Why Android Wear shipments aren’t surprising (or disappointing)

26 Comments

Credit: Kevin C. Tofel/Gigaom

Wow. There are quite a few people talking about yesterday’s Canalys estimate of 720,000 Android Wear shipments in the last six months of 2014. And most of that talk is ridiculous, with little to no perspective on the market itself. All of the doom and gloom I’m reading about Android Wear may yet come to pass, but to base it on shipment data at this point in time is premature for several reasons.

How about the timing?

First up, when did Android Wear watches start shipping? The platform and first devices were announced in early 2014 but only became available on June 25 when orders began for the LG G-Watch and Samsung Gear Live. So the last six months of Android Wear shipments were also the first six months of shipments. This is essentially a brand new market.

moto 360

And not even all of the Android Wear watches shipped for the full six months. Case in point: [company]Google[/company] showed off the Moto 360 at its June Google I/O event — the crowd went wild — but you couldn’t actually get one until September 4 when the round timepiece was launched. LG added a round watch of its own, the G-Watch R, in November, and Asus debuted its ZenWatch that same month. The point? Some Android Wear hardware partners only had two months or less of shipments in 2014.

Crazy comparisons

Here’s something I can’t understand at all: The comparisons between Android Wear shipments and recent [company]Apple[/company] iPhone sales. What do these two products have to do with each other? Hint: Nothing. But that didn’t stop the comparisons from happening. Here’s one from the Wall Street Journal, placed very high in the story:

By comparison, Apple sold roughly 114 million iPhones over the same period. That means Apple sold almost as many iPhones each day as makers of Android smartwaches shipped over the six months.

For starters, the comparison is looking at a standalone computing device in the iPhone compared to an accessory to a smartphone with Android Wear. If that wasn’t bad enough, it looks at data between the market for an eight-year old product and one that’s less than a year old. Yes, smartwatches have been around for longer than six months, but Android Wear as a product hasn’t. Frankly, it’s ludicrous to even mention the iPhone in the first place when having a conversation about Android Wear.

Tempering expectations

To be honest, we really didn’t need to wait for Canalys to give us an idea of how many Android Wear watches are out in the wild. All we had to do was look at Google Play. Why? Because Android Wear watches are companions to Android phones and those phones need the Android Wear app installed for the watches to get notifications, apps and data. A quick check of the Android Wear app in Google Play shows between 500,000 and 1 million installs, a range that certainly jives with Canalys’s data.

android wear installs

Less than one million Android Wear devices shipped (or sold, for that matter) shouldn’t be surprising, then. I think the surprise factor comes from those who haven’t seen the Android Wear app install numbers combined with expectations of Apple Watch sales. I’ve seen figures in the tens of millions for Apple’s product, which starts shipping in April. If you compare these Apple Watch sales expectations with 720,000 Android Wear devices, sure, there’s bound to be disappointment. But why don’t we wait and see the actual figures before proclaiming that nobody wants an Android Wear watch?

Android Wear v. Pebble

I also saw some Android Wear shipment comparisons to Pebble, and those make a little more sense but still need some context. Pebble shipped its one millionth watch by the end of 2014. One million is more than 720,000 so that’s better, right? Yes and no.

Pebble has been around a bit longer than Android Wear, having raised more than $10 million in a Kickstarter campaign that ended on May 18, 2012. The first watches started shipping in January 2013, so it took Pebble two full years to reach the million shipments; it sold 300,000 in the first year. And two aspects of the Pebble actually give it broader appeal compared to Android Wear.

pebble steel and galaxy gear

Android Wear is limited to working with Android devices, while the Pebble works with both Apple iOS and Google Android. Right off the bat, Pebble can attract buyers who use iPhones. The price of admission for Android Wear is also roughly double that of the Pebble. You can now buy a Pebble for $79, for example, while the least expensive Android Wear device is $199 and works its way up to $249.

It’s too soon for the gloom and doom

Put all of this together and what do you get? The premature death of Android Wear.

We’re talking about a limited market, since this is an accessory device that’s completely optional and may not appeal to every Android device owner. In that regard, the smartwatch market will never exceed that of smartphones, provided these remain companion devices.

Not only are Android Wear watches not needed or wanted by all Android phone owners, but they’re more expensive than similar products. The pricing doesn’t fall into the “impulse purchase” category, particularly when the watches replicated much, if not all, of the functionality found in the smartphone you already own. Heck, out of the 4.6 million smart wearable bands that Canalys says shipped last year, one million of them were Xiaomi Mi bands which you can nab for $20 or less but don’t have any smartphone notification support or apps.

mi-band

And Android Wear is still an infant. There haven’t been many software updates yet and the number of apps for the watches is still pretty limited. Google Now is super handy on the wrist and one of my favorite features, but again: It’s simply the same implementation from the Android phone moved to a watch. Android Wear still has room to grow as a platform; my Sony Smartwatch 3, for example, has integrated Wi-Fi but that radio hasn’t yet been enabled in Android Wear.

Google smartwatch platform isn’t perfect (by far) nor will it appeal to everyone. But let’s give Android Wear watches more time to grow up, gain features that consumers feel they must have on their wrist and come down in price before we decide it’s a loser.

26 Comments

Rolex tech guy

And another thing, Rolex sells 700,000-800,000 $10,000+ plus watches a year.

Android + Apple watches may end up creating a viable market for their product (7000,000/6 months is mot viable long term), but it won’t be because they replace Rolex

Mcbeese

The Android wear watches and their UI are butt-ugly. Even the Pebble is much better design. Design rework needed badly. Apple is going to have another blow-out success because the usual major competition in another category remains fragmented without enough focus on design. Give Google some time and we’ll see something worthy, but not so far.

quintonlawman

You seriously think what they’ve shown of the not-an-iWatch isn’t ugly? Someone has Apple-colored glasses on.

I think BOTH platforms need refinement, but I do think Android Wear has the clearer LOOKING UI. That being said, I’ll reserve judgement on the not-an-iWatch because I haven’t used one yet.

Mike

Almost bought a android wear watch. But the battery life is a day or less? That needs to be improved.

sean-8

Just got 16 hours out of my Moto 360 today and when I set it on the charger, it had 52% battery left. And it’s a launch day device, so it’s been getting cycled daily since September. Of course it was a quiet day, but goes to show there’s plenty there for a busier day.

BILL VAN

All excellent points for sure. I will say I pride myself as an early tech adopter but within reason. For an example in a few months I will have had an awesome 802.11 ac router for 3 years. But hey, do I want Android Wear too? Absolutely!! But unlike having awesome wireless internet speeds I’m ok waiting on Android Wear to mature a bit more and obviously I’m not alone. But hey, that’s ok. Because I know it’s only going to be a matter of time…..

pjs_boston

Is this article a joke? Less than 1 million total industry shipments six months into a major new product initiative is pathetic no matter how you slice it.

BILL VAN

OT – Hey Kevin fyi – One of the tech gurus Tom Merritt, Sarah Lane and Iyaz Akhtar gave you a shout out on Tom’s DTNS podcast today. Pretty cool!! But you already knew that by now right……..

pjs_boston

Given that Android Wear devices are priced to be an impulse buy in affluent countries, the Android user base numbers in the billions, and we just exited the Christmas quarter, I’d say industry wide sales of 10 million would have been a good start.

Worldwide sales of less than a million? That can only be interpreted as customers giving Android Wear a solid thumbs down.

quintonlawman

Where do you get that idea? The first year the iPhone launched, it sold less than 1 million units. Was that a failed product/launch?

I don’t understand your logic.

pjs_boston

When the iPhone launched, it was priced at $599 and was only available on from a single US phone carrier.

Android Wear devices are priced at $150-$250 and they are available worldwide to an established Android user base numbering in the billions.

A better analogy would be the iPad. If the iPad had sold less than 1 million units in its first six months would it have been considered a success?

sean-8

Except the iPad is also a standalone computing device, and I’d be curious to see where you get the idea that there are billions of Android users in affluent countries, can you name those countries? I think the comparison to Pebble is realistic, and a lot of users are waiting to see on Android Wear. So far all your arguments are really stretching for the answer you want to see in a market that’s still very young, and with products that are very fresh. I’m of the opinion that Wear devices are young, but already they are capable of some very solid tasks.

quintonlawman

For the record, I agree with the others that comparing a stand-alone computing device to Android Wear is unrealistic. I simply was doing it for the sake of a successful product launch in the tech sector.

Your “10 million” number is completely unrealistic, however. I’m not poor, and I own an Android tablet (Galaxy Tab Pro 10.1), and an Android phone (Nexus 6). My wife is similarly equipped (HTC One M8 and Nexus 7). We buy high-end devices.

However, $200 – $250 is NOT an impulse buy for the vast majority of the people out there, including myself. And spending that much money on something that will be outdated in less than a year is not something I want to do–especially considering the fact that my phone already does all of the things that a smart watch does.

720,000 is pretty dang good for 6 months worth of sales, considering the lack of maturity in the market. It’s good tech that’s sold relatively well. Give it some time, and the numbers will go up (that’s my prediction), even if it never becomes a mainstream market like smartphones. Smartwatches are more of a niche thing, if you ask me.

Kevin C. Tofel

Yup, totally understand why a look at the first year of iPhone sales entered the conversation. IIRC, Apple sold 1M phones in 74 days so it did better but as we’ve all (er, mostly all) agreed, computing device vs. companion device isn’t the best comparison.

It took Pebble a year to ship its first 300k watches. I don’t think the company is a failure at all. But based on this arbitrary “anything under 1M sold is a flop” meme, it would be. Pebble would be in its second year too since it sold 700k watches last year. ;)

The entire modern smartwatch category is really just getting started and I think some people are failing to see that. On the flipside, I’m sure Apple will ship and sell far more Apple Watches at first but from a personal purchase perspective, even after seeing the Apple Watch at the launch event I attended, Apple still hasn’t provided me with a compelling reason I need to spend $350 or more for one. That can change — they haven’t shown all of the details, features, apps, etc…. — but that’s how I currently feel.

quintonlawman

I agree–great post! The analysis I’ve seen over the past couple of days have been absolutely nuts, and I’ve been wondering where it all came from.

Makes me wonder if propagandists are paying people to report the premature death of Android Wear. I hate to be the guy putting forward the conspiracy theory, but come on–as you rightly pointed out, none of the comparisons I’m seeing (except for this one) seem to make any sense at all.

*shrug*

Like you, I’m not saying Android Wear is an instant success, I’m just saying that it’s way too soon to call it either way. I’d actually argue that the current numbers are promising.

As a Pebble owner, I’m not ready to make the switch yet, but I’d be lying if I said I wasn’t intrigued by Android Wear features.

Jason Howell

Great post. Android Wear is part a new category, with limited functionality, so comparing against the fully featured iPhone ABSOLUTELY makes little to no sense, as you say. Compare it to the iPod if you must compare it against any Apple device that jump started a new category of devices.

iPod sold 720,000 TOTAL devices during the first two years it existed (2001-2002). Only 20,000 more than the number Canalys touted for Android Wear devices, and in the case of Wear, it only took half a year to reach that number.

So I’d say Wear is doing just fine.

jjj

Just a few hours ago i’ve noticed in a EU market that the Pebble was more or less half the price of Android Wear.
How much is a tablet and on what planet should a watch cost more? And that’s before you factor in the poor everything else (form factor, inappropriate parts , design, functionality)..
Cut the price to 99$ and less and they’ll sell even if they are poor. That Apple watch should have been 119-129$ given what it is. At current prices might sell up to 5 million units per quarter, mostly in the US and maybe Japan but that’s not good and it’s competition will quickly land in the 50 to 100$ range where it actually makes sense to buy. It’s not even worth the effort with a must have feature given Apple’s limited numbers of products and wast opportunities elsewhere. Wireless charging in the iphone would earn them more revenue and higher margins at almost zero effort.

sean-8

Like you, I dont subscribe to the idea that watches are jewelry, but many people do, and in that case a US$500 watch is on the low end for many people. So $250 for a wrist wearable computer, well that’s pretty good if you compare it to history. Now my watch has more processing power than Neil and Buzz used to get to the moon, and it does more than a Rolex costing 20 times more.

Rolex tech guy

Speaking as a Rolex wearer, I bet my Rolex will be doing more than your Android thingy in 5 years, 10 years, 20 years (you get the idea).

OK

Sure, but I could buy a new Android Wear device every year for 50 years and still spend less than you on your Rolex.

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