Watch the Watch
Apple (AAPL) is certainly the leader in the smartwatch segment, with a share over 50% in the last few quarters, and while Samsung’s (005930.KS) share is around 15% the do hold the number two slot after Apple, and their next iteration of their smartwatch has just been certified by the FCC, hinting that its release is relatively soon. While no official date for the release of the Galaxy Watch 4 or the Galaxy Watch 4 Active has not been set, expectations are that at least one or both will be announced in August, given that the original Galaxy watch was released in August (2018), as was the Galaxy Watch 3 (there was no Galaxy Watch 2), and the Galaxy Watch Active 2.
That said, there are expectations that this Galaxy Watch will be different than previous versions in that Samsung will offer a combination of its own Tizen OS, along with Google’s (GOOG) Wear OS for the first time. While Samsung has been promoting its Tizen OS for years, it does not have the following in the application developer community that Google does, and when it comes to wearables, the applications available to the user are second only to the look of the device. If Samsung does offer this OS combination, it would represent an acknowledgement that Google’s application development universe is 2nd to none and it plays a key role in selling wearables. From the user’s standpoint, an updated Samsung One UI interface will make the OS look almost identical to what users have seen before, but now including Wear OS apps.
There is some indication that these expectations are not just idle speculation, as Google has mentioned that it has modified Wear OS ‘with Samsung’s help’, which is unusual in that any modifications to the OS are usually made by the company releasing the wearable, but in this case, in order to gain the Samsung watch user base, it seems Google has made modifications for Samsung, giving it a better chance of competing against Apple’s Watch OS. Apple does not let Android smartphone users pair with an Apple Watch, but iPhone users are able to use a Wear OS smartwatch, so you can keep your iPhone but migrate to a non-Apple smartwatch. In the past, Wear OS and Tizen OS applications that worked with the iPhone were very limited, and we expect the improvements made to the Wear OS will open up many of its applications to iPhone users, giving Samsung a more attractive entry point to Apple’s smartphone user base.
There are some points that go beyond the potential for Samsung’s adoption of Wear OS on the Galaxy Watch 4, such as a glucometer that would measure blood sugar levels or a faster chipset, potentially produced using a 5nm process (previous version was 10nm), and the return of battery supplier CATL (300750.CH), who was the supplier of the battery in the ill-fated Samsung Galaxy Note 7 that caused the phones to catch fire and caused a global recall, and while a glucometer and a faster chipset might be selling points, we expect adding Wear OS, should that be the case, would have a greater impact on sales over time.
That said, there are expectations that this Galaxy Watch will be different than previous versions in that Samsung will offer a combination of its own Tizen OS, along with Google’s (GOOG) Wear OS for the first time. While Samsung has been promoting its Tizen OS for years, it does not have the following in the application developer community that Google does, and when it comes to wearables, the applications available to the user are second only to the look of the device. If Samsung does offer this OS combination, it would represent an acknowledgement that Google’s application development universe is 2nd to none and it plays a key role in selling wearables. From the user’s standpoint, an updated Samsung One UI interface will make the OS look almost identical to what users have seen before, but now including Wear OS apps.
There is some indication that these expectations are not just idle speculation, as Google has mentioned that it has modified Wear OS ‘with Samsung’s help’, which is unusual in that any modifications to the OS are usually made by the company releasing the wearable, but in this case, in order to gain the Samsung watch user base, it seems Google has made modifications for Samsung, giving it a better chance of competing against Apple’s Watch OS. Apple does not let Android smartphone users pair with an Apple Watch, but iPhone users are able to use a Wear OS smartwatch, so you can keep your iPhone but migrate to a non-Apple smartwatch. In the past, Wear OS and Tizen OS applications that worked with the iPhone were very limited, and we expect the improvements made to the Wear OS will open up many of its applications to iPhone users, giving Samsung a more attractive entry point to Apple’s smartphone user base.
There are some points that go beyond the potential for Samsung’s adoption of Wear OS on the Galaxy Watch 4, such as a glucometer that would measure blood sugar levels or a faster chipset, potentially produced using a 5nm process (previous version was 10nm), and the return of battery supplier CATL (300750.CH), who was the supplier of the battery in the ill-fated Samsung Galaxy Note 7 that caused the phones to catch fire and caused a global recall, and while a glucometer and a faster chipset might be selling points, we expect adding Wear OS, should that be the case, would have a greater impact on sales over time.
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