Hong Kong expected to lead the way as smartwatch sales predicted to soar

Hong Kong expected to lead the way on latest gadget, with global sales predicted to hit US$50b

PUBLISHED : Sunday, 20 July, 2014, 6:06am
UPDATED : Sunday, 20 July, 2014, 11:29am

The smartwatch has been a staple of science-fiction since Dick Tracy and his "wrist radio" made their comic debut in the 1940s. But now the technology is a reality, and smartwatches are catching on in the mainstream consumer market, with the likes of Apple expected to get involved alongside Google.

Wearable technology is emerging as the next frontier for consumers, with research firm ON World predicting that the global market will hit US$50 billion by 2018.

But the rise of the smartwatch doesn't delight everyone: some fear another gadget is not what modern society needs.

In Hong Kong, where tech-savvy shoppers have long been early adopters of the latest gadgets, smartwatch sales are expected to soar.

Market research firm Counterpoint Technology predicts that smartwatch sales in Hong Kong will rise from 165,000 last year to 1.4 million next year.

"Our estimates are based on the assumption that players such as Apple, Microsoft, Xiaomi, Samsung, Motorola, and LG jump in with compelling offerings and at an attractive price," said Neil Shah, Counterpoint's research director.

The latest models, from Samsung, LG and Motorola, run on Google's Android Wear operating system. Users can check unread smartphone notifications or e-mail, carry out Google searches and even take photos.

Watch: SCMP's TechSmack with Kai Man Wong: Samsung Gear 2

Bryan Ma, Asia-Pacific vice-president of research firm IDC's client devices research group, also expects strong growth in smartwatch sales in Hong Kong. He also expects a high proportion of buyers to link their devices to their smartphones, a measure known as the "attach rate".

"We should see strong attach rates in Hong Kong [compared to] other countries around the region because Hong Kong tends to be an early adopter market."

Given the brand's enduring popularity in the city, the adoption rate may well depend on when Apple launches its long-expected "iWatch".

"The Hong Kong market is subject to heavy swings from Apple," Ma said. "Apple could theoretically change the game significantly depending on how their product is positioned and used. Ecosystems and apps will be key." Shah expects the iWatch to cost less than US$300 and launch later this year.

He said Chinese technology firm Xiaomi might also launch a smartwatch retailing at about US$150 in the fourth quarter of this year.

"It could lead to an uptick in the high-tier as well as mid-tier smartwatch segments and the sales could be on track to cross the million-units mark next year fairly easily," Shah said.

Factors limiting the success of the watches - such as poor battery life and excessive bulk - will be worked out over time. But there is concern that having yet another gadget will get in the way of normal human interaction.

Professor John Bacon-Shone, director of the Social Sciences Research Centre at the University of Hong Kong, says gadgets can encourage interaction with their messaging and communication tools. But they can also have the opposite effect.

"A senior police sergeant told me an interesting story: traditionally, he would take the fresh recruits out for a meal so he could tell them stories from his experience, which they were interested in. Now, when he takes the recruits out, they are communicating the whole time using their phones, not listening to him," he said.

"He saw the story as very negative, but it appears the recruits were communicating with their friends who were not present, so it can be seen as facilitating social communication of your choice."