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The Apple Watch and other wearables face 3 big hurdles

Matt Hamblen | June 5, 2015
Really scary' data privacy worries should concern all users.

"Buyers get the value of the fitness band [like Fitbit], but with the smartwatch, there's still a lot of questions," Llamas said. "So there's pressure on the smartwatch to prove its value. That includes: What can I do on my smartwatch that I can't do on my smartphone?"

Clearly, there's a drive by manufacturers to make smartwatches work more independently of Bluetooth- or Wi-Fi-connected smartphones, but the rollout of those functions has been slow.

With the launch of the Apple Watch, some observers predicted a fire sale of other wearables; Llamas predicted that probably won't occur.

"The Apple Watch is backed by a great company, but it's still more expensive than many wearables and I have to be an iPhone owner to user it," he said. "So that leaves out a big chunk of the market, which is filled with plenty of other devices. With its entry-level price above $300, that's outside the realm of most people."

Meanwhile, Samsung has been in the smartwatch market for two years, and hasn't had nearly the impact analysts expected. The same could be said for the seven different Android Wear smartwatches now available.

Neither Samsung nor Apple is likely to make their smartwatches work with smartphones other than their own, which could hold them back, Llamas said. Meanwhile, many fitness bands and other smart wristbands work across platforms, which works to help their adoption.

Llamas predicted the Fitbit will hold onto its niche with a strong devotion to fitness. "Fitbit won't become more like a smartwatch," he said. "Having something like Facebook on Fitbit is not really their thing. They want a really good device for health and fitness and to use for going outside."

Who wants mobile payments anyway?
Mobile payments won't likely drive the value of wearables, at least in the U.S., anytime soon.

Despite Apple's push for Apple Pay and the use of that mobile payment service with the Apple Watch, analysts are pessimistic about the popularity of mobile payments from smartwatches and smartphones.

That sentiment didn't stop Google from unveiling Android Pay at Google I/O last week; Android Pay will work with the upcoming Android M release for smartphones, but its future for Android Wear smartwatches and smartwatches that support NFC (Near Field Communication) payments remains unclear.

IDC analyst Will Stofega said in a podcast this week that IDC surveys have shown Americans "are not that interested" in mobile payment services and predicted it will be a long "slog" toward adoption.

His view matches those of other analysts that Americans are just as happy using credit cards -- and cash -- for in-store payments. U.S. merchants are slowly updating their in-store payment terminals to support more secure smart cards and NFC chips in the latest phones. Still, there's widespread acknowledgment in the industry that it will take five to 10 years to have payment terminals installed in 90% of the estimated 12 million U.S. retail locations.


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