Why Apple Inc. Should Be Scared of Android Wear

Google just proved it's out to dominate the burgeoning wearables market.

Mar 23, 2014 at 11:45AM

Moto
Moto 360 running Android Wear. Source: Motorola

Google (NASDAQ:GOOGL) may have gotten out of the smartphone hardware business last month went it sold Motorola to Lenovo, but this week the company jumped head first into wearables. Google's new Android Wear OS will do for smart watches and other wearable tech what its older Android brother did for smartphones just a few years ago. And that should make Apple (NASDAQ:AAPL) very nervous.

A revamped OS for a new market
To help developers and phone makers make the jump from smartphones to smart watches a little less intimidating, Google's Android Wear is designed with the small screen in mind, free from anything users don't need or can't use on a watch.

Here are a few key ways Google designed Android Wear specifically for wearables:

  • Only give useful information when you need it most
  • Gives straight answers to voice questions
  • Monitors health and fitness
  • Can be used to control other screens, like smartphones and casting to TVs

Take a look at Google's video showcasing a bit of what Android Wear has to offer:

The first movers
Google said on its blog that it already has a list of phone makers it's working with for Android Wear, including Asus, HTC, LG, Motorola, and Samsung. The company is also working with chipmakers and one of the leading watch companies, Fossil Group. Google said that watches powered by Android Wear will pop up later this year.

Why this matters to Apple
Just as with Android for smartphones, Google wants to dominate the smart watch and wearables space with Android Wear. By releasing a specialized version of Android that's optimized for wearables, the company shores up its place in the growing segment.

Lg G Watch

LG G Watch. Source: LG

For device makers releasing watches, the initial hype may be later overshadowed by on all-out war to gain traction. Just a handful of companies control most of the Android-powered smartphone market, and I can't imagine Android Wear devices being any different. This means there will be a flood of devices running Android Wear, possibly even before Apple launches its own smart watch.

When Apple debuted the iPhone with iOS, it was clearly years ahead of anything on the market. The phone gobbled up smartphone market share quickly and then Google and phone makers banded together to take on Apple. But with Android already a solid OS leader now, it may be harder for Apple to make headway against smart-watch makers running Android Wear.

Google is working closely with LG on its G Watch smartphone, set to go on sale this summer. Motorola also debuted the Moto 360 this week, a sleek design that looks the most appealing of all smart watches so far. Meanwhile, all we have are rumors of a possible Apple smart watch.

Foolish final thoughts
I think Google's main advantage over Apple is the prevalence of Android devices. We all know that Android dominates the smartphone, grabbing about 79% of worldwide smartphone OS market share in 2013. This number will help feed Google's ecosystem when Android Wear devices go on sale.

More Android phones leads to more Android Wear devices, which lead back to more Android phones. And within all that, Google keeps users tapping into its search and cloud services.

I also think Google Now's predictive systems integrated into Android Wear could outperform some of Apple's current OS offerings. Siri has improved a lot over the past few years, but Google is much more focused on predictive integration than Apple has been. Of course, Apple could enhance this with the launch of an iWatch, but for now I think Google has the upper hand.

The Motley Fool's report on investing in wearable computing
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million wearable devices could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to read the full report.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple, Fossil, and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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