AT&T to Lead the Way with LG Smart Watch Debut - Analyst Blog

Leading telecom carrier AT&T Inc. T is set to add the LG G Watch to its array of smart devices. Although no specific details have been provided about the expected launch, it is should be available to customers within a span of few weeks.

A forerunner in many ways, AT&T will be the first among all U.S. carriers to launch this product.

According to the press release, LG G Watch connects to any smartphone with Android 4.3 or higher versions and also offers notifications and other information similar to a smartphone.

While the new addition remains accretive to customer addition, we believe it adds variety to AT&T's device line up, which mostly comprise smartphone and tablets, thus making it more competitive. The new smart watch will help AT&T fend competition arising from aggressive pricing plans of direct competitors such as Verizon Communications Inc. VZ and Sprint Corp. S for iPhones and other smartphones.

Further, at the smartphone end, the company is facing cost headwinds as price-sensitive customers are seeking low-end 2G feature phones. In addition, AT&T's loss of its exclusive hold on iPhone to Verizon adversely affected its revenues. While iPhones continue to deliver a strong growth momentum, high marketing and subsidy costs associated with the product is restricting earnings.

AT&T's new LG smart watch debut comes close on the heels of its announcement of being one of the leading U.S. operators to launch the Samsung Galaxy Tab S, complete with access to 4G LTE, as part of its portfolio of Samsung devices. The new tablet, which measures 6.6 mm, runs on Google Inc.'s GOOG Android 4.4 KitKat and features a Super AMOLED display. (read more: Samsung Galaxy Tab S to Debut on AT&T)

AT&T currently has a Zacks Rank #3 (Hold).