The Coming Wave of Smartwatches

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Will the smartwatch prove to be the next hot personal electronic device? Sony (NYSE: SNE), Google (NASDAQ: GOOG), Samsung (NASDAQOTH: SSNLF) and Apple (NASDAQ: AAPL) probably hope so.

Earlier in the week, Sony unveiled its SmartWatch 2 (set to go on sale in September). While both Apple and Google are rumored to have similar devices in the works. Samsung has said it’s been working on a smartwatch for a while, though no firm release date has been set.

Sony’s SmartWatch 2

Many readers are probably asking themselves, “SmartWatch 2? There was a SmartWatch 1?”

Yes, Sony released an Android-based smartwatch last year. Unfortunately for the Japanese electronics giant, the device failed to catch on. Although it provided all the functionality one would expect, users complained of numerous bugs.

PCMag liked the device, but concluded that it was largely a toy for geeks -- it wasn't good enough to appeal to a mainstream audience.

The SmartWatch 2 will go on sale in September. It’s larger, has a better display, longer battery life, and more easily pairs with any Android phone. Hopefully Sony’s second effort is better than its first.

Samsung’s next Galaxy device?

Samsung has said it’s working on its own smartwatch, although it hasn't given any technical details, nor has it said when consumers could expect to buy it.

Samsung’s watch might have a better chance at catching on than Sony’s. Given the widespread popularity of Samsung’s Galaxy phones, consumers might be more willing to purchase their smartphone companion from a company that leads the industry.

At any rate, it’s hard to speculate on the success of the device without seeing it. But investors should keep an eye on its compatibility. Sony’s watch will work with any Android phone -- would Samsung restrict its watch to only working with Galaxy devices?

If Samsung were to limit it to Galaxy devices, it would help to create a sense of consumer loyalty -- someone who sinks a couple hundred dollars into a watch is more likely to stick with Samsung’s phones, less their watch become useless.

Apple has hinted an iWatch is in the works

Apple has been rumored to be working on a watch for months now. And though the Cupertino tech giant has never confirmed it, management has hinted strongly that a watch is forthcoming.

At the D11 conference back in May, Apple’s CEO Tim Cook said he found the idea of wearable computing devices to be profoundly interesting. Moreover, he described such devices as a potential branch in the tree of iOS.

And that’s really the heart of the matter. Hedge fund manager David Einhorn, long an Apple bull, has argued for the stock on the basis of Apple’s ecosystem. That is to say, a consumer who buys one Apple device is likely to buy more.

Adding wearable computing devices to the iOS family would go a long way towards keeping Apple’s customers loyal. As with any Samsung Galaxy watch, a consumer who buys an iWatch is likely one who would stick with the iPhone -- year after year, model after model.

Google is said to be working on its own watch

The Wall Street Journal reported on Thursday that Google itself has a watch in the works, and suggested that it could be released this fall. Like Sony’s SmartWatch, the Google watch would likely interface with all Android devices -- and maybe even Google Glass.

If Google is planning to roll out its own watch, it lends credence to the idea that the search giant is seeking to take back control of Android. Rather than sit back and let its hardware partners like Sony and Samsung tackle the market, Google is out there working on its own device.

At this point, it remains highly speculative, but it does suggest that -- as had been rumored in the past -- a wedge might be forming between the Android maker and its hardware partners.

Will they sell?

Still, the most important question remains: will these watches actually sell? In addition to Sony’s first SmartWatch, other devices -- like the Pebble -- are already out there. And though they have their devotees, they haven’t seen mainstream adoption just yet.

The fact is, the wrist remains an important area for jewelry, and the expensive watch is one of the only widely accepted forms of male jewelry. At a recent industry group meeting, Swiss watchmakers laughed off the concept of the smartwatch as posing any real threat.

But if they do sell, they could become a crucial part of Android and iOS. Anyone invested in the tech space should keep an eye on their development.

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