Apple (NASDAQ: AAPL) wasn't the first company to release an mp3 player, nor was it the first to release a smartphone, or even a tablet. When its smartwatch goes on sale next month, Apple will be late to the party yet again: Apple Watch will enter a crowded smartwatch field full of products that have, in some cases, been on the market for years.
Most notably, Samsung (NASDAQOTH: SSNLF) launched its original Galaxy Gear in the fall of 2013. The Galaxy Gear (subsequently rebranded as simply Gear) was a flop, and its many successors haven't found much success, either. Although they have their differences, Samsung's Gears offer remarkably similar functionality to Apple Watch, which may portend a shaky future for Apple's new product. Still, Apple has a few advantages that give its wearable an edge over Samsung's.
Like Apple Watch, Samsung's first-generation Galaxy Gear boasted about one day worth of battery life. Its follow up, the Gear 2, increased that to about three days, but neither product lasts particularly long away from its charger.
Both Apple Watch and Samsung's Gears are capable of taking voice calls, dictating to a virtual assistant, receiving notifications, and running third-party apps. Both track their wearer's heart rate, steps taken, and other activity, and communicate it to a paired app on a companion smartphone. Samsung's Gears have been criticized for their unintuitive interface, but surprisingly, Apple Watch may be even worse. Certainly, the Apple Watch is more complex, with combination of a button and a digital crown in addition to registering a variety of different taps. Nilay Patel, writing for The Verge, simply labeled it "confusing."
At least in terms of their functionality, Apple Watch and Samsung's Gears are not remarkably different -- certainly not in the manner some imagined prior to the Apple Watch's unveiling. Yet Samsung only shipped an estimated 800,000 Galaxy Gears in its first two months on the market -- expectations for Apple Watch are running considerably higher.
It's possible that Apple Watch could flop, but it should at least perform better than Samsung's Gears.
Samsung offers its Gears with a variety of different, interchangeable colored straps, but the customization options pretty much end there. There's only two different watch cases, for example, and they differ only subtly in color.
Both watches are rectangular, but Samsung's Gears, with their plastic straps and brushed metal cases, look decidedly digital. Unlike Apple Watch, there's no aluminum or gold option, no steel bands or leather loops. Physical appeal is a matter of personal preference, but the greater diversity of choice makes it more likely that consumers will find at least one Apple Watch style to suit their needs.
A larger, more unified base
More significant, however, could be a larger base of potential consumers. Apple Watch does not work with every iPhone ever made (iPhone 5 or 6 models only) but Apple still has a base of hundreds of millions of iPhone owners that it can target.
Samsung, in contrast, was initially selling the Galaxy Gear to a tiny subset of its customers -- those that owned one particular model, its (then brand new) Galaxy Note III. In time, Samsung updated its software, expanding it to a larger range of phones, but it remained mostly confined to its higher-end Galaxy flagships and their many modest variants.
Samsung also has to compete within its own ecosystem against Android Wear -- Google's competing vision of what a smartwatch should be. Compared to both Apple Watch and Samsung's Gears, Android Wear devices are less complex, but still give owners of Samsung's phones a strong alternative to its own products. The Moto 360, G Watch R, and Zenwatch are all stylish Android Wear devices competing for the wrist space of Galaxy owners -- Apple doesn't face that problem.
The Apple Watch has other, more subtle advantages over Samsung's Gears.
Apple Watch works with Apple Pay, allowing its owner to pay for things with a quick tap of the wrist. Apple Watch includes its own form of gesture and heart rate-based messaging; Samsung has nothing in this department. Apple has hundreds of retail stores scattered across the U.S.; Samsung's U.S. retail operations are limited to its shop-within-a-shop concept at Best Buy.
Analysts are all over the board when it comes to estimating Apple Watch's success. The highest estimate comes from Cowen, which expects as many as 31 million Apple Watches to be sold in the first year.
If so, Apple Watch could ultimately sell as well as Samsung's upcoming flagship smartphone, the Galaxy S6. That would be quite a feat, and would make all previous smartwatch efforts look utterly insignificant in comparison.
That may not be likely, but Apple Watch should at least outsell Samsung's Gears.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). 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.