Samsung Plans to Introduce a Stand-Alone Smartwatch; Electronics Maker’s Watch Will Make Calls Without Being Tethered to a Smartphone; Expected in Summer Months

Samsung Plans to Introduce a Stand-Alone Smartwatch

Electronics Maker’s Watch Will Make Calls Without Being Tethered to a Smartphone; Expected in Summer Months

MIN-JEONG LEE And YUN-HEE KIM

Updated May 23, 2014 12:01 p.m. ET

What’s News: Samsung plans to roll out a smart watch that doesn’t need to be tethered to a phone, Google is developing a new tablet, and Donald Sterling will allow his wife to sell the Clippers. Tanya Rivero reports. Photo: Reuters

Samsung Electronics Co. 005930.SE +0.14% is making another run at that perennial technogeek dream, the wrist communicator, with plans to unveil a smartwatch that works as a stand-alone phone in the next few months.

Samsung’s watch-phone will be able to make and receive calls without being tethered to a smartphone, something most smartwatches on the market now can’t do, according to people familiar with the company’s plans. It will also take photos, send email and come with GPS, Bluetooth and a heart monitor, the people said—a suite of features that would make the gadget-toting James Bond proud. (The fictional British spy used a wrist walkie-talkie in the movie For Your Eyes Only).

The South Korean technology giant—currently the top seller of smartphones—is in talks with telecom carriers in the U.S., South Korea and Europe about the watch-phone, and hopes to unveil the gadget between June and July, the people said. It will run on Samsung’s homegrown operating system, Tizen, which was co-developed with Intel Corp.

The people declined to say what the device would be called, or whether a user would make calls by holding the watch up to his or her mouth.

Wrist communicators have been a staple of pop-culture imagery since the 1940s, when comic-book detective Dick Tracy started wearing a two-way wrist radio. Real-life iterations have been a lot rarer and short-lived, from the Sylvania two-way wrist transmitter shown in a 1953 issue of Popular Science magazine to Samsung’s own first attempt at a stand-alone watch-phone, the 1999 SPH-WP10, which was pulled from the market because of lackluster demand.

The recent craze for wearables has breathed new commercial life into wrist-communication devices, with companies from Google Inc. GOOGL +1.50% to ZTE Corp. planning smartwatches. Apple Inc., AAPL +1.13% Samsung’s closest rival in smartphones, is widely expected to launch a smartwatch later this year.

Samsung has four on the market—including the Galaxy Gear, powered by Google’s Android operating system, and the Gear 2, running on Tizen. The company has been marketing them with clever ads, one of which traced the evolution of watch-type communication devices from Dick Tracy through TV shows such as Knight Rider and Star Trek.

But all of those devices need to connect to a smartphone to make calls or browse the Internet.

Samsung’s new watch-phone, which will come with a SIM card, will be one of a handful of stand-alone devices on the market, and the only one yet from a major manufacturer.

Many analysts say the smartwatch—with phone functions or without—isn’t likely to amount to much as a business yet.

“There’s still the question of why people really need to buy smartwatches today,” said Lee Seung-woo, an analyst at IBK Securities in Seoul. “Samsung is estimated to be the dominant vendor of wearables, but it will take quite a bit of time for sales to contribute to the company’s earnings,” he said, adding that the market for smartwatches is weaker than smartphones.

Market-research firm IDC expects shipments of wearable devices including smartwatches to triple this year to more than 19 million units; smartphone sales are expected to increase 19.3% to 1.2 billion units.

The smartwatches have another function for Samsung, however. The company is increasingly using them to test out its Tizen operating system, the centerpiece of Samsung’s push into software to better compete with Apple and Google.

The company aims to use Tizen to connect its wearables with an array of other products, including cameras, refrigerators and air conditioners, executives have said.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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