Samsung Unveils Smart Ring as Apple Risks Falling Behind in Innovation & Relevance

Samsung Galaxy Ring

Apple popularized wearable tech and especially the health and fitness tracking segment with its smartwatches, which dominate sales. Wearables, Home and Accessories is its third largest segment, with revenues rising more than 10% y/y in the last quarter of 2023, in excess of $23 billion ^[1]. These were helped by the last Apple Watch 9 and the higher-end Ultra.

However, it now faces a new challenge, as is biggest mobile rival is entering a new market in which the Cupertino firm does not participate. Samsung unveiled the Galaxy Ring, expanding its health and fitness monitoring line-up. Although information around the product are limited at this point, sales are expected within the year. ^[2]

The South Korean electronics giant is looking to capitalize early on the proliferation of smart rings, where consumers already have some solid options like the Oura. DataHorizon Research valued the smart ring market at $147.1 million in 2022 and expects it to rise to nearly $1.5 billion by 2032. ^[3]

Apple Augmented Reality

It's not exactly that Apple stays on the wearable sidelines, watching competitors advance and innovate. It launched the Vision Pro earlier this year, its foray into augmented/reality headsets, a nascent market dominated by social media behemoth Meta Platforms. ^[4]

Most reviews point to an impressive technological achievement with unmatched pass-through, a key element of augmented reality. Apple's entry has the potential to lift the still niche market out of obscurity. After a decline in 2022 shipments, the International Data Corporation (IDC) estimates an 46.4% y/y jump in 2024. ^[5]

Apple Lack of Innovation

The Vision Pro appears to be far ahead than its competitors technologically and will likely boost Apple's patent portfolio, but it clearly still a gen1 product and its eye-watering 3,499 price tag is prohibitive of mass adoption. There are also inherent limitations to the use of such devices, as wearing heavy and bulky headsets is uncomfortable.

This device constitutes Apple's first new product in ten years and an effort to reposition itself as an innovator, but risks missing out on other trends, as rivals make strides on multiple fronts. Samsung's smart ring is the latest example, just after the South Korean giant unveiled AI-powered smartphones^[6], in a watershed moment.

Apple has been coy and risks missing out on the biggest technological development since the internet. Mr Cook recently said that Apple will share details on its AI work "later this year", but a late entry into the AI arena could lead to a significant handicap. ^[7]

Apple is also long-rumored to be working on an electric car, but no officials plans have been announced. Chinese smartphone maker Xiaomi however, is already there. The firm unveiled the SU7 electric sedan late-last year pushing for a highly connected future, with the Human x Car x Home Smart Ecosystem. ^[8]

Need for Growth Catalyst

Apple's comes from a good year, hitting new record highs but was outpaced by its Magnificent Seven peers and has lost its spot as the world's most valuable company. Microsoft surpassed it, helped by its lead on the AI front.

Apple lacks innovation and will likely need a new growth catalyst, to justify its valuation. Its revenues registered a mere 2% y/y increase in the last quarter of 2023. This was enough to stop the fourth consecutive quarters of declines and the worst streak in twenty-two year, but was far from an inspiring performance.

The tech giant does not seem to run its best period, but it rarely flops and is flush with cash, which allows it to compete in multiple fronts, even if it's not a disruptor. Furthermore, its main revenue generator, the iPhone, continues to perform well. Apple outperformed its smartphone rivals in 2023 according to Canalys and the smartphone market appears to have bottomed out. ^[9]