Will Google’s Android Wear Hit Apple Watch Frenzy?

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Google’s GOOGL recent update to its smartwatch software platform serves as a check on the hype surrounding the Apple AAPL Watch as well as a reminder of its own Android Wear.

What's Android Wear?

The Android Wear platform, launched in March last year, is an edition of Google's popular Android operating system (OS) designed for smartwatches and other wearables. It helps users to pair their wearables and smartphones, stay connected by delivering customized alerts from the smartphone and operate as a point of input for interaction with the apps. It is designed to be simple, detect touch gestures and depend on voice control.

Android Wear was launched to extend Google’s mobile OS to a new category of devices while lowering the costs for developers and users alike.

New Updates to Android Wear

Google adds three main new features — emoji support, Wi-Fi connection and always-on apps.

Android Wear brings on-screen drawing support that turns the user drawings into emoji text responses which can be sent quickly. The new Google watch will also support Wi-Fi so that users receive all the notifications, send messages and use the apps if the phone has a data connection but not with them at the moment. The always-on apps feature keeps the apps visible on the display screen as long as the user needs them.

These updates will be available in all the seven Android Wear watches over the next few weeks, LG’s Watch Urbane being the first model.

Additionally, Google Android watch has more than 24 hours of battery life as against Apple’s 2.5 to 4 hours.

The new updates along with Apple’s poor battery life could dent the initial sales figures.

Our Take

With the latest move, we expect Google to better compete Apple in the wearable market.

According to CCS Insight research firm, the global sales of wearable devices will accelerate in 2015, soaring 158% year over year to 75 million units. However, smartwatches will primarily drive the growth, contributing 44% of total sales by 2018. Hence, we believe that the nascent smartwatch market with a few well-established players presents a good growth opportunity for Google.

Google currently has a Zacks Rank #4 (Sell), while Apple carries a Zacks Rank #2 (Buy). Some stocks that have been performing well include Autobytel Inc. ABTL and PetMed Express, Inc. PETS. While Autobytel sports a Zacks Rank #1 (Strong Buy), PetMed has a Zacks Rank #2 (Buy).

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