Huawei Will Beat Rival Xiaomi to the Smart Watch

Huawei-will-beat-rival-xiaomi-to-the-smart-watch

Chinese technology company Huawei has confirmed that it will be launching an Android Wear smart watch at Mobile World Congress 2015 in Barcelona. Currently, there are six smart watch devices available on Android Wear. These watches include the Moto 360, Sony Smart Watch 3, LG G Watch, LG G Watch R, Samsung Gear, and the ASUS ZenWatch. That number should grow significantly during 2015, with MWC being a likely venue where many of these will be announced.

Huawei has been selling a smart fitness band in China, the TalkBand B1, which also doubles as Bluetooth headset. I got a glimpse of it at CES 2015 and thought it was an interesting take on the fitness band form factor, combining two utilities into one device. Huawei also plans to launch a newer version of the TalkBand in addition to a smart watch at MWC 2015.

Huawei is one of the top five smartphone vendors in the world, a list that also includes the likes of Samsung, Apple, Xiaomi, and Lenovo. Most of these vendors have announced plans for smart watches or already have smart watches available. Samsung launched its first smart watch, the Samsung Gear, in 2013 and is currently the largest smart watch vendor with four different smart watch models available. Lenovo recently acquired Motorola Mobility, which is behind the Moto 360, launched in late 2014. The Apple Watch is expected to release in April 2015.

It’s no secret that Huawei and Xiaomi compete head to head. Xiaomi has been tipped to be the leading smartphone vendor in China for 2014. The Chinese market is highly competitive and fragmented, with vendors moving up and down every quarter. To everyone’s surprise, Apple had a massive 4Q 2014, making it the largest vendor in that quarter. Xiaomi is also growing its presence in India and has global ambitions. Huawei sees Xiaomi as a key competitor in China but also in other markets like India, where Huawei is pushing hard. Unlike Xiaomi, Huawei has a smartphone presence in the U.S. and in Europe, and is also expanding in Africa, Latin America, and the Middle East.

Xiaomi does have a $15 smart fitness band on offer called the Mi Band, which has sold more than 1 million units in China. However, the company does not have a smart watch offering yet. Hugo Barra, the ex-Google executive and VP of Android Product Management is now leading Xiaomi’s global efforts outside China. Hugo has said in the past that Xiaomi is looking at smart watches closely but hasn’t made firm decisions. Xiaomi’s lack of Western presence buys them some time to think about its strategy. So far, China hasn’t really shown an appetite for smart watches, although companies like Shanda and Yingqu Technologies have had some limited success. My guess is that Xiaomi will launch something later in 2015 and will keep a close eye on how the Apple Watch sells in China.

With Huawei using Android Wear, it is clear that the watch is targeted at audiences in the U.S. and Europe. Huawei is hoping to steal market share away from Samsung, Lenovo, Sony, and LG on Android Wear watches. Once Xiaomi launches its watch, which will most likely be targeted at the Chinese market, they have a larger opportunity than Huawei, and will compete directly with the Apple Watch. For Xiaomi it might also make sense to build its own customized watch OS, possibly based on Android. Lenovo could also launch a Chinese version of the Moto 360 at some point on Android.

So, while Huawei has pipped Xiaomi on the smart watch, its strategic ambitions are quite different, and in terms of smart watch market share the two might end up not competing at all.

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