Channel Partners Scoping Out Direction In Wearables Market

Despite the excitement growing around Apple's imminent release of its new smartwatch, partners are still fleshing out the opportunities that wearables will bring to the channel.

The Cupertino, Calif.-based company recently announced that Apple Watch, which will feature a curved, rectangular stainless steel frame with a sapphire display, will hit markets in April.

However, partners said the wearable device is still working to define itself as an enterprise-targeted product, which would make it more applicable to the channel space.

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"It's difficult to say what this launch will mean for resellers within the channel," said Michael Oh, CEO of Boston-based Apple partner Tech Superpowers. "I think the launch will be interesting for partners to bring consumers through the door for wearables, but I don't think it will necessarily make resellers rich. Maybe channel providers who are, in effect, building their own ecosystem around wearables will benefit overall. Ultimately, though, the watch itself won't bring money on its own."

According to Apple, the watch will display options for an 18-karat gold and aluminum model, as well as six various different-colored straps.

Though information about the smartwatch is slim so far, Apple announced it will be sold in two sizes, 38 mm and 42 mm, and will run on an iOS-based interface that is redesigned from the operating system structured for the iPhone and iPad.

Douglas Grosfield, president and CEO of Cambridge, Ontario-based Xylotek Solutions, agreed that smartwatches "aren't there yet" for enterprise-focused solution providers, but that the consumer demand for the product is flourishing.

"Opportunities for the VAR community at this point are likely a nonstarter in that there will be little actual opportunity until someone breaks into the enterprise space in a meaningful way," Grosfield said. "Apple is joining the game in the second period, but that shouldn’t hold them back for many reasons … The wearables market is just beginning to define itself, what it means in the consumer space and, more importantly, how it will fit into the far more lucrative and exciting enterprise space."

During Apple's earnings call, when the April release was announced, CEO Tim Cook said he had "high expectations" for the smartwatch, noting that the product development is on schedule.

"Developers are hard at work on apps, notifications and information summaries that we call glances, all designed specifically for the Watch's user interface," he said. "The creativity and software innovation going on around Apple Watch is incredibly exciting, and we can't wait for our customers to experience them when it becomes available."

NEXT: Apple Watch Could Open A Blooming Market

While Apple Watch's release date has sent out ripples of excitement among consumers and partners, the product is certainly not the first smartwatch to hit the market.

Other vendors, like Samsung and LG, started designing and shipping out smartwatches a while ago. Swiss company Swatch joined the trenches Thursday by announcing its Android and Windows software-powered smartwatch to be launched in the next three months.

Samsung, in particular, which is already feeling heat from Apple in its mobile division, may be under pressure from the release of Apple's new smartwatch. The South Korea-based company offers an array of Gear S series watches, including Gear Live and Gear 2.

"I think that Apple has such a huge base of dedicated customers at this point that Apple Watch will initially sell pretty well," said Charles King, analyst at market researcher Pund-IT. "Apple has a few things going for them, including its larger user base, and loyal customers who want to open their wallets for anything the company puts out."

Tech Superpowers' Oh agreed, adding that Samsung is in a particularly vulnerable place with its smartwatch market due to the Apple Watch announcement.

"I don't think Samsung's prospects are good … they got a little press for their wearables but no traction," he said. "Samsung is not in a good position to leapfrog Apple in any way, shape or form. They don't have the same rich revenue stream in their mobile division. It's not a disaster for Samsung, but it will leave them fewer corners of the ring to move into."

PUBLISHED FEB. 5, 2015