Despite Samsung’s smartwatch boasts, leading analyst tips sluggish Christmas sales

Smartwatch sales are likely to remain weak until 2017, according to analysts at Gartner, despite Samsung’s claims it has shipped 800,000 of its Galaxy Gear smartwatches.

Earlier this week, Samsung Mobile chief executive JK Shin claimed strong interest in the Galaxy Gear during the two months since its introduction in an interview with the Korea Times.

“We have shipped over 800,000 Gears, globally. But it’s too early to say whether or not the sales figure will exceed the 1 million mark this year,” Shin said.

However, that figure covered the number of watches shipped to retail stores, giving no indication of how many were actually sold to consumers.

Worse, in late October, Geek published a leaked memo allegedly showing the return rate on Galaxy Gear smartwatches at one major US retailer, Best Buy, was as high as 30%.

Despite Samsung’s claims, Gartner principal research analyst Annette Zimmermann is bearish about the product category’s prospects over the coming years.

“Samsung and other well-known vendors have recently entered the smart watch space, yet the products we have seen so far have been rather uninspiring in terms of design, available apps and features,” Zimmermann said.

“As a result, Gartner predicts that wearable devices will remain a companion to mobile phones at least through 2017, with less than 1% of premium phone users opting to replace their phone with a combination of a wearable device and a tablet.”

“The convenience aspect of using a watch for interaction while leaving the larger-screen phone or tablet in the bag or pocket is something that users can relate to and probably recognise its value,” Zimmermann said.

“However, there are still several significant barriers to mainstream adoption, including low interest and awareness among consumers, poor design and price.”

The prediction from Gartner is at odds with a Canalys report from July, which predicted the worldwide market for smartwatches will hit five million units in 2014.

Canalys’ prediction marked a ten-fold growth rate over the 330,000 devices shipped in 2012 and the estimated 500,000 devices expected to be shipped this year, with the entry of major electronics firms into the market expected to be the catalyst for the boost.

“Smartwatches will be the most important new product category in consumer electronics since the iPad defined the market for tablets,” said Canalys vice president and principal analyst Chris Jones.

Aside from Samsung, a number of device manufacturers are believed to be interested in producing smartwatches, including Google, Microsoft, LG and Apple.


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