Apple (AAPL) loyalists are eagerly waiting for the release of the iWatch. However, Microsoft (MSFT) is expected to release a smartwatch before Apple does. A patent application for a "WEARABLE PERSONAL INFORMATION SYSTEM" was filed by Microsoft in October 2012. Microsoft got the patent application published earlier this month. This development is in line with the company's new Windows on Devices initiative.
Microsoft hasn’t officially announced its plans for Internet of Things (IoT) but the smartwatch patent should confirm to investors that Nadella is not letting Windows get stuck on the realms of computers and smartphones. The Internet of Things is a fast growing industry. The experts are forecasting IoT to grow into an $8.89 trillion industry by the end of 2020. The smartwatch is integral part of this new smart devices industry
A Sneak Peek At The Smartwatch:
According to the published patent document of Microsoft, the company's smartwatch shares the same concept and purpose with other smartwatch products already in the market. It sports a fitness tracker, mini-smartphone that will run on Windows and be compatible with all Windows devices. The Microsoft smartwatch will be no different from the Apple iWatch in terms of features. Engineers of the companies will embed their own products with fitness tracking, connectivity, video/still cameras, and call and SMS functions. Microsoft’s capability to sell both high-end and low-end smartwatch products and the total addressable market should offset Apple's hold on premium-paying customers.
The Analysts’ View:
The analysts feel that the market for smartwatches is growing faster than expected. Intel wouldn't have bought Basis Science had they not seen any real potential in connected and smart timepieces. These experts believe that Microsoft is going to use the patents and talents of Nokia's old D&S unit to deliver a high-quality smartwatch which will compete with many other players. The market saw a ten-fold increase over 2012's 300,000 unit sales number when Samsung and other vendors sold 3 million watches worth $711 million in 2013. The analysts feel the sales could reach a whopping $2.4 billion by the end of this year.
To Conclude:
The release of a smartwatch is unlikely to move MSFT higher but it's a small step toward the future $8.89 billion Internet of Things industry. The technology from a smartwatch can be extended to other wearables and appliances. But as they say, little drops of water make an ocean, so lets just hope that this in future turns out to be a profitable venture.
