Samsung also working on smart watch

  • Apple developing an iWatch

Samsung is developing a wristwatch as it races against Apple to create a new industry of smart wearable devices.

"We've been preparing the watch product for so long," said Lee Young Hee, executive vice president of Samsung's mobile business. "We are working very hard to get ready for it. We are preparing products for the future, and the watch is definitely one of them."

Lee had no comment on what features the watch may have, how much it would cost and when it would go on sale. Asia's biggest technology company already plans to release three high-end smartphones this year – including the Galaxy S4 unveiled last week and one using the Tizen operating system – as it competes with Apple for customers in a slowing global market.

Samsung's disclosure comes after people familiar with Apple's plans said last month the US company has about 100 product designers working on a wristwatch-like device that may perform similar functions to the iPhone and iPad. The global watch industry will generate more than $US60 billion in sales this year, said Citigroup analyst Oliver Chen. The first companies to sell devices that multitask could lock customers into their platform, boosting sales of phones, tablets and televisions.

"The race is on to redesign the mobile phone into something that you wear," said Marshal Cohen, an analyst at NPD Group. "We're going to see formidable competition coming from many different directions – from device makers, accessory makers, even fashion designers."

Smartphone saturation

Samsung and Apple are looking for new product lines as the $US358 billion global market for handsets approaches saturation. Growth is projected to slow to 9.8 per cent in 2017 from 27 per cent this year, according to data compiled by Bloomberg. Apple's sales growth last quarter was the slowest in more than two years, and Samsung in January warned of slowing demand.

"The issue here is who will first commercialise it so consumers can use it meaningfully," Lee said.


Samsung became the world's largest smartphone maker last year, overtaking Apple. Samsung had 29 per cent of global smartphone unit shipments in the fourth quarter, compared with 21 per cent for Apple, according to data compiled by Bloomberg.

Price advantage

Apple seeks to introduce its wristwatch device as soon as this year, said one of the people familiar with the matter, who asked not to be identified because the plans aren't public.

The features under consideration by the Cupertino, California-based company include letting users make calls, see the identity of incoming callers and check map coordinates, one of the sources said. It would also house a pedometer for counting steps and sensors for monitoring health-related data, such as heart rates, the source said.

Samsung may be able to undercut Apple on price because the Korean company makes its own displays and chips, said Will Stofega, program director at International Data. Samsung is also the world's largest maker of TVs and memory chips.

Pricing wristwatch-like devices under $US200 will be one of the keys for developers, said Laurence Balter, chief investment strategist at Oracle Investment Research. He estimated one-quarter of existing users of Samsung smartphones and tablets would be interested in using a watch-like device.

"This is a new category that Apple is trailblazing that will see competition from Samsung," he said. "If I were Apple, I'd strategically price the watch as low as possible to bring as many as possible into the ecosystem. Samsung is going to be there for many years to come and try to cut them off."