Android Wear – Wearing thin

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Being closed is not what is causing Wear to fail.

  • The fact that Android Wear is not doing well has nothing to with software and everything to do with how unsuited it is for a wearable device.
  • There are complaints floating around the industry that the fact that Android Wear is not very customisable is hurting its appeal to handset makers.
  • Android Wear is not very customisable because it is not open source code but instead is completely controlled and managed by Google.
  • The irony is that fragmentation in wearables is actually much less of an issue than it is in smartphones and it is here that Google needs to focus its efforts.
  • RFM research indicates that the lack of ease and fun of use is a major reason why Android devices are used much less than an iOS device at the same price point.
  • This is mostly due to the endemic fragmentation that plagues Android and is a problem which Google must fix if it is to:
    • 1) ever offer a proper challenge to iOS,
    • 2) prevent Microsoft from stealing market share when it gets its act together.
  • This is why I strongly believe that Google will end up turning open source Android into a closed proprietary OS similar to Windows Phone or iOS.
  • Almost all handset makers are now dependent on Google as a large majority of their users in developed markets demand Google services.
  • Hence, there is very little to prevent Google taking complete control in developed markets as handset makers have nowhere else to go.
  • In emerging markets it is a very different story as users do not demand Google services and so other options such as writing the code oneself, Cyanogen, Ubuntu, Firefox, Tizen and Sailfish have a much greater chance of being successful.
  • The bigger problem with Android Wear is that even a stripped down version of Android is unsuitable for a wearable device.
  • A wearable should be cool, be small, function well and have a battery life measured in months not hours.
  • Android wear does none of these things and consequently I think that it is devices like the Misfit Shine that will dominate the wearables space once a good use for these products has been found.
  • So far not even the Apple Watch makes a decent replacement for a traditional time piece and consequently I think that it will fail to ship in the kind of volumes that many are predicting.
  • Consequently, I suspect that wearables will end up running proprietary software that is suited to their purpose and that the third party apps. ecosystem will be far less important there than it is on smartphones and tablets.
  • While Android Wear is on the right path in terms software consistency, it is ill suited for wearables and I think it simply serves as a sign of what Google is trying to do with Android overall.
  • In the meantime, the door remains wide open for Microsoft which remains my top choice for exposure to the ecosystem.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

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