CCS Insight Wearables Insight Huawei

Huawei's New Smartwatch Abandons Wear OS Summary On 16 October 2018, Huawei held a major event in London centred on the launch of its Mate 20 series smartphones. Here we examine the wearable devices also announced at the event. Insight ▪ At the launch event in London, Huawei revealed its latest flagship smartwatch, the Watch GT. It features the proprietary LiteOS operating system, rather than Google's Wear OS. ▪ Huawei also unveiled the Band 3 Pro as the company continues to focus on the fitness-tracking category of wearables. Analysis Huawei Watch GT During a launch event focussed on new Mate 20 series smartphones, Huawei unveiled its latest smartwatch, called the Watch GT (see Figure 1). It comes almost two years after the Huawei Watch 2 was launched in Barcelona (see Mobile World Congress 2017: Wearables). Most notable of the new watch's features was Huawei's decision against using Wear OS, which ran on its previous two generations of smartwatches. Figure 1. Huawei Watch GT Sport and Watch GT Classic Source: Huawei The Watch GT runs LiteOS, Huawei's own operating system for small connected devices. LiteOS is open source, and Huawei claims to be collaborating with its LiteOS partners to help build "a better ecosystem" for the Internet of things. LiteOS has been previously used by Huawei in its fitness watches and trackers. Powering the Watch GT is a custom chipset developed in-house and based on Arm's Cortex-M4 design. It contrasts with the Qualcomm Snapdragon processors found in previous Huawei smartwatches. The silicon features a "double chipset" architecture; a high-power processor performs computing-intensive tasks and a lesser one handles tasks such as the always-on display. Huawei emphasized the product's battery life, claiming up to two weeks of normal usage. It also claims that the watch offers 22 hours of continuous use with GPS tracking. However, we note that the long battery life comes at a price of a reduced functionality, which will limit its appeal to consumers. It is water-resistant for swimming and is compatible with iOS and Android smartphones through the Huawei Health app. The Huawei Watch GT Sport and Watch GT Classic will go on sale for €199 and €249 respectively. The development of the Watch GT is a setback to the ambitions of Qualcomm and Google in the smartwatch space with Huawei. Nevertheless, we do not completely rule out Huawei producing Wear OS smartwatches in the future, particularly if other Wear OS smartwatch makers see a substantial rise in sales at the end of 2018 and into 2019. Huawei Band 3 Pro Huawei also revealed a fitness tracker, the Band 3 Pro (see Figure 2). The biggest update over its predecessor, the Band 2 Pro, is a colour AMOLED touch screen. Huawei also claims to have overhauled its heart-rate sensor to offer more accurate readings. Other major features are similar to those of the Band 2 Pro: on-board GPS, water resistance to five atmospheres, sleep tracking and automatic detection of sports activity. Figure 2. Huawei Band 3 Pro Source: Huawei Huawei claims the Band 3 Pro has a 12-day battery life with continuous heart-rate and sleep tracking in addition to seven hours of GPS usage. It will be available in three colours later in 2018 for €99. Huawei's continued investment in this category underlines our belief that despite wearables companies' shift to smartwatches, the lifestyle fitness subcategory of the quantified-self device market, comprised mostly of fitness bands, remains significant. CCS Insight expects that 44 million of these devices will be sold in 2018, compared with 67 million smartwatches (see Market Forecast: Wearables, Worldwide, 2018-2022). Conclusions and Outlook Huawei is concentrating its efforts on health and fitness, which it believes is the most attractive use for smartwatches. However, findings from CCS Insight's latest user survey suggest that smartwatch owners employ a broad range of functions on their wearable devices, including managing phone calls, using social networks and making payments (see User Survey: Smartwatches, October 2018). Beyond fitness, Huawei's new Watch GT and Band 3 Pro offer limited experiences for most of these functions, particularly music: they lack a music app or internal storage for music files. Another shortcoming of these devices, especially the Watch GT, is the use of Huawei's proprietary LiteOS. Our research shows that consumers like to be able to install third-party apps on their smartwatches. Although it is possible for developers to create apps for LiteOS, we believe Huawei will face the same challenges Samsung has had with Tizen when it comes to persuading application developers to create — and update — apps for LiteOS devices. This could limit their appeal. This is particularly important given our belief that the number of essential smartwatch functions will continue to expand. We believe users will expect more of their devices in the future, as smartwatches become more popular and assume greater value in their owners' daily lives. Huawei has also undoubtedly been buoyed by the recent success of Fitbit's smartwatches, which also run on a proprietary operating system with limited support for third-party apps. However, outside China, Huawei's brand equity in the fitness market is virtually nonexistent. Making the Huawei Health platform attractive not only to consumers but also to software developers will be a huge hurdle to overcome. .

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