IDC and Swiss watch makers announce big expectations for Android Wear

swiss watch

IDC released its wearable report today predicting continued wearables growth reaching 110 million units by the end of 2016. All types of wearables, smartwatches, health and fitness bands and other are included in this forecast growing at a year over year rate of 38.2%. IDC expects the category to grow to 237 million by 2020.

Android Wear is predicted to almost catch up to the Apple Watch by 2020, virtually eliminating the lead that Apple has enjoyed since its announcement. Apple’s marketshare in the category is expected to drop to 38% from almost 50% while Android Wear grows from about 21% to 35%.

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According to a Reuters’ report about the Baselworld watch and jeweler show published today there seems to be a few reasons for the growth in this category and the growth of Android Wear.

Forecasts of smartwatch shipments growing from $1.3 billion in 2014 to $117 billion in 2020 and smartwatch shipments overtaking that of traditional watches in the fourth quarter of 2015 precipitated the Swiss watch makers’ change of course.

idc smartwatches

According to Rueters few watch makers have the technological capabilities to design and manufacture touch enabled and connected watches except for Swatch, leaving manufacturers with just a handful of choices. WatchOS, Apple’s proprietary watch operating system isn’t available for license by watch makers, leaving Android Wear far in the lead of RTOS, Tizen, Android (AOSP) and Linux.

The shift to smartwatches caused some controversy, reports Bloomberg. Patek Philippe Chairman Thierry Stern disparaged Tag Heuer calling into question partnership with Intel and Google. He questioned Tag Heuer’s technical skill and the company’s judgment in choosing to compete with marketing powerhouse Apple. He also said that in its attempt to compete with Apple, Tag Heuer was sacrificing quality. He went so far as to speak for the Swiss watch industry saying “if they’re willing to try to kill the quality of the Swiss product, I think they’re on a very good track.”

Tag Heuer CEO Jean-Claude Biver retorted that Tag Heuer’s smartwatch has been selling out and will keep its value against the Apple Watch because it’s more exclusive at $15,000. Distancing Tag Heuer from Apple, Biver said that perhaps Swiss watch makers producing watches that cost between $300 and $1,500 have a problem.

No company building a new product would build its own new operating systems. Car manufacturers have decided on RTOS and Linux inside the dashboard because they know how to build cars better than operating systems. It would be foolhardy for a watch maker without a history of developing software to invest in building a smartwatch with proprietary software. For watch makers, like car makers, it's simply a matter of choosing from a list of the alternatives, reported IDC.

It would be equally foolhardy for a watch maker to ignore the smartwatch shift and continue to serve the declining population of traditional watch buyers.

Some of the Android Wear Baselworld announcements by major brands are:

  • TAG Heuer announced that it will expand its partnership announced last year with Google and Intel to 6 to 8 Android Wear models next year. In a separate report by Reuters, Tag Heuer parent Hublot said that it is looking into producing additional Android Wear models under its LVMH brand name.
  • Fossil announced two Android smartwatches.
  • Nixon's Android Wear smartwatch with 100m water resistance.
  • Casio introduced an Android Wear sport watch following one introduced in January.
  • Michael Kors announced the Michael Kors Access collection with interchangeable leather and silicone wristbands and glamorous versions for women and sporty versions for men

Next year’s Baselworld will prove whether Stern or Biver made the right decisions. My bet, Biver made the right choice.

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