Galaxy Gear: Samsung's big move to one-up Apple

The Korean electronics giant wants to be seen as an innovator, not a follower, but it's unclear how many people will buy the first version of the smartwatch.

Samsung Galaxy Gear will be available in the coming weeks. Josh Miller/CNET
With the launch of the Galaxy Gear smartwatch, Samsung has declared that it's done being a follower. Whether the market will agree is unclear.

Samsung has had a bit of an inferiority complex when it comes to mobile. It's the world's biggest handset vendor, but Samsung is forever compared to Apple and often found to be lacking in one way or the other. Either it's the plasticky feel of its devices or the hard-knocks lesson that its features, like eye scrolling, don't always run as smoothly as expected. Most of all, it's the perception that Samsung is a me-too company, creating devices already perfected by Apple.

Gear represents Samsung's chance to break with the view that it's simply a fast follower. No, Samsung isn't the first company to release a smartwatch, and Gear isn't its first attempt in that market . But of all the smartwatch makers out there, Samsung is the only one with the large user base, marketing oomph, and brand awareness to actually gain some traction. Gear is Samsung's opportunity to show it can make something innovative and buzzy and establish itself as a leader early on. In that, at least, it has succeeded; this time around, it's Apple playing catch-up.

Apple has hinted at future device categories, but it's uncertain when it may launch a wearable or what the product exactly will do. Market watchers have speculated about an iWatch release either later this year or in 2014. In the meantime, Samsung will face a bevy of rivals already in the market. That includes Sony,Pebble, and Martian, and chipmaker Qualcomm launched its own smartwatch Wednesday. Even if those don't have high sales numbers, they have been generating plenty of buzz.

However, whether Samsung will be able to generate sizable sales of its own is a big question mark. Gear at first will be limited to buyers of the company's Galaxy Note 3 phablet, something that will sharply lower the number of potential users. It will soon be compatible with other devices, but those too will be limited to Samsung's other high-end products like its Galaxy S and Note lines. While Gear could help Samsung attract new customers and build its ecosystem, the company has nothing close to Apple's hold over its consumers. It's also questionable whether Gear's features will attract a mass audience or whether they'll only appeal to a small group of early adopters

"At the end of the day, consumer attitude is critical here," Juniper Research analyst Nitin Bhas said. "Not every human being has the same level of technology comprehension [as Apple and Samsung fanboys]. ... Smartwatches are going to be a great market, but compared to smartphones or tablets, they're going to continue to be a niche market."

Gear initially will work only with the Galaxy Note 3 phablet. Josh Miller/CNET
Juniper estimates that app-enabled smartwatch shipments will total only about 1 million this year but jump to 36 million by 2018. The estimate assumes essentially all future volume will come from Samsung and Apple, Bhas said. Other firms peg the total wearable market at about 75 million units in 2017, which makes it much smaller than mobile devices but still an attractive area for electronics makers. Smartphone shipments, meanwhile, should reach 1.7 billion units in 2017, according to IDC.

Samsung unveiled Gear on Wednesday during a splashy event at the IFA consumer electronics show in Berlin and at a simultaneous broadcast in New York. The $299 smartwatch will be available in the U.S. in October. It sports a 1.63-inch super AMOLED screen surrounded by a metal frame and includes a 1.9-megapixel camera embedded into the rubberized band. Gear runs Android and syncs with Galaxy smartphones and tablets, allowing users to do things like control their music or check messages without touching their mobile devices. While Gear initially only works with the Note 3 phablet, it soon will extend to the Galaxy S4 and Note 2.

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The initial version of Gear is unlikely to be a complete game changer, partly because of its limitations out of the gate. But in Samsung's mind, blockbuster sales for the first iteration of Gear may not be crucial. Once the company targets a market, it throws all of its efforts behind that push, introducing more and more versions of a device until one takes off. Samsung followed the same strategy with the Galaxy S line, and that focus allowed it to dominate the smartphone market by the time the third and fourth generations came out. The company views wearables as a key growth area going forward, so there's no doubt that it's already working on future designs, including models with flexible displays.

Samsung itself acknowledges that Gear will likely be a small market at first. JK Shin, Samsung co-CEO and head of the company's mobile business, believes Samsung may sell two or three watches for every 10 Galaxy Note 3 devices, according to The Wall Street Journal. And Dong-hoon Chang, Samsung's head designer, recently told CNET that in the near term, smartwatches will only be accessories for smartphones, something that will limit their uptake.

"You never know what's going to happen in the future," Chang said. "For the time being, of course, it will not be as big as the smartphone market, but maybe in the coming two to three years, it will become quite sizable."

Even with Gear's initial hurdles and limited scope, Samsung at the very least has shown it can create something innovative without looking to Apple as a model. It has set the new bar to meet in wearables, and it's up to Apple to make the next move. Samsung sure won't be sitting still.

 

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