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  • Smartwatch – A Tough Puzzle to Crack

    Discounting the initial electronic or digital watch wave in 1970s which saw its sudden death sooner than expected, the recent Apple Watch event was the third attempt to invade the big watch market; the first being in 1999 and the second in 2012-13 led by Pebble. Although it’s stated that Apple sold about 3.6 million Smartwatches so far, it has not been able to create that buzz as was expected in the beginning when the Apple Watch was launched. In my view, even most of the 3.6 million watches sold could be due to impulsive and conspicuous buying behavior of consumer because it was Apple’s new product! What’s still missing? What’s going wrong?

    Let me go back to the basic principles of marketing mix, the 4Ps – Product, Place, Price, and Promotion. In the case of Smartwatch, the very basic principle, the ‘Product’ itself has not been defined yet in its real sense. What does this product offer – time, phone, message, data, health monitoring, or a mix of these things but very little on its own? If it’s just time keeping and health monitoring the Smartwatch provides on its own, then who should buy it? Does that justify the price? Okay, price can be debatable. But is the ‘Place’ defined with enough clarity? Who should buy a Smartwatch, where and in what conditions? I will talk more about the ‘Place’ where I will draw more attention towards the next level of marketing strategy involving Segmentation, Targeting, and Positioning a little later. Before that let’s talk about the ‘Promotion’, Smartwatch is late; already its ‘time’ has been stolen by the Smartphone. Hence, Smartwatch has to find other independent and smart strategies to promote itself; not by still remaining under the shadow of the same stealer, the Smartphone. Moreover, a Smartphone cannot be viewed as a complementary product for an Smartwatch, like gas for car, or butter and cheese for bread.

    Apply the same 4P principles on Smartphone and you will find that it’s a very well defined product (more than an isolated product with multiple versatile functionalities). The other aspects of 4P fall in line very amicably with this product. Now apply these principles on a traditional mechanical watch. Again, you will find a very well defined product which runs forever without much intervention, shows you time at the drop of your hat, and defines your personal statement according to the watch you are wearing; it’s a perfect companion for those who wear watch. So, where did we go wrong in defining the Smartwatch?

    Okay, let’s come back to the marketing strategy. Which is the segment targeted for Smartwatch? If it’s not the watch wearers, then is it worth the effort and ROI? Why the baselworld gets worried when repeated thrust is made by tech companies on developing a market for Smartwatch? Smartwatch cannot win back Smartphone holders but it can try winning watch wearers. Of course, if you have a good, well defined Smartwatch product, then you can also attract non-wearers of watch to wear Smartwatch. So, clearly the implicit target is the traditional watch wearer. However, the strategy has not been formulated with that target in mind; the product has not been defined for that audience. What has happened is a half cooked story; a hurried jump into conclusion that a smart engineering with data, message, apps, and some phone functions, added with a fashion statement will attract the general consumer (watch wearer and non-wearer) from the crowd. The market segment and exact target has not been thought of and the product not defined according to that. That’s where is the problem; my personal opinion. I’m open to other views from the audience.

    Article: Intel is Selling Itself Short on Trigate!-smartwatch_mkt-jpg

    A non-wearer of watch is anyway used to take out her Smartphone from her pocket to check several things, several times a day. So she wouldn’t mind checking the Smartphone for time and some other things that a Smartwatch also provides. A percentage of fitness enthusiasts would definitely like Smartwatch, mainly for those pulse readings for heart rate and other body functions’ monitoring which the Smartwatch provides by remaining attached to their bodies. So that’s an exclusive function Smartwatch provides. Is that the reason Fitbit remains at the top in wearable market share? In marketing terms, the Fitbit does define a health monitoring product per se. However, Smartwatch vendors’ wish is not to cater to only health monitoring or fitness segment. Otherwise why would Apple bring Apple Watch Edition? Is it not for watch-wearer?

    Definitely, watch-wearer segment is the one which makes sense and should be the primary target for Smartwatch. Although the baselworld is worried, but they understand the watch-wearer psychology very well, and they also know that the kind of technology provided by Smartwatches wouldn’t be able to win the consumers addicted to exotic, fashionable, mechanical watches; so there is natural boasting by a few traditional and exotic watch vendors. Therefore, it’s important for the Smartwatch marketer to enter into the consumer psychology and embrace that. Once the watch-wearer segment is realized with an appropriate and smart product, it will be easier to bring non-wearers into the fold. So, what else, other than the fitness functions, a Smartwatch should provide? This should be carefully analyzed before jumping into the engineering and fashion aspects. I beg to differ from an article (link given at the end) on Smartwatch design at AnandTech website where the author says consumers as well as vendors are confused about Smartwatch. In my view, consumers are well aware, the vendors are confused. The vendors are not offering something valuable in their Smartwatches about which the consumers are not aware; the consumers are already getting those features elsewhere.

    Before defining the engineering aspects, the product itself must be defined according to the consumer preferences. In my last article (link given at the end), I already said about the class of engineering done by Apple in its Smartwatch. But that’s not enough. Here are some of the features; I think are must for a Smartwatch. However, this is not complete; many more things can be added.

    Battery Life – My reasonable estimate for a Smartwatch to work on a single charge should be at least 15 days if not a month. It may be difficult, but that’s the reality vendors have to face to make a traditional watch-wearer willingly accept a Smartwatch. It would be still better if some kind of auto recharging based on solar or piezoelectric principles can be added.

    Independence – The Smartwatch must have its own identity and shouldn’t need any other complementary device for it to work properly. A longer battery life is also related to independence in a subtle way.

    Always-on – While wearing the Smartwatch on one wrist, if I have to use the other hand to put it on, it defeats the purpose. Okay, smart engineering can help hear to put it on with a twist of wrist! Design an appropriate sensor.

    Form-Factor – The Smartwatch must be fitting well on the wrist and should be of reasonable weight. Samsung Gear S2 with round face of 1.2” is a good idea. More smart engineering has to be done to realize other aspects of a good form factor. Not sure if chips with 10nm or below process technology can help here, if you want to cram a lot of functionality in the Smartwatch.

    Material – If a Smartwatch is expected to cling to my wrist for most of the day, the casing and the band should be of good, safe, and durable material which I would feel comfortable with. The inner material will, of course, be dictated by the engineering.

    Smart use-model – The Smartphone shouldn’t need my other hand to operate it most of the times. May be a speech recognition based command interface with suitable screen resolution can help. Of course, all provisions for using the watch screen as a touch keyboard should be there for a person to use it that way when needed.

    Security – Of course, security is essential for any electronic device now a day from data perspective. In case of Smartwatch, if should have an in-built traceability for the device itself.

    Exclusive features – The Smartwatch should have some exclusive and unique features. We talked about fitness and health tracking. The health parameters such as heart rate must be measured accurately and the measurements must be consistent with normal usage of the device. Smart engineering is needed here to place right sensors, right analytics, and right measurements in all circumstances. The other features such as mobile payment by just waving your wrist, weather display, home key and car key systems in-built in the Smartwatch, and so on can prove worthy. There can be many more.

    Software – It’s an age of Apps in digital world. There should be identified watch specific apps for weather, sports, time-zones, GPS, flight information, calendar, and so on. We see AndroidWear, WatchOS, and Tizen operating systems on Smartwatches promoted by Google, Apple, and Samsung respectively. Two things here – the software needs to be versatile and there must be interoperability because a Smartwatch may need to connect with many devices.

    Fashion statement – Yes, it’s a great motivator factor. In traditional watch segment the essential factor of time keeping is insignificant compared to the overwhelming fashion statement possessed by a designer watch. But that should not be confused with in case of Smartwatch. The Smartwatch has to first establish its own identity by delivering the essentials. The Apple Watch seems to have done well in fashion statement, but I guess, it has to still deliver more on essentials.

    Effectively, a Smartwatch should stand apart on its own, irrespective of a Smartphone or a traditional watch, in all respects. Then only it can gain acceptability in the mass market. The companies like Pebble, Samsung, Fitbit, Apple, Garmin, and others have tried their best, but that’s not enough. They have to work towards making the Smartwatch appear like a superior piece in its own space compared to any other device in the electronic world. After Apple Watch it’s Samsung Gear S2; progressive, but let’s see where it goes!

    AnandTech article is HERE
    Also read: Apple Watch – A Great New Design, Needs More


    Pawan Kumar Fangaria
    Founder & President at www.fangarias.com