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Software Impact on Wearable Device Market Outlook

Attractive design will always be important, but software development is now a leading factor in the ongoing adoption of wearable devices. Over 720,000 Android Wear devices shipped in 2014 out of a total of 4.6 million smart wearable bands, according to the latest worldwide market study by Canalys.

Motorola was the clear leader among Android Wear vendors. The LG round G Watch R performed significantly better than its original G Watch, while Asus and Sony entered the market with their own Android Wear devices.

Pebble meanwhile shipped a total of 1 million units from its 2013 launch through to the end of 2014. Continual software updates, more applications in its apps store and price cuts in the fall helped maintain strong sales in the second half of the year.

"Samsung has launched six devices in just 14 months, on different platforms and still leads the smart band market. But it has struggled to keep consumers engaged and must work hard to attract developers while it focuses on Tizen for its wearables." said Chris Jones, VP and principal analyst at Canalys.

Following a completely different strategy to other vendors, Xiaomi shipped over a million units of its Mi Band, the colorful and affordable basic band. This included one day of sales of over 103,000 units.

Even though the Mi Band is a lower-margin product than competing devices, Xiaomi entered the wearables market with a unique strategy, and its shipment volumes show how quickly a company can become a major force in a segment based solely on the size of the Chinese market.

Meanwhile, Fitbit remained the global leader in the basic wearable band market.

Canalys believes that all eyes are now on Apple, which will reveal further details about the Apple Watch prior to its release in April. It's anticipated that the product will dramatically grow the market for smart bands and wearables overall.

According to the Canalys assessment, Apple made the right decisions with its WatchKit software development kit to maximize battery life for the platform, and the Apple Watch is expected to offer superior energy efficiency.

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