The Ultimate Smartwatch Design Industry Guide 2024

Toward Profitable Brands and Fast Smartwatch Designs

In the dynamic world of smartwatch technology, innovation is paramount, but profitability can be challenging. This guide outlines key strategies for success, focusing on understanding consumer needs, leveraging advanced technology, and ensuring proper design decisions.
By navigating these decision steps, manufacturers can create smartwatch products that are not only functional but also financially rewarding, leading to the establishment of recognized brands and long-term profitability in the wearable product space.

Ready to Start Your Next Smartwatch Design?

Connect with our experts Robert or Semir today! Whether you’re just starting or ready for a deep dive, MicroEJ is your trusted partner for fast product launches and high returns. Let’s turn your vision into the next big thing!


Smartwatch Design Illustration

1 • Understand the Smartwatch Market and Establish Your Value Proposition

    First Decision: Define Your Value Proposition
    Second Decision: The Price × Feature × Quality Balance

2 • Make the Right Smartwatch Design Choices

    Premium Industrial Design
    Flexible and Independent Software
    Strategic Component Selection
    A Connected Wearable Ecosystem

3 • Legal and Financing

    Financing Your Product
    IP Protection and Litigation Risks

4 • Fast-Track Your Next Smartwatch Design and Ensure Commercial Success

5 • Start Your Journey!

1 • Understand the Smartwatch Market and Establish Your Value Proposition

The wearable market is dominated by Apple, which has established itself as the leading smartwatch maker. Close behind are Samsung and Huawei, offering similar high-performance watches.

This might lead you to believe that the “mobile phone on your wrist” type of smartwatch is the only option available. However, beyond this high featured kind of products, the smartwatch market is very diverse, with numerous types of watches catering to a wide audience, with diverse purposes and various budgets.


Global Smartwatch Market

Source: Counterpoint Research


First Decision: Define Your Value Proposition

The smartwatch market encompasses various subsegments, including performance enthusiasts, wellness seekers, healthcare users, fashion aficionados, kids, the elderly, gamers, and tech enthusiasts. To effectively target your main audience, further segmentation is essential to identify unique customer needs with a significant market size. For instance, fashion brands often cater to specific demographics and identities.


Smartwatch Market Segments


  1. Begin with the Intended Experience for Your Target Audience

Start by envisioning the desired experience for your target audience. How can you craft a smartwatch that seamlessly integrates into their daily routines, offering more than just technical specifications? Prioritize their needs and preferences, moving beyond hardware specifications like weight and feel, to ensure every aspect of the user experience resonates deeply with them.

  1. Understand Your User Technological Requirements

Next is to translate this experience into technological requirements: Which apps will they use frequently? How will it integrate with their smartphones and other smart devices? A smartwatch is not a regular watch and apps and digital interactions are integral to the product experience.

  1. Strike the Perfect Balance Between Battery Life and Design

Finding the delicate harmony between battery life and design is pivotal in smartwatch product development. While tech enthusiasts may tolerate daily charging, travelers or outdoor enthusiasts require extended battery life. However, enhancing battery life often entails larger, heavier batteries, potentially compromising the sleekness and comfort of the design. How will you meet the demands of your target audience while maintaining an aesthetically pleasing and functional smartwatch design?

  1. Define Your Unique Value Proposition

For example, if your target audience consists of fashion enthusiasts, refine your unique value proposition accordingly. Consider how your smartwatch can complement their style and identity. Will it offer customizable watch faces or interchangeable straps to match different outfits? By aligning the features and design with the preferences of fashion-forward consumers, you can create a more appealing product.


Smartwatch Market Study Unique Value proposition


Unique Value Proposition Canva for a Fashion Smartwatch – source: MicroEJ


Once you’ve defined your target audience and the desired user experience, you can make informed decisions about pricing, features, and quality. Prioritize the unique value proposition that resonates with your audience to differentiate your product in the competitive smartwatch market and attract loyal customers.


Second Decision: The Price × Feature × Quality Balance

  1. Optimize Your Price Strategy

The price point, representing what your target audience is willing to pay, significantly influences the features, materials, and overall investment in your product. This relationship between price and cost is particularly evident unless the product falls into the luxury category.

From a broader perspective, we can identify five distinct price bands in the USA, with variations in other countries:


Smartwatch Price Strategy


  1. Achieve the Perfect Blend of Quality and Features

Within the mid-price ranges (Mid-Low & Mid-High), striking the optimal balance between features and quality is crucial for commercial success. While the temptation to prioritize an extensive list of features is strong, it’s essential to avoid overpromising and underdelivering. Recognize that similar features can vary significantly in quality, and most customers prioritize products based on quality criteria such as sensor accuracy, durability, and third-party app support.

In establishing the quality benchmarks necessary to exceed your audience’s expectations, prioritize features where any compromise is simply non-negotiable. Simultaneously, discern the areas where standard or basic quality standards suffices to ensure a balanced and satisfactory smartwatch design.


Smartwatch Feature Strategy


  1. Prioritize Quality for Brand Success

Designing the optimal balance between features, price, and quality is crucial for ensuring long-term brand success and bolstering repurchase rates.

Brook Eaton, industry expert:Brook Eaton

“Many companies promise a great deal but ultimately deliver inferior products that fail to satisfy customers, leading to low usage and repurchase rates. My first objective when creating a new smartwatch product is to place the user at the forefront, and prioritize features they’ll love and use frequently and to deliver those features in an intuitive manner at high quality, even over cost-cutting measures. In the end, I want to ensure that the product fulfills all its promised features, at the right quality, and provide consumers with a truly satisfying user experience. It is about creating a loved experience.” 

Wearable OS

Discover VEE Wear

Leading design houses and ODM have chosen VEE Wear for their design. Access a complete chain of support, from design to tech and production, to create successful and trendsetting wearable products. to help you accelerate your time to revenue and maximize return on investment.

Download solution brief

2 • Make the Right Smartwatch Design Choices

Premium Industrial Design

Comfort and Wearability

Gone are the days when smartwatches were bulky tech pieces embraced solely by tech enthusiasts. With widespread adoption among the general population, it’s now imperative for smartwatches to emulate the appearance and functionality of high-end timepieces. This requires strategies like using thinner materials, consolidating functionalities within components, and avoiding bulky designs to reduce overall weight and size.


Display Technology

To elevate product appeal, companies ought to prioritize a sleek and premium aesthetic, integrating elements like a stainless-steel case and a high-resolution touchscreen display. Typically, opting for OLED displays, offering 10x better power efficiency and enhanced readability over LCD, enables features like an always-on screen, thereby enhancing the device’s visual impact and improving the user experience.


Durability and Resistance

For sustained customer satisfaction and repeat purchases, prioritize durability. Incorporating features like water and dust resistance, scratch-resistant glass, and ruggedized materials ensures the smartwatch can withstand daily wear and tear. This not only enhances reliability but also fosters consumer trust and loyalty.


Personalization Options

Boost the attractiveness of your smartwatch by offering customization options. From varying display sizes to interchangeable straps, empowering users to personalize their device fosters a deeper connection. By catering to individual tastes and styles, you amplify the overall attractiveness and desirability of the product.


Flexible and Independent Software

Prioritize Software Flexibility and Customizability

Smartwatch software plays a critical role in seamlessly integrating various functions, including connectivity options, workout features, and health feedback. To achieve this, the software must prioritize flexibility and customizability. Software components are essential for optimizing the hardware platform’s performance (speed vs. footprint) while also enabling efficient power utilization to prolong battery life.


The Crucial Importance of Wearable User Interfaces

Manufacturers must prioritize usability and accessibility in their interface designs. For instance, incorporating touch gestures like swiping enables effortless navigation, while voice commands offer hands-free control. Tailoring interfaces to the unique form factor and usage scenarios of smartwatches is crucial, including optimizing screen layouts and font sizes for readability, and implementing intuitive navigation patterns.

Additionally, achieving a balance between speed, graphic sharpness, footprint, and battery usage is essential. This balance can be improved through the use of ambient mode, which switches between a powerful processor for resource-intensive user interface requests and a low-power processor during sleep mode to ensure an always-on display while optimizing battery life.


Favor Portability to Leverage Software Component Re-Use

To foster the development of comprehensive smartwatch product lines, software portability and reuse are essential. By leveraging software assets, especially UI assets, manufacturers can drive innovation without reinventing the wheel. This approach not only promotes a coherent brand image but also significantly accelerates time-to-market, potentially reducing launch times by half when introducing new products.


Select the right operating system

Counterpoint research indicates that proprietary OS/RTOS dominates the wearable segment, with many lacking third-party app installation capabilities. Apple Watch OS accounts for 30% of the market share, while Android Wear OS holds around 10%. This fragmentation has historically differentiated low-power smartwatches from full-featured ones.

Android’s Wear OS leads in high-performance smartwatches, but Google has faced challenges supporting all manufacturers, resulting in product delays. In 2021, Google’s focus on re-onboarding Samsung diverted resources, leaving other brands, like Fossil, to postpone their Wear OS 3 integration. These challenges likely contributed to Fossil’s exit from the smartwatch market in 2024.

In response to market demands, MicroEJ developed VEE Wear, a smartwatch OS for mid-range and low-power devices. VEE Wear offers an extensive feature set while prioritizing cost efficiency and battery life. Built on a similar concept to Android, it has a small footprint and low-power optimizations, supporting a full app lifecycle. VEE Wear launched with alpha customers in 2022 and was publicly announced at the end of 2023. Like Android and Watch OS, VEE Wear enables app loading and ecosystem creation.

Low Power Smartwatch

Discover VEE Wear Software Solution

VEE Wear is the premier wearable operating system for low-power smartwatches, delivering high-end features on a minimal footprint to maximize battery life and minimize hardware demands.

Download solution brief

Strategic Component Selection

Avoiding the Pitfalls of Low-Cost Sourcing

While it may be tempting to opt for inexpensive components to cut costs, this often results in sacrificing quality and undermines the appeal of wearable devices. Choosing low-cost options can lead to performance issues, reliability concerns, and ultimately, unhappy customers. Prioritizing quality over short-term savings is crucial for ensuring the success and competitiveness of any smartwatch design. By investing in high-quality components, manufacturers can deliver reliable, durable, and functional products that meet consumer expectations, building trust and fostering long-term success.

Hai Nguyen – MIJO ConnectedHai Nguyen

“In recent years, the market has been flooded with low-cost smartwatches. Unfortunately, these budget devices often compromise the user experience with poor displays, unresponsiveness, and unreliable health tracking. While they may tick the basic feature boxes, they fail to deliver the quality that truly engages users. This can give smartwatches a bad reputation, especially among new users. It is crucial to find a balance between affordability and functionality to foster a positive image and ensure user satisfaction.

At Mijo Connected, we are dedicated to designing smartwatches and platforms that strike this balance. We extensively evaluate various chipsets, sensors, displays, and connectivity options, focusing on components like CPUs, GPUs, and sensors that offer the best tradeoff between cost, quality, and performance. For instance, our use of MicroEJ VEE Wear for our RTOS devices ensures a great user experience while remaining cost-effective.


Battery Optimization by Design

In a recent IDC survey, battery life emerges as the primary factor influencing customers’ brand-switching decisions. Historically, smartwatches have grappled with battery challenges, with users begrudgingly accepting daily or every-other-day charging as the norm.

While faster charging offers some relief, the ultimate goal is to achieve multiple days of usage on a single charge, presenting a compelling reason for consumers to switch brands.

To address this demand, wearable manufacturers must prioritize selecting hardware components and technologies that prioritize superior performance and capabilities, even if it means incurring slightly higher costs. This strategic approach ensures the development of high-quality smartwatches that not only attract customers but also foster brand loyalty and retention over time. By investing in battery optimization through thoughtful design, manufacturers can meet consumer expectations and differentiate themselves in a competitive market landscape.


High-Quality Health Sensors and Algorithms

Integrating advanced health and fitness tracking features greatly enhances the appeal of smartwatches. Sensors for monitoring heart rate, blood oxygen levels, sleep patterns, and activity metrics cater to health-conscious users, enriching the overall user experience with valuable insights. By prioritizing high-quality health sensors and algorithms, manufacturers can remain competitive and fulfill the ever-changing demands of consumers in the wearable technology industry. With advancements in miniaturization, these sensors can seamlessly blend into wearables, offering powerful functionality without being obtrusive to users.


A Connected Wearable Ecosystem

Software Innovation and Personalization Through App Ecosystems

Software significantly contributes to enhancing wearable devices by introducing innovative features and services through apps. Customization options, like the ability to personalize watch faces according to unique preferences, have become essential features for users. This is particularly important for tech-savvy and youthful users, such as millennials, who desire personalized experiences tailored to their preferences. According to McKinsey & Company, nearly one in five US consumers and one in three US millennials prefer personalized wearable products and services.

Interoperability with fitness apps, social media platforms, and productivity tools enriches the user experience by facilitating seamless data synchronization and enhanced functionality across different digital ecosystems. This interconnectedness not only promotes convenience but also encourages a holistic approach to personal wellness and productivity.


Enhancing Connectivity with Other Smart Devices

The Internet of Things (IoT) has expanded wearable capabilities by enabling seamless connectivity and data exchange. Smartwatches now sync with smartphones, smart home devices, and other IoT-enabled systems, creating a comprehensive connected ecosystem. For example, wearables transmit health data to healthcare providers, sync with home automation systems for personalized comfort, and interact with virtual assistants for hands-free control.

Most smartwatches need a “companion phone” to connect to cloud-based services. Providing a high-quality companion phone app that integrates seamlessly with the wearable is crucial. This integration ensures users can easily access and manage their wearable’s features, enhancing overall usability and convenience.

Integration with popular smart home platforms like Google Home or Amazon Alexa further enhances versatility, enabling users to control various aspects of their environment using voice commands.

3 • Legal and Financing

IP Protection and Litigation Risks

Dealing with patent trolls is an unfortunate reality for many wearable makers. These trolls aim to extract money from product companies using their portfolio of patents, regardless of the legitimacy of those patents. The threat they pose is real and significant, making preparation essential.

One effective approach is to utilize technology backed by a third party that offers protection in case of litigation. Licensing commercial solutions from reputable companies, such as MicroEJ, can provide added security. These companies have a track record of successfully deterring troll attacks. A good licensing partner should offer clear and straightforward contracts, eliminating the need for extensive legal review. Moreover, companies confident in their intellectual property should be able to obtain and provide insurance coverage, further safeguarding against potential litigation risks.

Financing Your Product

Smartwatch Price Strategy

Regardless of smartwatch design choices, there’s a cost associated with the device, and this cost decreases with volume, contrary to your price that is determined by the market segment you’re targeting and your customers’ willingness to pay. To visualize this relationship, you can create a graph with three key parameters: cost, price, and volume.

Your projected production volume and price point define if the product can be profitable. For volumes below 50K units per year, profitability hinges on having a unique value proposition that justifies commanding a higher price.
A volume exceeding of at least 100K units per year is generally necessary to produce a unique and original mid-range smartwatch design. Volumes between 50K and 100K units per year present a gray area where there may still be opportunities for distinctive positioning.

The implication is that any wearable product requires significant upfront financing. For example, a mid-range product costing $80 with a production volume of 100K units per year necessitates access to $8M, as all ODMs typically require payment upfront.

4 • Fast-Track Your Next Smartwatch Design and Ensure Commercial Success

VEE Wear, developed by MicroEJ, is set to redefine the landscape of wearable technology. With its low-power operation specifically tailored for wearables, VEE Wear offers a unique combination of extreme power efficiency and extensive customization options. From optimizing hardware choices to ensuring a seamless user experience, VEE Wear empowers manufacturers to create sophisticated yet cost-effective wearable products that stand out in the market.

Ready to embark on your wearable journey with VEE Wear? Dive into our solution brief to discover how VEE Wear can elevate your wearable product designs, maximize battery life, and offer unparalleled personalization options.

Contact MicroEJ

Start Your Journey!

We’re here to assist you every step of the way. Don’t hesitate to reach out with feedback or inquiries. Contact our VEE Wear team now!

Wishing you the utmost success with your wearable product!

Contact our VEE Wear team

Smartwatch Infographics

Fast Overview with Infographic

For a visual aid in decision-making, download our infographic decision tree summarizing key actions and choices.

Get infographic