War in the Palm: Samsung and Apple, Now the 'WE' War

W(Wrist), Smartwatches Show Steady Growth
Samsung to Launch Two 'Galaxy Watch' Models in Second Half
E(Earphone), Wireless Earphones Emerging as New Market
Samsung to Unveil 'Galaxy Buds+' in February
Apple Expected to Release AirPods in Second Half

[Asia Economy Reporter Han Jinju] The battlefield between Samsung and Apple has expanded from the so-called "war in the palm" of smartphones to the "WE" (WristㆍEar) war. On the surface, this is due to the rapid growth of the smartwatch worn on the wrist and the wireless earphone inserted in the ear markets. However, it also reflects the reason why the smartphone, which has led the information and communication technology (ICT) market for over a decade, is facing growth stagnation.

◆ W War, Galaxy Watch vs Apple Watch = According to industry sources on the 31st, Samsung Electronics is developing two types of smartwatches to be released in the second half of this year. The codename is "Noblesse," and it is expected to launch a product with a classic design. Samsung changed its smartwatch brand from "Gear" to "Galaxy Watch" in the second half of 2018 and introduced the Galaxy Watch, and in February last year, it launched the Galaxy Watch Active, specialized for sports.

A Samsung Electronics official explained, "For the past one to two years, we have been applying the Galaxy brand to smartwatches and bands, focusing on expanding the Galaxy brand ecosystem," adding, "Although the sales proportion is lower compared to smartphones, the wearable market is maturing, so we are steadily expanding the lineup."

Smartwatches were once highlighted as the device to follow smartphones, but instead of explosive growth, they have recorded steady growth. The industry expects the smartwatch market to grow at an average annual rate of about 9-10%. The smartwatch market is led by Apple, but Samsung, Fitbit, and others are fiercely competing. According to Strategy Analytics, in the third quarter of 2019, the smartwatch market share was Apple (47.9%), Samsung (13.4%), Fitbit (11.3%), with total shipments reaching 14.2 million units.

Recently, products specialized for exercise have emerged, driving the expansion of the smartwatch market. Products targeting millennials who prefer to measure and share their exercise volume are increasing. Collaboration between ICT companies and sports brands is also active. Samsung Electronics released the "Galaxy Watch Active2" and the "Under Armour Edition" for running enthusiasts last year. Apple has been releasing Apple Watch models in collaboration with Nike since 2016.

In the early days, cost-effective smart bands overwhelmingly dominated, but recently, the proportion of smartwatches has also increased. Smartwatches are absorbing the functions of fitness bands. According to Canalys, shipments of smart bands and smartwatches in the third quarter reached 45.5 million units, a 65% growth compared to the same period last year.

◆ E War, Galaxy Buds vs Apple AirPods = Wireless earphones have been the product category with the most remarkable growth over the past 2-3 years. Since Apple launched the "AirPods," technical features such as interoperability with smartphones, tablets, and PCs, and convenience functions using artificial intelligence (AI) assistants have begun to stand out. According to market research firm Canalys, wireless earphone shipments reached 43 million units as of the third quarter last year, a 183% increase from 15 million units in the same period the previous year.

Samsung Electronics will unveil the "Galaxy Buds+" at the Unpacked event in February. The focus is on significantly improving battery and microphone functions while maintaining the design and basic features to address minor inconveniences. It is known that the "Active Noise Cancelling" feature, which removes external noise and is equipped in the AirPods Pro, will not be included.

Apple is expected to release a new "AirPods" series in the second half of 2020. The industry anticipates that the follow-up will be divided into two lines: AirPods and AirPods Pro.