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Is Apple Inc. (AAPL) Set for a Smartwatch Release?

Apple Inc. (NASDAQ:AAPL) is looking to patent its iWatch at a time when major tech leaders such as Samsung and Sony Corporation (ADR) (NYSE:SNE) seek to dominate the smartwatch market. But what does the race for smartwatch supremacy mean for these three firms? A new product launch can do a lot to not only increase the appeal of the product, but also ramp up the appeal of the company itself.

Apple Inc. (NASDAQ:AAPL)

Apple’s smartwatch is likely to arrive soon

Filing for the name patent indicates that Apple Inc. (NASDAQ:AAPL) is nearly ready to enter the smartwatch market, and that is something Sony Corporation (ADR) (NYSE:SNE) needs to watch out for. According to reports, the gadget is rumored to connect to the iPhone to receive messages and other content such as driving directions. An entry into the smartwatch market could be exactly what shareholders are waiting for, as they haven’t seen a major Apple Inc. (NASDAQ:AAPL) hardware release since the iPad.

When Apple Inc. (NASDAQ:AAPL) enters a market, it’s clear the firm intends to have the highest sales out of all the firms competing for dominance. A Bloomberg report states that Apple has 100 designers developing the smartwatch, so look for big things from this company. I expect plenty of growth from Apple Inc. (NASDAQ:AAPL) in regard to sales of all its products. The firm currently receives only 8% of its business in China, and expansion into emerging markets is an area that the company intends to focus on in the years ahead.

Sony already released a smartwatch

On July 1, Sony Corporation (ADR) (NYSE:SNE) announced the addition of its water-resistant SmartWatch 2 to the market. The device is a follow-up to the Sony SmartWatch that was released last year. The new watch is slated to be available throughout the world in September.

“Competitors are only now launching first-generation devices, while we are already launching a third generation device with all the insight gained from over half a million customers combined with Sony’s wealth of technology expertise… ” Stefan Persson, Sony’s head of Companion products, told Design & Trend. He added that analysts predict that 41 million smartwatches will be sold by 2016. The company has already tallied more than one million downloads on the Sony SmartWatch. With that many existing customers, there is already a user base for the firm’s new smartwatch products; this provides it with a foundation as the firm looks to attract additions for its loyal customer base. Sony looks poised be a leader in this field, much like it is in the gaming console arena with its PlayStation brand. So far, the company has an early lead in smartwatch market.

Samsung’s in the game

As the world’s largest manufacturer of smartphones, Samsung could also make a major dent in the smartwatch market. In March, the firm stated that it is working on developing a wristwatch that is similar to smartphones. The company seems to always be at least second in line, however, and adapts many of its ideas from Apple Inc. (NASDAQ:AAPL) releases — take the smartphone and the tablet, for example.

I wouldn’t expect Samsung to release a smartwatch before Apple, but the company’s executive vice-president said the firm has been working on a smartwatch for “so long.” While Samsung has experienced high sales for its Galaxy S4 smartphone, the $358 billion international handset market is nearing full saturation, according to Bloomberg. If Samsung can release the best smartwatch, it could take a large chunk of this relatively new market.

I wouldn’t count on Samsung being the leader, however. It should be noted, though, that Samsung has a slight advantage because it manufactures its own chips and displays. This could lower the company’s overhead and result in reduced prices for the watch, thus boosting sales.

Can smartwatches really make a dent in revenue?

A massive increase in revenue will follow whichever company dominates the smartwatch market. The gadget can complete the main tasks of a smartphone such as reading messages, viewing social media, taking photos, playing games, listening to music and using apps. The company that can release the coolest, most functional device will be a force to reckon with.

So far, Sony is the only company to lay claim to the smartwatch market. Only time will tell what Apple Inc. (NASDAQ:AAPL) and Samsung are capable of when they finally enter the market.

The article Is Apple Set for a Smartwatch Release? originally appeared on and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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