Apple is serious about creating an iWatch product stack to claim a slice of the smartwatch product segment. Smartwatch may appear like a niche segment, but when Citigroup researcher Oliver Chen ran through some numbers, the results were mind-boggling. Although the watch market has slowed since 2011, when it grew 20 percent, going on to grow 10 percent in 2012, and an estimated 7 to 9 percent in 2013, it is still a highly profitable apparel. "If smart watches can achieve ~10 per cent of this share this would yield a global addressable market of $6 billion," Chen commented. A $6 billion market sure looks like something Apple would want to get its hands on.
In a newer report, Bloomberg reported that Apple could launch its iWatch product line within 2013. The device might run the company's iOS mobile operating system, which could allow Apple to control what content could reach the device. It stated "Apple could adapt its iOS mobile software to limit what information is sent to a wrist device."
Citigroup's Chen goes on to note "We expect new smartwatch functionality to be the most significant driver and a device's success or failure most likely depends on synergies with existing devices," adding "E-devices have been important holiday purchases for teens, which is a positive given pre-existing loyalty."
Unlike conventional watches, which draw extremely low power, and can be powered by light or kinetic energy, smartwatches are self-contained embedded computing devices, much like smartphones, and hence draw large amounts of power, in comparison. Chen noted that smartwatches will need to have automated battery charging to simplify the experience. Wireless charging could play a big role in the smartwatch segment, and Apple could regret not jumping onto the Qi bandwagon sooner.
Recent activity at Cupertino surrounding smartwatches resurfaced in February, when it was reported that Apple was experimenting with curved glass for new wrist-worn devices.