Timely entry for brands key as smartwatches gain ground

The 2014 International Consumer Electronics Show has a new exhibit called WristRevolution in response to the building buzz around smartwatch technology.

The 2014 International Consumer Electronics Show in Las Vegas has a new exhibit called WristRevolution in response to the building buzz around smartwatch technology.

Tara Dunion, senior director of event communications at the Consumer Electronics Association, says that WristRevolution will have at least 10 exhibitors, among them Qualcomm, which debuted Toq in the fall; Tom Tom, which has a line of GPS sport watches; and AT&T's FiLIP smartwatch that serves as a locator for kids.

The category has become more crowded. Early last year, only smartwatches from smaller players I'm Watch and Pebble - the latter born out of a Kickstarter funding campaign - were available. Late last year they were joined by offerings from heavyweights including Sony's Smart Watch 2 and Samsung's Galaxy Gear smartwatch.

"We definitely see a growing trend for smartwatch products, and according to several research institutes, the future looks good," explains Sofia Wenemyr, global communications manager for Sony Mobile Smart Accessories. "Our strategy is to continue developing products within the wearable segment."

Specialized offerings
Electronics manufacturers are clearly bullish about its future, but are they working with brands to create new services specifically for a digital screen that is hands-free and continuously in view to the user? And are brands taking a wait-and-see approach - letting manufacturers perfect the technology before coming on board in a significant way?  

A number of smartwatch makers declined to comment, citing competitive concerns.

Dan La Russo, EVP of the tech group at Ogilvy Public Relations, says the firm has clients dabbling in the arena. Aside from low consumer adoption, he says part of the hesitation by many brands has to do with the fact that most smartwatches need to be Bluetooth connected with smartphones.

In other words, smartwatches cannot operate independently from a smartphone.

Still, he says there are some small tech companies that are showing how a smartphone outreach strategy can be extended into smartwatches.

He uses RunKeeper as an example, the iPhone app that enables people to track their outdoor fitness progress. The Boston-based company has worked directly with Samsung and Pebble on apps for their smartwatches that allow a user to display their time, pace, and distance - without having to pull out a phone.

"It presents itself very differently on Pebble than it does on my phone," says La Russo. "That is where the sweet spot begins for these devices. When it gives people something new they cannot do with their phones."

X Factors

According to Juniper Research, global shipments of app-enabled smartwatches reached 1 million in 2013. Research firms predict shipments could be about 30 million in 2016.

Two X factors could spur the market along. Apple has trademarked the iWatch name in numerous countries and is expected to introduce its own smartwatch.

"It will educate and publicize this device segment to the consumer and act as a catalyst to the market," says Juniper analyst Nitin Bhas.

Also, partnerships be-tween tech companies and brands such as Rolex and Burberry could lead to a new generation of smartwatches, more fashionable than what is currently available.

Fitness market
Joe Paluska, chairman of Edelman's global tech practice, believes that fitness brands should be looking at smartwatches.

"Fitness is the most natural application for it. Americans tend to want to measure everything and compare themselves against friends."

"Still, everyone is trying to figure it out," he adds. "It is very much an early category, but like any piece of real estate, ultimately there will be a move by brands to own it."

Esty Pujadas, global development officer and director of the global tech practice for Ketchum, says, "in terms of our clients, we believe the wearable tech market is being watched closely by most companies."

In addition to health and fitness, she sees a market for family focused brands, which could offer or sponsor a child- and elder-monitoring service.

Location-based text messages could be big, a strategy that many marketers have already built their smartphone plans around.

"It has a lot of potential for retail in particular," says Pujadas.

She advises any company that PR and communications strategies include a strong education component, adding that consumers will be concerned about data privacy and "always being on" with smartwatches.

"There is a great opportunity for some thought leadership of the wearable device market," Pujadas says. "Brands who get involved can educate the market and help consumers adopt these devices responsibly."

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