While a superficial analysis might paint a picture of the early market for smartwatches as one comprised of mainly professional, tech-leaning, early adopters who are, well, largely adult, I think there will be a very big opportunity for smartwatches targeted at the youth market.
Not convinced? Let me explain why.
The Spy Factor
Dick Tracy is overused in talking about smartwatches, but many people with kids will tell you spy gear toys have been hugely popular the last few years. Sure, that's partly due to the fact cool spy toys are really just low-cost monitoring devices that are cheap to manufacture nowadays, but this modern democratization of cool spy gear finally allows toy makers to truly tap into the time-tested and universal love all kids seem to have for "playing spy".
And really, what better way to play spy than with a cool connected watch?
The iPod Touch
My son has an iPod Touch. And if my kids, their friends, and my nieces and nephews are any indication of the broader market today in the US, I think tens of millions of kids probably also have iPod Touches.
And you know what? The iPod Touch will work pretty darn well with a Pebble or any number of forthcoming companion smartwatches.
The reason the iPod Touch is so popular - and pretty much any other hit toy - is due to what I call viral buying. Kids aren't like adults in that they almost all want what the other kid has, particularly when it comes to something like technology or toys. And once one has one, the next kid wants one, and soon all the kids want one, and soon the local Best Buy or Toys R Us are out of stock and Matt Lauer's doing a segment on the latest toy craze.
Low Threshold Purchase Price
While this is clearly a "first-world" analysis, I'd say that at $150 price point or below, a smartwatch is definitely is within reach with any kid and their babysitting or lawn-mowing money. It's also not an out-of-reach or overindulgent price for parents buying a gift for their children, particularly for those who have spent more money on things like game consoles or, well, iPod Touches.
So You've Convinced Me...But What's the Really Big Opportunity Here?
So maybe I convinced you that this could be a big opportunity. And it will be, I assure you. A Pebble or Galaxy Gear watch that comes in at a decent price point with flourishing apps and software ecosystem will certainly find significant traction in today's youth market.
But you know what I think is a potentially even bigger opportunity?
Smartwatches created specifically for the youth market.
Why? Because I think if kids want a smartwatch, why not create a smartwatch designed specifically for them?
So what characteristics should a youth-oriented smartwatch have? Here are a few suggestions:
While I think companion smartwatches will be a bigger market than stand-alone watches overall, I think a standalone youth smartwatch could be extremely popular. The reason is I think is it would open up the market for kids without a Touch or other companion device, and also could act as a kid's main communication device (Dick Tracy!).
Low-cost 3G/LTE connectivity
I know that adding more radios to a smartwatch will impact price and battery performance, but I think creating a smartwatch that gives kids the ability to receive messages from their parents - and even possibly send them - would be hugely valuable for both. And let's not kid ourselves - they'll want to send them to each other. Anyone who has a child with an iPod Touch knows kids like to send messages...alot.
I think the price of bandwidth can be mitigated by the simple reality that a small footprint device like a kid's smartwatch likely won't be use for things like video or huge bandwidth sucking apps. I also think an "Amazon Kindle-esque" model of subsidized bandwidth could be used with the device if it's tied to a revenue-generating app or content marketplace.
Speaking of apps...
Kids clearly love apps, as anyone who has a Angry Birds or Instagram loving child will tell you. While the app ecosystem for smartwatches is just getting started, a youth smartwatch could easily leverage existing app platforms such as Pebble, Android or iOS to make sure there are a number of kid-friendly apps across a number of categories.
Admittedly a camera on a watch will add to the price, but it sure would be a winner. Kids love taking and sharing pictures, and if they could use their watch as a camera, I can guarantee this will be a hugely popular feature.
It goes with out saying accessorizing a watch with different color bands, faceplates, etc will be important. The good news with smartwatches is "digital accessorizing" is possible with downloadable watchfaces, but I think that some actual physical accessorizing will also be important.
If you're not convinced there's an opportunity here, chances are you probably don't believe in the smartwatch category in general.
But if you do, I'd be surprised if you don't see a huge opportunity, and if that's the case I put the question to you: who will be the first company to take advantage of it?
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