The real reason Samsung should worry about its smartwatch: Nobody wants to counterfeit it

Yet another indicator that the Samsung Gear is flopping.
Yet another indicator that the Samsung Gear is flopping.
Image: Reuters/Fabrizio Bensch
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Chinese tech counterfeiters couldn’t care less about Samsung’s smartwatch, CNN reports—and that’s bad news. In addition to making electrical components indistinguishable from the ones being ripped off, Chinese counterfeiters are also known for having a lot of savvy when it comes to spotting what’s in demand.

For example, major Apple piggybacker Goophone actually released its “i5S” months before the real version came out, and the company already has an “iWatch” on the market as well, which isn’t even the only fake available. Of course, Apple attracts a fair share of the trouble from Chinese counterfeiters, but Samsung gets attention in some areas. A few months back, Goophone released an obvious knockoff of the Galaxy Note III (link in French). So why isn’t there enough demand to warrant a fake Samsung Gear?

“I’ve never seen a knock-off Gear in this whole town,” a young woman selling Samsung products in Shenzhen’s Huaqiangbei commercial district told CNN reporters. And while her shop is one of a few that sells the actual Samsung Gear, “they don’t sell well.” Other retailers interviewed said the same: The ones that carry the smart watch see weak sales, and many have stopped carrying it. That weak demand—which might have something to do with the fact that the Gear, in addition to being lackluster, is only compatible with Samsung phones—has kept counterfeiters at bay. That’s a warning that Samsung should heed.

“Piracy is all about benefitting from buzz,” Alf Rehn, who studies global piracy phenomena, told CNN. “Create something good enough that looks like the real deal, and make money off those who are not willing or able to pay for the authentic item but who still want to be ‘with it.’ Without the buzz, there’s no need for the counterfeit.”

This doesn’t necessarily spell doom for the device. It could just be that only a niche market of early-adopting gadget enthusiasts are interested in the Gear, and demand will eventually increase. But Rehn says the company should pay attention, as “the Shenzhen crowd is the bellwether for electronics consumption.”

In November, Samsung responded to poor reviews of the device with a surprising report of 800,000 Gears being sold. As it turns out, the company meant that 800,000 devices had been shipped to retailers. There’s no way of knowing how many devices remain on the shelves, unsold to consumers. Meanwhile, advertisements for the Gear have ranged from tone-deaf and offensively elitist to…just really, really weird. The company could still turn it around for US markets, but in the lightning speed world of Chinese counterfeiting, the Gear may have missed its shot.