Korean tech giant Samsung (NASDAQOTH: SSNLF) beat Apple (NASDAQ: AAPL) to the punch, in launching the first truly serious attempt at a mainstream smart watch when it unveiled its Galaxy Gear in September. There was just one problem: Source: Samsung It wasn’t exactly as “smart” as Samsung would have you think. At least that seemed to be the prevailing wisdom in the weeks following the Galaxy Gear’s public debut. However, as Samsung’s smart watch nears its third month on the market, it’s presenting a growing problem for Apple and its investors. Why? Because despite all contrary opinions, the Galaxy Gear is actually selling. In fact,…
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Korean tech giant Samsung (NASDAQOTH: SSNLF) beat Apple (NASDAQ: AAPL) to the punch, in launching the first truly serious attempt at a mainstream smart watch when it unveiled its Galaxy Gear in September. There was just one problem:
It wasn’t exactly as “smart” as Samsung would have you think. At least that seemed to be the prevailing wisdom in the weeks following the Galaxy Gear’s public debut.
However, as Samsung’s smart watch nears its third month on the market, it’s presenting a growing problem for Apple and its investors.
Because despite all contrary opinions, the Galaxy Gear is actually selling. In fact, it’s selling surprisingly well at that.
According to reports from both Reuters and The Wall Street Journal, Samsung sold over 800,000 Galaxy Gear watches in the two months they’ve been on the market. This, of course, runs counter to nearly every expectation surrounding Samsung’s smart watch.
To be fair, there were plenty of reasons to believe the Galaxy Gear wouldn’t succeed, at least not yet.
Most reviews claimed, while kind of cool, that the device was more prototype than a true disruptor; a precursor to what someday could eventually be a mainstream product.
For starters, many felt the ecosystem surrounding the Galaxy Gear simply wasn’t robust enough to drive mass adaption. Although the Galaxy Gear is indeed a smart watch in that it runs on a version of Google‘s Android mobile operating system, the Galaxy Gear’s overall functionality remained relatively muted. Its typical uses were making things like reading text messages or checking the weather slightly more efficient by allowing users to avoid taking their phones out of their pockets. And while certainly handy, most believed consumers wouldn’t want to pay the US$300 price tag for this admittedly limited functionality.
It also seemed like the developer community had yet to turn its attention on the smart watch market. At the time of its unveiling, the Galaxy Gear came with limited selection of only 70 apps for users to add to the watch.
Yet, despite all of this, Samsung is succeeding while Apple remains nowhere to be seen.
Don’t count Apple out
Even in light of Samsung’s unexpected success with the Galaxy Gear, it probably shouldn’t come as much of a surprise that Apple’s much-expected iWatch still remains nowhere to be seen for one big reason.
Apple doesn’t launch incomplete products, especially in its first attempt to break into and often redefine a product category.
Clearly, Samsung seized what appears to be a budding market opportunity here. However, it’s fair to say the Galaxy Gear still has some observable flaws, a few of which I highlighted above.
In a similar vein, each of Apple’s amazingly successful products that it’s launched since 2000 also had some other first-mover in their respective emerging industries. Jukebox software and MP3 players were nothing new when the iPod was launched. BlackBerry and Palm dominated the smartphone market when the iPhone was introduced in 2007. Amazon launched the Kindle in 2007, years before the first iPads.
In each of these cases, Apple waited for the optimal conditions to form rather than simply rushing into an emerging space. That involved waiting to get the hardware, software, and ecosystem all properly aligned before making its big push into these spaces.
Samsung’s shown a grim determination to prove it can out innovate Apple. And in the smart watch space, Samsung certainly has thus far. However, if history is any indicator, tech investors would be short-sighted to overlook Apple’s large shadow.
At the end of the day, being first into an emerging technology platform shouldn’t be what matters most to investors. As we’ve seen from countless examples, the company that makes the greatest leap forward is often the one that’s most handsomely rewarded. And when it comes to the kind of breakthrough changes that truly usher in a new era for a product or market, you’d be a fool to count Apple out.
The smart watch market will be no different.
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A version of this article, written by Andrew Tonner, originally appeared on fool.com.