Is Samsung’s (NASDAQ:SSNLF) Smart Watch at A Risk?


Samsung (NASDAQ:SSNLF) introduced 6 versions of its smart watches in the market in the past year alone. These versions not only differed in shape, size and features but they also came with different price tags. Perhaps this was the reason why these watched gained much popularity. According to a report by Canalys, a market research company, Samsung’s (NASDAQ:SSNLF) smart watches were responsible for around 80 percent of the total shipments that the company made in the first half of the year 2014.

However, the market of smart watches remains insignificant when compared with the laptops, tablets and other gadgets’ market. According to the reports of Canalys, only 2 million watches came into the market during the first half of the year. The ON World, on the other hand, believes that the market size of smart watches can go up from 4 million to 330 million by the end of the year 2018.

Some market experts are of the opinion that it will be Apple (NASDAQ:AAPL) who will bring about significant changes in the market of smartwatches. Some experts even go as far as saying that the company will be bringing smart watches into the mainstream device market from a comparatively niche one.  Estimates are that Apple (NASDAQ:AAPL) will make smart watch shipments ranging from 10 million to 60 million.

But having said that, Apple’s smart watches, in no way, will be putting Galaxy Gear at a disadvantage, for both the devices are not the direct competitors. And here are the reasons why:

Apple’s (NASDAQ:AAPL) smartwatches start at the minimum price of $349. These watches cost more if the customers want fancy bands with them. Samsung’s (NASDAQ:SSNLF) Galaxy Gear, on the other hand, start at a price of $100 for Gear Fit and $300 for Gear 2. Hence, both the watches have different demographics. According to the report of ON World, around 8 percent of the online customers are willing to buy smartwatches that cost more than $299. It is due to this very reason that both the products are not the direct rivals of each other, despite having similar features.

Where Apple is trying to promote its iWatch as a brand and fashion accessory, Samsung (NASDAQ:SSNLF) is more focused on providing low cost smart watches to a wide variety of customers. Apple will not be facing a lot of competition. Samsung, on the other hand, will face competition from many companies that have their smart watches in the range of under $300. These companies include, Motorola, Microsoft, Asus and Fitbit.

Although it seems like Apple is taking a great risk by introducing so costly iWatches, but then again, the users of iPhone tend to be more affluent than the owners of Android phones. And since iWatch will be synchronized with iPhones, chances are that the users of iPhones will be willing to pay a premium price. Both the smart watches are exclusive to their phone counterparts. The Galaxy Gear can only be used with Galaxy handsets.