The smart phone has been around for several years now and has matured significantly since the days of the original iPhone.  Is it just me or does the market seem to be getting saturated?

The likes of Samsung, Apple, Google, Nokia and HTC are pumping out new models on a yearly basis.  With all of these devices floating around out there, it was inevitable that a new product category would arise.  Enter the smart watch.

As the name implies, this new gizmo would be more than just a watch.  Imagine a mini smart phone that sits on your wrist that can be configured for various purposes and supports apps.  According to ABI research, 485 million of smart watches could be sold by 2018.

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Smart Watches: Next Big Thing?

Though this gadget has been making a lot of headlines recently, smart watches have been around for awhile.  The Nike Fuel Band has been on shelves for a few years and has some limited smart watch like characteristics.

Sony also has a smart watch that they released in 2012 which needs to be connected to an Android based phone.  Their offering lets you check Twitter, the weather, read SMS messages and more.  Reviews on the Sony offering are good but not great.

Another up and coming product is the Pebble, a very full featured, customizable watch.  You can change the watch face (analog, digital), use it as a bike computer or even a golf range finder.

$150 for a mini computer on your wrist is probably not a bad price if you utilize all its capabilities.  One of the best features is the ability to write code for Pebble and distribute it to the community.  There’s nothing better than having an army of geeks writing apps for your product for free.

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While these initial offerings may be good, they’ll need to watch out (pun intended) for tech giants like Apple and Samsung.

Apple has long been rumoured to be making a smart watch and Samsung just came out and said they are making one too.

Hopefully a new product or two like the smart watch and an Apple TV will turn Apple’s stock around after its tumble in recent months.  Note: I am an Apple shareholder though I sold 50% of my shares when the stock was trading at $660.

While a smart watch may be the next big thing in tech gadgetry I think we need to dial down the hype a little bit.

How many of you remember the old Casio calculator watch?  How many people did you know that wore one of these things?  Sure you could use it to figure out the tip on a restaurant bill but this type of watch was lacking one major thing, the cool factor.

Watches are meant to be cool

For many people, a watch is far more than just a clock on your wrist.  A watch is a fashion statement, a piece of jewellery or even a symbol of success.

A computer on your wrist does not embody these things.

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We have an expectation that watches should be durable and last a very long time.  With the pace of change in technology, we could see new smart watches getting pumped out every couple of years.  This runs contrary to the whole experience of owning a watch.

While I’m sure many tech or outdoor enthusiasts will pick one of these up, I’m not sure the mainstream public will have the same reaction.  There will be a market for smart watches but it will probably be more of a niche one than the broader smart phone market.

Would you wear a smart watch with a suit?  Doubtfully.  On a date?  Probably not.  In grade school?  Perhaps, but your teachers probably wouldn’t be happy about it.

If the likes of Samsung and Apple can make smart watches really, really cool, the product will do well.  Otherwise it will remain a niche item.

Remember, if you are already carrying one “smart” device, your phone, why would you need to carry another one?  Owning two gadgets that have a lot of overlap in terms of features isn’t a good use of resources.  The watch would have to offer a lot of different capabilities that your phone can’t.

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While I may be a bit skeptical on the perceived size of the market for high tech watches, I do see a big opportunity for companies if they can somehow produce a product that everyone wants.

Andrew Martin is a personal finance and investing blogger from Toronto, Ontario with a background in technology and a passion for travel.  His blog, She Thinks I’m Cheap aims to help Canadians make more money by sharing facts, stories and advice.

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