By Paul Taylor in New York, Tim Bradshaw in San Francisco and Song Jung-a in Seoul
Samsung Electronics has become the first global mobile computing company to launch a smartwatch, leaping ahead of rivals Apple, Google and Microsoft in the ”wearable technology” market.
The South Korean company’s Galaxy Gear smartwatch works as a “companion” to a Samsung smartphone, allowing users to check emails, receive texts, listen to music and take pictures. The smartwatch, launched simultaneously yesterday in Berlin and New York, will go on sale in 149 countries this month priced at $299.
As Apple’s main rival in the smartphone market, Samsung is hoping that by being the first to launch a product in the wearable technology area it can overcome its reputation as a fast follower. Apple is preparing to launch its iWatch next year and Google is experimenting with limited production of its Glass headset.
The South Korean company is optimistic that the Galaxy Gear will be a new growth driver amid increasing concerns that the high-end smartphone market is nearing saturation in the US and Europe. Analysts in Seoul said the Galaxy Gear was unlikely to make a significant contribution to Samsung’s profits but a successful launch would boost its brand.
“It’s good to showcase something that will boost the perception of Samsung’s capabilities but there’s not much that they can expect commercially from this product,” said Marcello Ahn, a fund manager at Quad Investment Management.
Analysts remain unsure of consumer demand for smartwatches but they say smartphone manufacturers including Apple and Google need to come up with new wearable devices to make up for falling margins in the smartphone market.
They point to lacklustre demand for earlier devices including Microsoft’s Spot, launched 10 years ago, the Wimm One that went on sale in 2011 and more recent devices including Sony’s SmartWatch and Motorola’s MotoActv, which targets the health and fitness market.
While just 330,000 smartwatches were shipped last year, according to Canalys, the research firm predicts the market “is set to explode” by the end of 2014, growing tenfold as a new generation of devices from Apple, Google, Microsoft, Samsung and others are launched.
Shin Jong-kyun, president of Samsung’s mobile division, said he believed the Galaxy Gear would help launch a new category of wearable devices. “The most important thing is to convince consumers that this is a necessary product with a lot of useful functions,” he said. “It will bring a lot of changes to our life by providing real smart freedom.”
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