Google's upcoming smartwatch will threaten Samsung, not Apple

Last week, Google announced the acquisition of San Francisco-based Fitbit for $2.1bn. The Fitbit acquisition follows Amazon's recent entrance into the wearables segment (i.e., Alexa "on the go" devices). Fitbit's technology will be supplemented by Google's $40m acquisition of Fossil's intellectual property and talent from earlier in the year. These acquisitions definitively set the stage for a 2020 Pixel smartwatch release powered by Google's Android-based Wear OS.

Android users need a flagship Wear OS smartwatch

Samsung had already established itself as the Android smartphone standard by the time Google's Pixel smartphone came around, hamstringing the potential for Google's success in the space. For wearables, however, Google will come in at the right time, hardware-wise, to capture Android wearable user share. A key reason for this is that Samsung's smartwatches use Samsung's Tizen OS (with Bixby) instead of Google's Android-based Wear OS (with Google Assistant), leading to less integration between Samsung's smartwatches and Android users' phones. Furthermore, although 50+ third-party smartwatches have launched with Google's Wear OS since 2011 (per Ovum's Wearable Devices Tracker), there still isn't a flagship Wear OS smartwatch for Android smartwatch users to rally behind. For example, Fossil, the player with the largest number of Wear OS devices by a huge margin, launches a variety of smartwatches that skew more towards fashion than flagship tech prowess across its brand portfolio (e.g., Diesel, Kate Spade, and Michael Kors) each year.

The lack of a flagship Wear OS device has led to Android smartwatch user-base fragmentation. As Apple still hasn't provided Android user support for the Apple Watch, Android wearable users choose Samsung's Tizen OS watches, third-party Wear OS watches (e.g., Fossil), or other third-party products (e.g., Fitbit). This fragmentation limits the potential of Android user smartwatch replacement cycles because there isn't as much centralized hype around third-party products. When Google's Pixel smartwatch eventually rolls out, many Android smartwatch users will leave their Samsung and third-party smartwatch camps and purchase Google's flagship smartwatch. This is mainly due to the device's Android-based integration potential as well as the Fitbit-Fossil foundation for the device.

Apple's wearable sales won't be threatened by a Pixel smartwatch because the Apple Watch isn't targeted at Android users. In fact, Apple Watch sales may even increase if a subset of the iPhone-owning portion of Fitbit's 25+ million users shift to the Apple Watch following the Google acquisition.

Further reading:

A post from earlier this year detailing how Google can differentiate its Pixel smartwatch: