Apple Watch price strategy to limit its market share:  Gartner

Apple Watch price strategy is set to limit its market share in the smartwatch segment in the world, said Gartner.

In fact, Chinese device vendors will be scoring high in the smartwatch category.

The price of Android-Based Smartwatches will reach $150 as Chinese OEMs and ODMs capture the consumer mass market in China and internationally by 2015, said Gartner. Apple Watch costs $349 in the U.S. This is the minimum price.

By 2016, smartwatches will comprise about 40 percent of consumer wristworn devices.

Seven out of the top 10 smartphone vendors have entered the wearables market to date or are about to ship a first product, while a year ago two vendors were in that space.

Apple Watch Edition

Last week, Apple introduced three smartwatch models that will sell at a wide price range, with the lowest starting at $349.

“Apple has finally unveiled its Apple Watch, which we expect to trigger more consumer interest once it starts shipping in 2015. Apple’s high-price strategy for the Watch will limit its market share. Thanks to its attention to design and the user interface, Apple Watch will attract many users,” said Angela McIntyre, research director at Gartner.

Apple Watch is here

Analysys Mason on Apple Watch

Contrary to Gartner report Analysys Mason last week said that Apple’s wearable will significantly slow down sales of competing devices in the final quarter of 2014 as consumers wait for the Apple Watch to reach stores in Q1 2015.

The size of the smartwatch market will be under 1 million by the end of 2014. “Tis will leap to 13.6 million in 2015 following the Apple Watch launch,” said Enrique Velasco-Castillo, digital economy analyst at Analysys Mason.

According to Analysys Mason, by 2020 the size of smartwatch market will be worth $12.9 billion annually for developed markets, with an installed base of 92.6 million devices.

Analysys Mason says Apple will drive this market. Other manufacturers will benefit from increased interest and awareness in smartwatches as a credible device type. Competing vendors will not be matching Apple in the short or medium term.

Apple Watch has some major disadvantages as well.

“Disappointing after all the talk of personal devices, freedom and flexibility than an iPhone is needed to make it work. Wasn’t expecting full phone functionality (a la Samsung Galaxy Gear S), but something that would work as a stand-alone at least some of the time would have been a nice option (this may still be the case of course when we get more details),” said Paul Jackson, Practice Lead, Media and Entertainment, Ovum.

Smartwatch trends

In 2014, the smartwatch industry is seeing a few more positive developments in terms of design and user experience (UX). Consumers will to show more interest in these products in the second half of the year, said Gartner.

“Latest smartwatches show much improvement in design compared with earlier smartwatches as well as providing an idea of the features that Android Wear brings to the user, including voice search, turn-by-turn navigation, contextual reminders and taking notes via voice input — basically a Google Now experience on a smaller screen,” said Annette Zimmermann, research director at Gartner.

Gartner analysts are seeing two opposing trends in the market with regards to form factor evolution.

There are vendors offering smart wrist-wearables in a familiar watch-like form factor. “On the other hand in the past six to nine months, we have seen vendors launching products that resemble the early fitness wristbands, but come with displays that add significant functionality, including message and call alerts,” Zimmermann added.

Baburajan K
editor@gizmolead.com

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