one-fourth are digital watches, but not smartwatches. "It seems the logical next step for those digital watches is to connect them to a phone with Bluetooth," McIntyre said.

Or maybe smartwatches will become more independent of smartphones. That's a scenario wireless carriers are expecting with new billing plans to extend a user's primary phone number for a smartphone to a wearable like a smartwatch that operates over cellular.

McIntyre expects to see more smartwatches operate over Wi-Fi and to connect users to data in the cloud. She also expects to see more watches that are capable of making payments, relying on NFC technology.

Is there an enterprise market for smartwatches?

Enterprises are thinking about how their employees who own a smartwatch can use them for work, McIntyre said. "It's more about using your own smartwatch for business purposes than an enterprise deploying smartwatches," she said.

Vendors such as have introduced apps that provide work productivity functions on a smartwatch, eliminating the need to do the same things on a smartphone. While that market is in its early days, "those products are getting interest in the market," she said.

At CES in January, Samsung said it was working with Red Hat to provide application modules for smartwatches that provide workflow and time and expense management. In one pilot project, Apple Watches are being used by ground managers at an airport in Quebec City, Quebec, to receive flight updates and gate changes delivered to their wrists, which is considered quicker than using a tablet.

In general, McIntyre agreed with other analysts that the market for smartwatches hasn't reached expectations, but she is optimistic that it will grow at healthy rates in coming years. One reason is that some buyers may have held back on buying first-generation smartwatches and are waiting for tech innovations to be tested and for designs and styles to evolve in upcoming second- and third-generation devices.

"It's taking a bit longer for the smartwatch market to be adopted, but if you are looking at consumer adoption or enterprise adoption, it's a question of how fast those markets will go up," she said.


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