The Success Of The Smartwatch Relies Hugely On How Well They Connect With Facebook Users
So far the smartwatch market growth has been tepid (at best), but the market may reach $10 billion by 2018, according to a Citi Research report led by Oliver Chen.
Half of that market size is expected to come from tech trendsetters who don't wear watches, and the other $5 billion is going to come out of the traditional watch market.
People Haven't Really Been Into Smartwatches
Although Apple unveiled its Apple Watch in September 2014, smartwatches have been around for over 10 years.
They just never really caught on. And there are several reasons for that.
Citi Research
The most obvious one is price - smartwatches are expensive. Only 14% of US consumers are interested in paying more than $199 for a smartwatch, but most smartwatches cost in the mid $200s, according to the report. Plus, smartwatches tend to have poor user interfaces and poor battery lives.Another major complaint about smartwatches is that they aren't broadly compatible with most smartphones (even the Apple Watch is only going to work with iPhones).
Since people want to hook up their smartwatches to their smartphones, that means that consumers view their smartwatches as smartphone accessories rather than standalone tech pieces, according to Citi.
We're Addicted To Social Media
In order to understand how companies can capitalize on the fact that consumers see smartwatches as smartphone accessories, it's important to understand what exactly people are doing on their smartphones.
Increasingly we're using mobile web browsing. Specifically, we're web browsing on mobile apps. Citi's report notes that the addition of mobile apps in smartwatches will drive the smartwatch market growth.
comScore
Nowadays, the majority of smartphone users are obsessed with checking social media every day.
Digital browsing by mobile apps is growing at an incredible rate. From June 2013 to June 2014, mobile app browsing went up by a whopping 52%.
As a comparison, mobile web browsing only increased by 17%, and desktop browsing just barely increased by 1% in the last year.
However, it's not just that mobile app browsing is growing. It's also important to note that app browsing is significantly more popular on smartphones than on tablets.
comScore
57% of smartphone owners used their smartphone applications every single day of the month. Meanwhile, only 26% of tablet users used their tablet applications on a daily basis.
The Citi report notes that people prefer smartphones over tablets for daily use because smartphones are way smaller and portable, and analysts "expect that Smartwatches could have a similar or higher application usage rate." In other words, the addition of mobile apps will make the (smart and portable) smartwatches more appealing to consumers.
And it's also important to note what kind of apps people are checking out. 25% of the time spent on mobile apps is attributed to social networking.
The most visited mobile app (by US users over the age of 18) was Facebook. And 36% of the top 25 most popular mobile apps were social media.
And that's not even counting smartphone owners under the age of 18, who are arguably much more likely to use social media and messaging than adults.
You can already see the Apple Watch moving in this direction - you'll be able to access Facebook and Twitter straight on the app.
But the Apple Watch is not going to replace your smartphone. That's not the point.