Round smartwatches arrive, but users still waiting for Apple to join fray

LG to unveil round-faced smartwatch at IFA, similar to shape of Moto 360; Apple expect to launch its debut device by year's end

LG's new video teaser showing off a round-faced smartwatch set to debut next week at the IFA show begs a central question: What do users want in a smartwatch?

Round is certainly what the LG G Watch R (as some have called it) provides. LG wouldn't discuss the video teaser other than to say it hasn't announced the device's name.

LG follows Motorola, whose nearly-round Moto 360 is expected to launch in Chicago on September 4. The 360 smartwatch runs on Android Wear

LG's "R Watch" is set to launch just two months after the company introduced its G Watch and Samsung launched the Gear Live. Both devices run Android Wear and both are nearly square in design.

The latest LG effort raises such questions as: Can a round face really matter more than the way a smartwatch functions? Is it really a matter of style over substance?

However one answers those questions, it's a safe bet that Apple is carefully watching. Apple plans to burst on the smartwatch scene soon, maybe later this year, with a product that trumps others on style and functionality, analysts say.

"Design is a critical ingredient to the success of smartwatches but design alone with not do it," said Carolina Milanesi, chief of research at Kantar Worldpanel.

Apple needs to join the smartwatch scene by year's end to take advantage of holiday period marketing hype "or else they miss a sales opportunity," Milanesi added via email. "And they have to enter the market because I think there would be value for them to have something that comes in to add to the smartphone segment that has somewhat lost its shine in the eyes of consumers. The iPhone is still big but I think Apple users are ready for more."

Motorola is expected to launch its round-faced Moto 360 smartwatch in Chicago on Sept. 4, about the time LG launches a round-faced model at the IFA trade show in Germany. Both will run Android Wear. (Motorola screenshot)

Milanesi argued that while smartwatch sales figures are tiny compared to smartphones, users of the new devices are early adopters and power users who help shape new markets. "Those are power users that Apple cannot hand over to Android Wear just because Apple does not have a watch," she said.

There's little question that the early releases of Samsung and Android Wear watches haven't yet made a big impact. Earlier this year, before the Android Wear devices shipped, Kantar found that just 1% of 11,290 UK residents owned a smartwatch, with Samsung holding the largest percentage by far, at 32%. Of that entire group, laptops were owned by 81%.

Another research firm, Canalys, last week said that smartwatch (which it calls smart wearable bands) shipments grew dramatically in the first half of 2014 compared to the year earlier period, with about 1.8 million shipments. Canalys said that the LG G Watch, Moto 360 and others coming soon have off-the-shelf smartphone components inside, helping them get to market sooner.

Apple, on the other hand, will make extensive use of custom components in its smartwatch, Canalys predicted. "New products will be launched at IFA, but most technology companies are waiting to see what Apple will do first," Canalys said in a statement. "The market will see dramatic changes in the coming months."

Rob Enderle, an analyst at Enderle Group, also expects Apple to launch a smartwatch in the fourth quarter.

"We need one of the companies to set the market," he said. "Right now, folks don't know what they want in a smartwatch, at least not broadly. Apple traditionally sets the market and defines what a good product should have, which then allows others to compete for the greatest value product that supplies the features and design set."

Round watch-like designs like the Moto 360 seem to be pulling the greatest interest today, Enderle said, even though designs are "all over the map."

Meanwhile, features and functions are also all over the map, he said, while exercise and health apps and embedded pulse meters appear to be the biggest drivers of sales. "The problem is that health isn't as broad a category as communications or entertainment, which is core to [previous] successful Apple offerings," Enderle added.

"If you wanted to build a smartwatch now, you'd go round, emulating a luxury watch look, and you'd focus on exercise/health," Enderle said. "But if one of the vendors, probably Apple, can set the class to a broader feature set, the potential demand increases dramatically."

Enderle's insights were similar to those from Jan Dawson, chief analyst at Jackdaw Research, who last week said the smartwatch market is thus far "underwhelming." Dawson said Apple could have the ability to reinvent the smartwatch category, but is not the only one who could.

One of the most pessimistic about the potential smartwatch market is Patrick Moorhead, an analyst at Moor Insights & Strategy. He believes Apple will release a smartwatch in the next 12 months. "They have seen the tepid response to all the other watches and Apple wants to get it perfect," he said.

One feature that needs to be improved and promoted in smartwatches is voice-activated controls, Moorhead said. "Early implementations perform quite poorly, yet the voice control feature is more important on a smartwatch than on a phone," he said.

He said that smartwatches in general need a "lot more design work" to make them more popular with the masses.

"We are many years away from smartwatches for the masses," Moorhead said in an email on Monday, recounting thoughts he blogged about in May.

In other words, it could be years, even for Apple to come up with new smartwatch designs and functions that can woo the public.

Read more about emerging technologies in Computerworld's Emerging Technologies Topic Center.

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