Author(s): Raghu Gopal
The Moto 360 was one of the first Android Wear smartwatches to hit the market. Its circular design was sharp and "techy", yet stylish. If there was a watch to help spark mainstream interest in strapping a computer to a user's wrist, the Moto 360 had a fair chance at being it. Unfortunately for Lenovo, that hasn't happened.
The company recently confirmed that it has no plans to introduce any Motorola-branded smartwatches in the near future, even as Android Wear 2.0 becomes available. For now, Lenovo has hit the pause button on its wearables ambitions.
A possible major challenge for Lenovo was that in many cases smartwatch users are looking to match brands with the smartphone they own — users of iPhones are most likely to buy an Apple Watch, and Samsung Galaxy customers are most likely to buy a Samsung Gear watch. This pattern of brand-matching combined with relatively small smartwatch volumes mean that smartphone manufacturers without significant share, such as Lenovo, find it harder to nurture a market for their watches. Without a key differentiator, these brands find it challenging to entice other smartphone users with their smartwatches.
Furthermore, broader weakness in sales of full-touch smartwatches means the math wouldn't add up for a Moto smartwatch, so Lenovo has taken an objective view of its market position and decided to hit the pause button.
This breather for the company will allow it to concentrate on the smartphone market, which, though flattening, still offers significant volumes to some companies, most notably Apple. The Moto name, which Lenovo will use for a wide portfolio of its smartphones, still has some clout and a strong association with mobility.
The wearables market is still looking for its bearings. Lenovo could certainly re-enter the space in the future but its decision to exit for now comes as little surprise. As the Apple Watch continues to sell millions of units annually, Google needs to step up and make Android Wear 2.0 a more appealing offering to tempt companies such as Lenovo back into the smartwatch segment. Right now, full-touch smartwatches continue to risk being a solution looking for a problem.