Watch for it — US$30 smartwatches next year!

mi-bandSmartwatches are attracting lots of attention but the prices are keeping many at bay, at least for now. Come next year, the prices are expected to average US$30, as smartphone vendors and component suppliers look to tap this market. In fact, Xiaomi has already introduced the Mi Band at just US$13.

Gartner predicts that by 2016, smartwatches will comprise about 40 percent of consumer wristworn devices. Nine out of the top 10 smartphone vendors have entered the wearables market to date or are about to ship a first product, while a year ago only two vendors were in that space.

“Apple has finally unveiled its Apple Watch, which we expect to trigger more consumer interest once it starts shipping in 2015,” said Angela McIntyre, Research Director of Gartner.

“The Sony Smartwatch products and the Samsung Gear were early products that received much attention in the press but less enthusiasm from consumers due to their unclear value proposition and flawed design. In 2014, we are seeing a few more positive developments in terms of design and user experience and we therefore expect consumers to show more interest in these products in the second half of the year,” said Annette Zimmermann, Research Director of Gartner.

She said that the latest smartwatches show much improvement in design compared with earlier smartwatches as well as providing an idea of the features that Android Wear brings to the user, including voice search, turn-by-turn navigation, contextual reminders and taking notes via voice input — basically a Google Now experience on a smaller screen.

In addition to the established vendors, original design manufacturers and semiconductor vendors in China are ready to take on the next generation of consumer. There are a growing number of local Chinese vendors that have launched fitness wrist bands, putting pressure on established players such as Fitbit and Jawbone. Although these vendors currently have a primarily local market focus, they will eventually turn to international expansion.

“Products and offerings among Chinese vendors are similar to those of other vendors with a variety of form factors, operating systems, connectivity and sensor options,” said McIntyre.

“International expansion will start to accelerate in 2015 and in this context, we expect several Chinese vendors to build on Android Wear in parallel to create more appeal. Certainly, they are faced with the same hurdles regarding design as all international vendors, but we also expect them to leverage one thing that has been to their constant advantage in the smartphone and tablet market: the cost advantage of the Chinese supply chain ecosystem. Chinese vendors might well be able to bring Android Wear based smartwatches to very affordable price points around US$30 with decent designs and sensors — driving mass market adoption,” she added.

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