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A look at Motorola’s new Moto 360 smartwatch.

Peter Nowak/The Globe and Mail

There's a reason why a smartwatch – the Moto 360 – is leading a slate of new products from Motorola. It's the gadget with the biggest upside.

"The potential market is huge, but the products so far haven't met people's expectations," said Rick Osterloh, president of Motorola Mobility, in an interview. "But it's something that will really appeal to people who may have abandoned the watch category in the past few years."

The Moto 360, announced Friday, could be the most stylish smartwatch yet. Its round face differs from many of its square-shaped competitors and its leather and stainless steel bands give it more of a traditional timepiece feel. Perhaps most importantly, it's not overly big and ugly, like many have been so far.

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The company designed it from the ground up to look and feel like a real watch, rather than as a piece of technology. The 360 also performs all the functions that have come to be standard in smart watches – it displays notifications from the Android phone it's linked to, such as email and text messages, takes voice commands, and tracks steps and heart rate.

"This is at least as much a piece of jewelry as something that's useful," Mr. Osterloh said. "I don't know if anyone can predict what percentage of people that will [appeal to], but I'm confident it'll be substantial."

The smartwatch market is indeed getting crowded, with rivals Samsung, Sony and several smaller independents such as Pebble fielding competitors. Apple is also expected to enter the field next week when it announces new products.

The competition is fuelling expectations of an explosion in so-called wearables, with some analysts predicting the smartwatch market alone will grow by triple figures over the next few years from about $2.5-billion (U.S.) this year.

Motorola's entry is launching around the world this fall including Canada at a suggested price of $279 (Canadian) alongside two new smartphones, the higher-end Moto X and the budget-conscious Moto G, also announced by the Chicago-based company Friday.

Both phones are upgraded versions of their similarly named forebears, with the Moto X to be available exclusively through Telus in Canada and the Moto G to be sold unlocked by major retailers.

The Moto X will be priced "very aggressively," while the Moto G will sell for about the same off-contract price tag – around $200 to $220 – as its predecessor. Motorola says the first Moto G has become its most successful smartphone yet thanks to its low price tag, which has made it popular not just in advanced countries such as Canada but also in developing markets such as India and Brazil.

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Unlike smartwatches, smartphone sales are slowing in many developed countries. Manufacturers are increasingly facing the growing threat of commoditization, much like what PCs have experienced for much of the past decade.

"Only two [companies] are making money," Mr. Osterloh said, referring to Apple and Samsung. "But there is going to be major price competition for the forseeable future. The days of $600, $700 smartphone continuing to grow are numbered."

Rounding out Motorola's new product lineup is the Moto Hint, a much smaller Bluetooth headset accessory that fits right into the ear. The device isn't just for taking calls, though – like the Moto X, it is perpetually listening for the user's commands.

Once activated, the Hint can relay audio from its parent phone directly into its wearer's ear. The user could be riding a bicycle, for example, and ask the Hint to lay out turn-by-turn directions – the device connects to the phone's maps app, then relays the necessary information. Or, the Hint can read out text messages and e-mails.

The company hasn't yet announced availability or a price, but Mr. Osterloh believes the device, like the smartwatch, has a big upside.

"We think it can rejuvenate the Bluetooth headset category."

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Motorola Mobility itself is hoping for some upside as it transitions ownership from Google to Lenovo, likely by the end of the year. Google, which bought the mobile division from its larger parent Motorola in 2011, announced earlier this year that it was in turn selling to the Chinese company.

Google wasn't set up to be a hardware company and its ownership of Motorola put it in a tough position with other Android phone makers such as Samsung and Sony, Mr. Osterloh said. The short-lived stewardship and Google's deep pockets helped the company bounce back from the brink, but the long-term future was murky at best.

"We weren't able to get any synergies being part of Google," he said. "We got zero special access to Android. It was a better solution for Motorola to become part of a hardware company."

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