This article first appeared in The Edge Malaysia Weekly, on March 14 - 18, 2016.

ECS ICT Bhd, which kick-started its new wearable business by distributing smartwatches, is now waiting for a powerful application that will make wearable devices irresistible to consumers.

In January this year, the group secured the rights to distribute four smartwatches, namely the Apple Watch, Motorola Moto 360, Asus ZenWatch 2 and Huawei Watch.

Its CEO Soong Jan Hsung believes Malaysians are generally receptive to new wearable technologies. However, the absence of a killer app is a barrier to making the smartwatch as indispensable as a smartphone.

“The tech-savvy consumers are definitely ready. We are just waiting for a killer app for smartwatches, that particular app that will make it impossible to live without smartwatches,” he tells The Edge in an interview.

For instance, today’s consumer buys a smartphone just to run the essential apps, such as Facebook, WhatsApp and Uber, which are inevitably changing the lifestyle of users and the business landscape.

“I’m sure the smartwatches will have their killer apps soon and when they do, their sales can be as big as that of smartphones,” Soong says, adding that ECS ICT plans to sell a few thousand units a month.

It is learnt that the Apple Watch and Huawei Watch will be priced at RM1,999 each while the Motorola Moto 360 will cost RM1,599 and the Asus ZenWatch 2, RM799.

Although smartwatches have become more fashionable, most of them do not operate independently of the smartphones as their apps mainly originate in the phones.

To become popular, the next generation of smartwatches should have their own SIM-card slot so they can have an independent mobile connection, Soong points out.

Basically, smartwatches today allow users to check email and WhatsApp messages. Users can also check the latest sports scores and newest Facebook posts without having to reach for their phones in the pocket. Of course, there are also various health apps to keep track of the users’ calorie intake.

But according to Soong, these are far from being killer apps for smartwatches. He opines that the upcoming must-have apps for smartwatches should lighten the users’ daily tasks.

“In the US, you can use a smartwatch as a key to open your hotel room. It can also be used to open a car door or to start the engine. I thought these were apps that made sense,” he says.

“I wish I knew what the killer apps are, so I can develop them myself. Maybe I should spend more time thinking about killer apps than selling the smartwatches,” he says half in jest.

On a serious note, Soong acknowledges that it is more difficult to sell smartwatches than smartphones. Therefore, the profit margin from selling the former is “much better”.

“For smartphones, it’s more like a replacement market. When the pricing and timing are right, people will just buy, no questions asked. But for smartwatches, we are still at an early stage. So we require extra effort to convince people because most of them are still wondering what smartwatches are,” he says.

While Soong does not expect smartwatches to replace smartphones in the future, he warns that the rise of smartwatches could still hurt the sales of smartphones in the years to come.

“Before that happens, we have to get ready. We want to be the first mover in the wearable market. We want to make sure that once the market takes off, ECS ICT is already there to serve it,” he says.

Incorporated in 1985, ECS ICT has evolved from a personal computer dealer into an information and communications technology (ICT) distributor over the years. It recorded a revenue of RM2 million in its first year of operation but by its financial year ended Dec 31, 2015, this had leapt to RM1.9 billion. Meanwhile, its net profit hit an all-time high of RM32.5 million.

ECS ICT distributes notebooks, smartphones, tablets, printers, software and servers from more than 30 leading principals, including Hewlett-Packard, Lenovo, Asus, Dell, Oracle, Microsoft, Cisco, Apple, IBM and VMware.

It has a nationwide network of more than 5,000 resellers, comprising retailers, system integrators and corporate dealers.

Moving forward, Soong sees virtual reality (VR) as the next big thing in the wearable market and believes the possibilities are endless. “The wearable device market is our focus this year but wearables are not confined to smartwatches. Many other cool gadgets, such as VR goggles, gloves, glasses and headsets, are coming soon,” he says.

VR, which is also known as computer-simulated reality, replicates an environment that simulates a physical presence in places in the real or an imagined world.

Soong says thousands of VR apps are available in the Android space now, although most of the content at the moment is for education and entertainment purposes, such as virtual travelling and VR gaming. “You will be standing right in front of places you never thought you would see. Mars, the moon, you name it.”

VR will be commercialised once it can be used for training and simulation purposes in the industrial, military and medical fields. “One can also imagine property developers taking VR shots of sites, so that buyers can visit the houses without actually being there,” Soong explains.

Very soon, everyone will own a VR gadget because it is affordable, he concludes.

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