What Apple Watch Isn’t
Alright. It’s been 15 days since Apple announced Apple Watch; what most have viewed as Apple’s entrant into the “smartwatch” segment. But has Apple really done that? I don’t think so. Apple doesn’t make a product where the product category isn’t broken. Look at personal computers. That category didn’t even exist. Apple gave us the Apple II (and then the Mac). Look at portable computers. Apple gave us the PowerBook. Look at PDAs. Apple gave us the Newton. Ok, maybe that was a bad example. Look at portable music players. Apple gave us the iPod. Look at “smartphones”. Apple gave us the iPhone. Look at netbooks. Apple gave us the iPad. Can you even find a netbook for sale these days? Exactly. Apple doesn’t just move into a product category where there is no problem. The wearable market, which includes “smartwatches”, isn’t entirely broken. You have traditional watches, digital sport bands, and now “smartwatches”. So let me address each separately.
This product category won’t be going anywhere for obvious reasons. Low and high tier watches need not worry about Apple Watch. They address a segment of consumers who can’t afford Apple Watch or who appreciate the prestige and build quality of a luxury watch. The danger that Apple Watch poses is that it will eat away at the mid tier which is the bulk of where consumer spend is. It is in this segment that Apple Watch will actually fit.
Digital Sport Bands:
Devices like Nike’s FuelBand (which has been discontinued) and Fitbit on serve a niche market. If you aren’t tracking steps or calories, they really won’t serve a purpose to you. I know people who wear them daily and they do double as a watch, but they’ll never replace traditional watches in fit or finish. Apple Watch, with its health-tracking features, will place a stake at the heart of this category.
My favorite category. This is the Jack Of All Trades category of wearables. Place tons of features in a device even if those features don’t work exceptionally well. Google, Motorola, and Samsung were “first” to this party but they haven’t solved anything. There was no problem that needed to be solved here. But they get to say that they entered the space before Apple. But Apple isn’t making a “smartwatch”.
I know. That last sentence may not make sense to most of you. But just look at the name of the product. Everyone thought that it would be called “iWatch”. Instead, Apple announced Apple Watch. Why no lowercase i? Personally, I believe the lowercase i would have given Apple Watch a different perspective. If you take a look at Apple’s website, it doesn’t use the word “smartwatch” at all. The word wasn’t even mentioned in the September 9 announcement. Don’t you find that kind of odd? I don’t. Apple isn’t making a “smartwatch”. It’s making a watch that has more functionality than traditional watches. Apple could have made some futuristic band that would have differentiated itself from rivals Google and Samsung. Motorola, for its credit, has actually made a good “smartwatch”. I’m actually not comfortable with calling theirs that because I think that their product is more in line with what Apple is attempting to do in the watch space.
Yes, Apple Watch has tons of features. Most of which we don’t yet know. But what Apple is banking on is that you love the design and personalization of Apple Watch so much, that you will put down your Movado and wear Apple Watch exclusively. Have you noticed the quality of the bands for Apple Watch? How about their prominence in Apple showcasing the device? Apple wants you to fall in love with it as a watch first, and then it’s function second. If you wanted something on your wrist with lots of function, then Google and Samsung have better products. But their products are ugly; from physical design and user interface. And you can’t really customize them. Their products are just boring. And make no mistake on the hiring of Angela Ahrendts, former Burberry CEO, as SVP Retail and Online Stores and Paul Deneve, former Yves Saint Laurent, as VP working on “special projects”, reporting directly to Tim Cook. Apple Watch is going to be a fashion/lifestyle product and these two giants in the fashion industry will be key to its success.
But here’s my last point as to why Apple hasn’t made a “smartwatch”. The price. Apple only announced a starting price of $349. And we all know that is going to be for Apple Watch Sport which is made of cheaper aluminum and glass. You want the stainless steel Apple Watch or the gold Apple Watch Edition? Be prepared to pay considerably more. Reports that I’ve read say that the stainless steel version is considerably heavier than the aluminum and the gold is considerably heavier than the stainless steel. That leads me to believe that it isn’t just a finish. The housing for these versions of Apple Watch are likely entirely made of these materials. That then increases the build cost. Gold is valuable. No matter what it’s shaped into. And that gold has a price. Don’t be surprised when Apple Watch Edition retails for over $1,000. Personally, I believe it could be in the $2,000-5,000 range. I know. That’s steep. But I really don’t think Apple is making a product in Apple Watch Edition that is meant to sell to the masses. I could be wrong. But I don’t think I am.
At the end of the day, I expect Apple Watch to sell very well. It will definitely freeze sales of rival products, which is why it was a good idea for Apple to announce it so early. My only concern is that customers won’t buy an expensive, electronic, watch. There’s also different buying behavior when it comes to watches. Most people don’t buy a new watch every year. I haven’t bought a watch since 2006. I actually hate having something on my wrist. While I want to say that I will go out and get Apple Watch gen one, it’s functionality and battery life will be key for me. Also, we know the product will get better over time. So maybe I’ll hold off for gen two. What I am clear about, is that I’ll be buying Apple Watch first because I like it as a watch.