The race to build the defining smart watch is on.
Fueled by the initial success of Pebble — the celebratedd Kickstarter-funded project that raised enough money to hit the market this year — a market now exists for a timepiece bracelet that does so much more than merely read time.
Apple Inc. (NASDAQ:AAPL) has been rumored to be working on an iWatch for months, and rival Samsung confirmed this month that it’s already working on one.
One can always argue that Pebble has already built the iconic smart watch. The device uses Bluetooth to allow smartphone owners to check everything from caller ID on an incoming call, to read email, to check social media notifications.
Apps also allow for Pebble owners to receive everything from weather alerts to run and bike route tracking (for GPS smartphones). Yes, you can use your watch to control the music play list on your phone or iPod touch.
Pebble also retails for just $150, a price that may scare away Apple Inc. (NASDAQ:AAPL) or Samsung if they were planning on hitting the market at $200 or higher.
However, they will come — and so will others.
Investors may be ready to place bets on who will win the smart watch race, but it’s far easier at this point to begin talking down to potential losers.
You didn’t think there would be winners championing a disruptive technology without hurting the disrupted, did you? Let’s go over a few companies that may grow to dread the smartphone.
Facebook Inc (NASDAQ:FB)
A key Pebble feature is that it pushes Facebook notifications to your timepiece. Receiving messages on your watch may seem to be a great way to get the social networking website’s billion active users even more engaged, but how will Facebook Inc (NASDAQ:FB) monetize this platform?
It can’t. Facebook took a long time to convince investors that it can monetize the small smartphone screen nearly as effectively as traditional desktop usage. How’s it going to cope now that screens are getting even smaller?
Google Inc (NASDAQ:GOOG)
When it comes to wearable computing, no one seems to be on the cutting edge the way that Big G is leading the charge. Have you seen those Google glasses?
Google is smart. It knew that tablets and smartphones would eat into conventional PC Internet usage, so it made sure that it cornered the market with its Android open source mobile operating system. Google’s goal is to serve more ads. Online advertising continues to make up the lion’s share of its business.
How will it profit if folks can look at their watches for email texts and weather updates?
Google Inc (NASDAQ:GOOG) may very well put out its own smart watch, but if it doesn’t, it’s only because it realizes that it’s a revenue stream that will be difficult to paddle through.
Netflix, Inc. (NASDAQ:NFLX)
The most popular third-party app when the iPad hit the market was Netflix’s streaming application. Tablets were made for streaming video, and Netflix has been one of the unheralded success stories of this new era.
One can argue that a smart phone won’t get in the way of streaming, at all. No one was going to stream video from a tiny screen on the wrist, and it’s not going to take away from the time earmarked to kick back and stream video.
Are you sure about that?
New technology results in prioritization of our wants. The reason why Windows has been a flop on smartphones and tablets is that we no longer desire to do the things that tethered us to that operating system. What if more interaction with a smart watch creates a new level of entertainment that doesn’t require hours of streaming video? What if a smart watch tethered to a smartphone makes us more social in the real world? What if new forms of engagement and diversion occupy more of the time that we spend nurturing the one-way relationship that is video consumption?
There’s no point in getting deep about this. Technology changes the way we do things. Tablets helped Netflix. The next big thing may go the other way.
NIKE, Inc. (NYSE:NKE)
I singled out the sultan of swoosh in picking out potential losers of Samsung’s Galaxy S4 smartphone, but Nike is also in the crosshairs this time.
Let’s talk about the Nike FuelBand. I’ve proudly worn Nike’s activity-tracking bracelet since it hit the market 13 months ago, and I’m seeing a lot more of them on people. Upstarts Fitbit and Jawbone UP are also gaining traction in these fitness-monitoring wristbands.
What happens when smartphones take over? Do we go with both wrists, or will the limited FuelBand — at the same $150 price point, mind you — fade in popularity?
Pebble’s watch works with smartphones to track activity, and that can be charted out in a growing number of free applications.
As I argued earlier, Nike will benefit if health-monitoring watches inspire consumers to get more fit, and buying Nike-branded footwear and clothing to make it happen. However, as far as the Nike+ Digital Sports division, the smart watch will be a ticking challenge.
The article 4 Shocking Losers of the Smart Watch Race originally appeared on Fool.com and is written by Rick Munarriz.
Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Apple, Facebook, Google, Netflix, and Nike. The Motley Fool owns shares of Apple, Facebook, Google, Netflix, and Nike.
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