Smart wristwatches the next big thing for IT industry

Many people have stopped wearing watches but the likes of Sony's SmartWatch could tempt them back. Tobias Schwarz / Reuters

Since digital clocks are present on virtually every smartphone, tablet, laptop and personal computer, many consumers are opting to do without watches altogether.

Sensing that there may be many billions of dollars to be made out of our newly vacant wrist space, the IT giants are squaring up to carve themselves slices of the new market. In addition to telling the time, "smart" watches will offer a whole range of digital communication services.

"Many people have stopped wearing watches … These devices will tempt many people back," says Chris Jones, a principal analyst at research company Canalys.

This new innovation has the potential to make or break the companies concerned, just as the introduction of smartphones and tablets enabled Apple, formerly a niche player in the PC market, to leapfrog industry giants such as Microsoft and Nokia.

"Wearable devices will be the next disruption in the mobile computing market. The devices will come in different forms - the most common today and most likely to succeed are devices/bands designed to be worn on the wrist," says Mr Jones.

Although early models may not feature voice calls, it is expected that the new generation of "smart" watches may soon start to rival mobile phones, although the industry hopes people will want to carry both initially.

"The first products will not include cellular so these will not replace phones - and will not be subsidised by carriers - but rather they will be an accessory," says Mr Jones.

Many consumers may also wish to retain their smartphones so that they can continue to watch videos or read long emails while on the move, although the combination of a "smart" watch and "smart" glasses might also solve the problem.

Rob Enderle, the principal analyst at the Enderle Group, said: "Given how displays are growing, they will supplement rather than replace the Smartphone. The latest from Samsung will have a whopping 6.3 inch display."

But the quality of the "smart" watch display will have to be higher than that of the smartphone since the watch face will often be viewed in bright sunlight, something most digital screens do not do well. This is likely to limit the functionality of the new devices initially as the "smart" watches will consume large amounts of power, even if some of the battery is in the strap. It is likely, however, that solar energy will be used to power some future models, as this is already the case with many ordinary watches.

"The devices must be reliable. The user interface must be simple, and the battery must last for days - a challenge given the amount of technology vendors need to squeeze in to a small-form factor," says Mr Jones.

The new devices will also need to be shockproof and waterproof. This is a tall order for an industry fond of producing fragile devices that cannot be splashed, dropped or treated too vigorously. This trade-off between usability and toughness could mean that some manufacturers opt for a strengthened scratch-proof screen, while others may opt for a touch-sensitive but inevitably more delicate screen.

Apple is now working on a "smart" watch with a curved screen and Microsoft is reported to be working on a touch-screen watch.

Because of the initial limitations, the number of services or applications the watches will offer will be limited at the start.

"These will have sensors such as an accelerometer, pedometer and heart rate monitor, wireless technology via Wi-Fi or Bluetooth and storage," Mr Jones said.

Monitoring of heartbeat and exercise levels will be a key application for first-generation "smart" watches. This is already a key market for the health and fitness industry, which long experimented with installing IT into wristwatches.

Since the 1990s, Finland-based Polar has been manufacturing watches that monitored the heartbeat as they told the time.

This type of fitness watch originally required the user to wear a strap around the chest to monitor the heartbeat before sending a short-range wireless signal to the watch. But the watches soon evolved to a level where they could monitor heartbeat indefinitely through the wristband. The Nike+ FuelBand offers similar fitness functionality.

However, the full potential of "smart" watches will not be realised for some time and wrist-worn devices capable of rivalling today's smartphones will take years to develop at prices suitable for most potential users.

"These are not mass market products today and will not penetrate emerging markets with current pricing. The Nike+ FuelBand retails for US$150 [Dh550], the Pebble watch is also $150," says Mr Jones.

But the next couple of years will see rapid development of the global market for "smart" watches, he says, adding: "However, more competition from big names in 2013 and 2014 will drive down prices. Many people have stopped wearing watches, Canalys believes that these devices will tempt many people back."