The Biggest Challenge Apple Inc.'s iWatch Will Face in Beating Android Wear

Android Wear puts a heavy emphasis on Google Now for predictive and proactive notifications containing relevant information. This is an area where Apple can't easily compete, since it lags Google's ability to gather and analyze user data. Will this be the killer app for smartwatches?

Jul 6, 2014 at 9:00AM


Moto 360 running Android Wear. Source: Motorola.

Apple (NASDAQ:AAPL) isn't usually the first to market; it just tries to be the best in the market. Google (NASDAQ:GOOG)(NASDAQ:GOOGL) announced Android Wear back in March and further detailed the platform at Google I/O last month. There are already 3 Android Wear devices in the pipeline, in addition to other smartwatches such as Samsung's Galaxy Gear lineup. 

However, there will probably be some very fundamental differences with how Apple plans to tackle the nascent smartwatch market. Can the iWatch beat Android Wear?

Proactive versus reactive
One of the biggest features of Android Wear is a heavy emphasis on Google Now, the search giant's predictive assistant feature that attempts to intuitively offer information before you even ask for it. This may end up being the biggest point of differentiation between the iWatch and Android Wear devices. 

Apple is introducing a "Hey, Siri" function in iOS 8 to activate Siri, which should similarly make its way to the iWatch for the obvious usage model. It will be comparable to Google's corresponding "OK, Google" command. However, these will both be reactive functions once the user initiates action.

Google Now, on the other hand, is very proactive in guessing what information may be relevant to the user ahead of time. Google has gotten quite good at collecting and analyzing user data over the years.

This will be very difficult for Apple to replicate. Apple doesn't have as much access to the types of user data that facilitates predictive proactive notifications that Google does. Additionally, this isn't a field that Apple has focused on much, while Google very much has. Instead, Apple puts more effort into product design and vertical integration. 

Data is king
Most of the data that powers Google Now comes from what Google parses from its various services. That includes Gmail, Google Calendars, search history, and location data, among many others. 

Gmail is far more popular than iCloud email, so Apple would need to get users to switch to iCloud email to get access to that data. Then it would need to further bolster its "deep learning" capabilities to mine and interpret that data. Search history is also another area where Apple has no access. Google has major advantages here with enabling proactive information.

Location data and history is available from any iOS or Android phone. Apple Maps can deliver directions and gauge traffic conditions and continues to improve overall performance, but it's fair to say that Google Maps still has an advantage here as well.

That's not to say that Apple couldn't gain more access to user data, but rather that it's far behind with data collection and analysis compared with Google.

Other ways to win
Smartwatches are such a young form factor that the true "killer app" that will drive adoption has yet to be determined. Proactive notifications may prove to be the killer app -- but they also may not. Alternatively, the killer use case could be related to health and fitness.

Android Wear will also support various health and fitness tracking apps, but Apple will probably execute better in this department. Not only is Tim Cook a fitness enthusiast, but Apple is also expected to partner with Nike and could leverage its existing Fuel platform.

Furthermore, since tracking health data will require a hardware element in the form of various sensors, Apple's strengths in vertical integration will give it an advantage. The iWatch is rumored to have over 10 various sensors. Android Wear will face familiar hardware fragmentation as various OEMs (which are notorious for cutting corners wherever possible for the sake of their own margins) use different combinations of sensors, which will make it a less unified and less effective platform for health tracking. 

Another possibility: Perhaps the killer smartwatch use case will be something that no one sees coming yet, and will only emerge after third-party innovation flourishes within the platform.

Will this component play profit from Apple's iWatch?
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!

Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends and owns shares of Apple, Google (A and C shares), and Nike. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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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