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Can Microsoft Win in Smartwatches?

by Neil Mawston | 7月 19, 2014

According to our Wearables (WDE) research service, global smartwatch sales will grow a healthy +750% in 2014. The smartwatch is clearly a high-growth market.

Rumors abound across the industry that Microsoft / Nokia will enter the smartwatch fray for the first time in the US during October or November 2014. Talk is of a fitness tracker with 5 to 15 biometric sensors that integrate closely with Microsoft apps.

Microsoft has been here before, with its digital SPOT watch launched back in 2004. The SPOT delivered snippets of light info, such as weather forecasts, via FM radio waves. The SPOT was a flop.

What does Microsoft need to do to succeed in the smartwatch market this time around? We recommend at least three core strategies:

1. Any Microsoft smartwatch must look and feel like a traditional wristwatch. It is a proven formfactor;

2. Pricing must be keen. Our research indicates US consumers are surprisingly price-sensitive for almost all brands except Apple;

3. A high-profile fitness or sports brand should be introduced at co-launch. For example, Apple is rumored to be co-launching with Nike for its new "iWatch" portfolio.

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