Tracking the Rise of Connected Smartwatches

Device makers dial up heat on cellular connectivity

Smartwatches stand out as one of the tech categories that have successfully weathered the Covid-19 storm so far. Whereas sales of other devices, like smartphones, have suffered from a lack of consumer confidence, wearables have been in high demand. Health- and fitness-tracking features have been drawing a lot of interest, especially at a time when many people are able to take advantage of their lack of daily commute or other commitments to get out and exercise.

In addition to this good news, there are signs that connected smartwatches are catching on. This is a segment of the market where I expect sales to grow further in the coming years, with new devices aimed at kids and senior users set to be a main source of growth. Connected watches that support voice calls, chat and features like location sharing allow wearers to easily keep in touch with parents or carers, providing increased safety and security for users and peace of mind for their loved ones. During the pandemic, having a way to reliably check on the health of older relatives is especially valuable. Recent developments like Family Setup for the Apple Watch show just how hot this area has become.

Momentum is building for these devices. Adoption has been impressive in Asia, especially China, and other regions, like North America and Europe, are looking to replicate this success. In the US, most carriers offer kids’ smartwatches — Verizon’s GizmoWatch and T-Mobile’s Family Connect watch from Timex are examples — and new products are on the way. The biggest player in kids’ watches in China, imoo, has launched in Europe and is rolling out in the US, pairing with several carriers. Disney has agreed deals with Vodafone and Verizon to release new kids’ smartwatches in time for Christmas, uniting mobile connectivity with some of Disney’s most-loved franchises. It’s not hard to imagine Star Wars or Frozen editions of flagship watches going viral and topping lots of hopeful lists sent to Santa this year.

When it comes to other audiences, the capabilities of connected devices also appear more attractive than ever, especially for the wave of recent smartwatch buyers keen to track their health. One area where connected watches come into their own is in the ability to head outdoors to exercise without the need to carry a smartphone. They offer a powerful, convenient way for people to check a map or pay for food or drink from their wrist. What’s more, wearers of connected devices can keep friends and family informed about their location, enhancing their safety and security.

For all these reasons, we’re seeing more players targeting the connected watch market, taking on established names like Apple and Samsung. The Oppo Watch, which launched earlier in 2020, has a 4G LTE variant, and Fossil has confirmed that it’s adding connected watches to its portfolio, identifying this as a feature that will spur growth for its smartwatches. It would be no surprise to see other devices which run Google’s Wear OS follow a similar path. Disruptive brands in the smartphone market, such as Xiaomi, Vivo and Realme, will also be alive to the opportunity.

There are strong signs of support for this trend from the mobile industry. Wearable device makers will continue to push innovation and to offer the best experience to customers, so we’ll see more improvement throughout the connected wearables space. These companies are also working closely with operators, as a valuable route to market. As networks continue to generate more meaningful revenue from smartwatches, they will want to expand their offerings. And with new watches launching, which will complement existing line-ups of connected devices, operators’ shelves will soon be flush with choice.

This progress is aided by powerful technical improvements, such as the progression of e-SIM, which allows for watches to have a sleeker and more-compact design. Furthermore, dedicated chipsets for wearables, like Qualcomm’s Snapdragon Wear range, are pushing the boundaries of what’s possible for smartwatches, enabling more features than ever before in a power-efficient way. For example, the company’s latest Snapdragon Wear 4100+ platform uses a hybrid architecture, combining a system-on-chip with a low-power co-processor, delivering significant performance gains. It also brings Qualcomm’s rich heritage of connectivity on board.

Of course, there are still some barriers to clear. Our survey of smartwatch owners found that those choosing a connected watch don’t tend to pick it specifically because of its freedom to work without a smartphone (when really, this should be the main reason for their decision). A lack of understanding of what connected devices can be used for is a clear deterrent to adoption. Instead, it’s attractively priced contracts that influence customers. And when it comes to kids’ smartwatches, our research found concerns from parents about pricing, as well as worries about children losing or damaging devices.

But these challenges aren’t impossible to overcome, and our research highlighted positive signs, including the fact that owners of connected watches get the highest levels of use from their devices and are the most satisfied with them. The survey also revealed that the main reasons to buy a kids’ smartwatch, like keeping in contact with a child and tracking their location, resonated well with consumers, especially those who already own smartwatches themselves.

As the smartwatch market continues to grow handsomely, more people will want a slice of the pie. Connected smartwatches deliver new uses, open up new segments, and allow more companies to generate revenues. For that reason, I expect a range of players to really focus on this segment in the coming years.

Wearable tech leaders including Apple, Samsung, Fitbit, Garmin and Huawei will be looking to gain market share and build exciting new products. And with new names like Xiaomi and Oppo in the mix, along with famous brands including Disney, customers will have a better selection to choose from.

The wearables space in the coming years will be hotter than ever, as operators increasingly focus on connected devices and leading silicon players such as Qualcomm bring advances. The world of connected timepieces is one to watch.