December 14, 2019

The Apple watch needs to be cool — More than it needs to make money

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Apple-Watch1By Timothy Stenovec From Huffington Post

CUPERTINO, CALIF. — Apple needs you to think its new Watch is cool. But it doesn’t actually need you to buy one.

The tech giant spent years developing , the wrist-worn computer that it announced to big applause in a packed auditorium here today.

If Apple Watch isn’t a hit, it will hardly doom the company. But that’s not what CEO Tim Cook is worried about.

Apple is a company made up of hardware hits. The iPod, iPad and, most notably, the iPhone — which alone has been responsible for over 50 percent of Apple’s revenue in recent quarters — have all been huge money-makers. But none of those were Cook’s products — they were all legendary Apple founder ’s babies. Sure, Cook has overseen the newest versions, but the new devices since he’s been CEO have been iterations of older ones.

Apple Watch is different. It’s all Cook’s. The company even dropped its signature “i” from the product — a naming device straight out of Jobs’ playbook. The gadget isn’t an iWatch, it’s a Watch.

As Tim Bajarin, a technology analyst for Creative Strategies, a research and analysis firm, told The New York Times last week, “The design of this product is all Tim’s fingerprints.”

This is Cook’s chance to prove that Apple can still innovate, even without Steve Jobs.

But even if Cook wants you to go crazy for the new watch, Apple as a company doesn’t actually need to sell many of them. That’s because so many people buy the new models of the iPhone, the most popular smartphone in the world. And the iPhones announced today — one with a 4.7-inch screen, and one with a 5.5-inch screen — will be the most popular ever. (The current iPhone 5S has a 4-inch screen.)

“The iPhone will now definitely have its largest quarter ever in Q4 this year, and its biggest year,” Jan Dawson, an independent telecom analyst, wrote in a note to reporters after Apple’s event. “It will significantly move the needle on shipments, and will further dent Samsung’s shipments in the coming months.”

Perhaps that’s why Apple stock, which hit record highs recently, didn’t even dip significantly when Cook said that Apple Watch won’t be available until after Christmas, missing out on the most important shopping season of the year.

Apple Watch isn’t a sure hit. It’s expensive, starting at $350, and you need an iPhone 5 or later to use it. And Apple needs to convince us that it’s something that will actually make our lives better. No easy feat, to be sure. Plenty of journalists and commentators weren’t convinced after watching the unveiling today.

For more on this story and video go to: http://www.huffingtonpost.com/2014/09/09/apple-watch_n_5792904.html

Related:

Enter the iFlop, what will be seen as first Apple failure after Steve Jobs – but the first edition Apple Watch will of course sell massively to iSheep\By

By Baron95 From Communities Dominate Brands

Today we finally had the launch of new iProducts, the two new iPhone models and the Apple Watch (aka iWatch). This blog talks about the more relevant Apple move. Not the significant upgrade to its popular iPhone line (I will discuss those in a later blog posting). This is about the other new iThing, the Apple Watch. What will eventually be known rather as the iFlop.

Mobile phone watches, aka ‘Dick Tracy’ style watches with phones in them and then even videophones, have been around for more than a decade. They pop up as newsworthy geeky items every few years usually from Japan. And they have rapidly died in the market place. Regular wristwatch sales have peaked in the past decade and are in gradual annual decline as more and more of us quit wearing wristwatches altogether, because we have a perfect time-keeper device in our pocket, the mobile phone (nowadays obviously for most of us, a smartphone). The O2 All About You study of UK consumers in 2012 found that 54% had quit using a wristwatch already because their time was now kept on their phones. The watchmakers say that its far easier to sell a sixth watch to someone who already owns five, than convince someone without a watch to buy their first. That is part of the world that our brave iEngineers enter today with the iToy.

Before you read any further, just a very quick background. Yes, I’m the author of 12 books to the mobile industry including the mobile industry’s first proper business book (how this industry makes its money). Not just geeky techie books, also proper business books. I am quoted in more than 140 books written by my peers. Very few authors still alive today have that much endorsement of their works by their colleagues. I was rated the most influential mobile expert in the world by Forbes. Thats me.

And do I love or hate Apple? I love Apple. I was a Macintosh trainer early in my career back when working for New York City’s first Internet Service Provider, a PC networking company called OCS. When the iPhone was announced and before it started to sell, I was one of the few who predicted accurately that in its first full year, yes the iPhone would hit 10 million sales but not much above that. There were many experts of the handset industry back then who said the 10 million mark was impossible to achieve, it would be a world record for a new phone brand. And there were some Apple-fanatics who felt 10 million was too low and Apple would do much more than that. I correctly predicted the 10 million mark, before the first iPhone was sold.

That is not particularly impressive as it was Steve Jobs’s announced target number at the time. So my ‘prediction’ was more about could Steve Jobs accurately forecast his first year sales than what the market would really be. The truly astonishing forecast by me, was the accurate geographic split of where those first 10 million iPhones would be sold. Nobody else gave a geographic split of iPhone sales before any were even shipped to stores. And I was dead-on with that forecast.

I am the most accurate forecaster of the mobile industry, have been for more than a decade, forecasting perfectly for example the downfall of Nokia and the rapid rise of Samsung. And back to Apple, I predicted accurately that Apple had to launch an ‘iPod Phone’ to respond to musicphone sales eating into iPod sales. Apple fanatics vilified me on this blog for daring to suggest that some musicphones could ever challenge the mighty iPod but we later learned from Apple’s Oppenheimer that exactly at the time when I was writing that on this blog, indeed Apple came to the same conclusion and their answer was then the first edition of the iPhone. I was correct that the iPad would not hold market share dominance in tablets, and that tablets would become bigger sellers than laptop PCs and yet, that tablets would not eat into smartphone sales. As we now see, tablet sales are stalling while smartphone sales at far higher levels are still growing strongly. And one last Apple related forecast, I said from the start that the smartphone apps business was a fool’s errand, that excepting for games, it will be a barren desert where almost nobody makes money. We see now, six years after the iPhone App Store was launched, that yes, 96% of all app developers do not break even. There are a few Angry Birds making the millions but the vast majority of smartphone app developers are poor beggars. I do know my industry and especially how it makes its money.

 

That’s me. I am an expert on ‘mobile’ but I am not an expert on the ‘watches and clocks’ industry and I am definitely not an expert on sporting goods and monitoring businesses. Bear that in mind. But yes, we’ve seen this movie before. The iFlop, sorry, the iWatch aka Apple Watch is a rerun. This movie has been done many times and it always has the same sad ending.

NO COMPETITIVE ADVANTAGE

So lets start with the status quo and the competition. So lets do a bit of math here to map out the market potential. The OECD calculates that 2 Billion people are ‘middle class’ worldwide. Note that the OECD definition of middle class is not what we have in Europe or the USA, their definition for the planet goes far below our poverty level, so in poor countries even an annual income of just 2,600 dollars (10 dollars per day, adjusted for PPP ie Purchasing Power Parity) qualifies for middle class in those societies. And the cut-off at the top is 30,000 dollars in annual income. All who earn more than that are classified by the OECD as wealthy. Congratulations dear reader. You might not have known it, but you too are wealthy. We wealthy are only 2% of the planet’s population. So thats another 144 million of us. In total the potential market for a gadget like the iWatch is thus at most, 2.14 Billion people. Half of those who once wore a wristwatch have stopped doing so, so the total user base of wristwatch customers is far less than 1 Billion.

The total global population who can afford buying a smart watch already has a mobile phone and for all practical purposes they all now have a smartphone already (the world installed base of smartphones is already 1.8 Billion. It will be well past 2 Billion by year-end). That smartphone ownership skews very strongly by affluence, in any country, the richest get smartphones before the poorest, so out of the 2.14 Billion middle class or wealthy humans, its the very lowest end, those earning about 10 or 11 dollars per day, who today still have a featurephone rather than smartphone. Those will not be buying any smart watch before they have upgraded their basic phone to a smartphone. So that is the market. That is the direct competition for the Apple Watch. Only half of us have a wristwatch to compare to, but almost all of us have a smartphone already.

That in turn brings us to the decisive factor today in mobile phones. Screen size. Hello? Phablets. iPhone 6 proves it beyond any doubt. That pixel density (sharper screen) is trumped by larger screen size, else Apple would not have gone from the 4 inch screen size to the bigger screens announced today. We just heard yesterday from Kantar numbers out of China (world’s largest smartphone market) that 40% of all new smartphones sold in Q2 of 2014 were phablets (screen size 5 inch or larger). I explained on this blog a while back why screen size is the trump card, the overriding factor (and why Apple would have to release larger-screen iPhones. Incidentially many Apple fanatics were here arguing against me, some claiming Apple would never bother to copy Samsung’s lead in large-screen smartphones as first seen in the Galaxy Note).

Which brings us to the iFlop. The Apple Watch has a smaller screen than almost any premium smartphones sold today. But we all carry a smartphone and most who are rich enough to afford a ‘second’ gadget, will tend to have a recent premium smartphone, like an iPhone or Galaxy or Xperia etc. And that is in our pocket always. We take it to the toilet with us, we take it to bed with us, we wake up looking at that screen first thing in the morning as every consumer survey globally has said now for years. And the smartphones has a far larger screen. So the videos look better. The pictures look better. The websites are easier to view – and to manipulate with touch-screen. The virtual keyboard is far easier on a larger phablet screen than on a tiny touch-screen. The majority of the time we use on the smartphone is related to viewing content, viewing videos, reading Tweets, watching pictures posted by friends on Facebook, playing Angry Birds, etc. Screen size trumps everything else. And the Apple Watch brings to the game the smallest iScreen that ever existed. Even smaller than the original iPhone from 2007. This is not a compelling offering.

I don’t mean that it’s impossible and yes, a smaller screen on a phone outsells the larger screens of televisions or PCs. But these are direct competitors for our time, our money and our attention. So in our pocket, glorious 6 inch screen. Then what of that bulky iToy for the wrist with the clumsy small screen. It is not a compelling offering. Some will like it, some will appreciate its benefits, in health monitoring or fitness or whatnot but most of us have a better screen in our pocket already. Now the iWatch screen is losing the game on the most important criterion. Its like going back from the current phablet to an old Blackberry, remember those tiny screens? This is not a compelling offering to regular consumers who are flocking to smartphones and will then take a look at smart watches in the store as well. They will not be impressed.

Do you want to have an alert when you have an SMS text message arrive, or a Twitter update or a call arriving or whatever? Yeah ok, thats nice. But as we have our smartphone already, and it has something called ‘ringing’ and something else called ‘vibration’ – for most of us we can hear the notification and feel it in our pocket. We don’t need to pay an iTax on a new gadget to get a parallel notification also onto our wrist.

That is before we think of the usability of the device. It is big and clumsy on the wrist. The device is strapped to our wrist and that is VERY clumsy in regular use. Imagine twisting your arm always to get the ‘right angle’ to view a video or website or read a posting or message. That is carpal tunnel pains very rapidly. Your wrist will be aching from all the twisting you have to do. Then there is the cumbersome double-handed operation. A phone can be rather easily operated on many functions single-handed. The smart watch will mostly need two-handed operation. This is again a step back in tech evolution.

Zahid Ghadiali of Explano Tech has expanded on my earlier theory explaining the distinctions between personal computers, tablet PCs and smartphones, that I called 30 minute / 3 minute / 30 second tasks. Zahid added the 3 second task to the list, to show where smart watches sit in this spectrum. Consider his table and think where is the big market and where is it not. The smart watch, no matter who makes it, does not create a huge opportunity on this table:

30min3sec

Yes, there will be some market. Yes, a smart watch has some utility. But it is utterly crushed by what a smartphone can do, and we already own those smartphones and are addicted to them. The smart watch has no chance of replacing the smartphone (and the Apple Watch doesn’t work without the iPhone connectivity on most phone features). That means it is an expensive accessory. And one that is mostly useless for most users, unless yes, you are a health-nut perhaps and still want the iBranding on your iWrist.

Wristwatches today are sold mostly as jewelry more than to tell time. All wristwatch owners (and I mean more than 99.9% of them, allowing for the rare eccentric) have a mobile phone, which of course tells time. The phone has far more utility than the typical wristwatch from alarms to multiple time zones to bright large lit digits, to calendar sycn to perfect time-keeping from network time that adjusts for daylight savings time etc etc etc etc. The wristwatch is ‘bling’. It is decoration. It is jewelry. And that is where the iWatch falls just in the hopeless midfield of no opporunity. It is not cheap ‘costume jewelry’ of a gold-color Timex costing 25 dollars. And its not a Rolex real bling costing 10,000 dollars. It is not real jewelry but its ridiculously expensive for not being genuine gold or platinum on your wrist. If you get the 18K gold version haha, then that market is about as huge as the Vertu. Yeah, hardly that either a mass market.

It tries to be a fashion item but its inherently nerdy and blatantly obvious. It may be ‘cool’ and desirable for a few weeks for the geeks, especially yes the iToy but a year down the line, it identifies you as a fool and many will feel ashamed to show up with that hideous thing on their wrists. The fashion watch industry will release new cheap models every few months. Apple struggles to do one update to the iPhone per year (vs Sony who does two Xperia Z flagships per year). The iToy will be out of fashion in a flash of an eye. And because Apple will make its iWatch distinctively Apple-ish it will also then stand out like a sore thumb when the hype stage has passed.

Then the iPhone connection. Why? The Apple Watch needs an iPhone even to work. Why? So now the market ceiling is not potentially the 2.14 Billion middle class or affluent humans. The market ceiling is now only current iPhone owners which is 359 million iPhone users. In fact less than that, in that it only works with 5 and 6 series iPhones. So lets call it 200 million maximum addressable market by year-end. This device could have been used to find new customers for Apple. Now it is only an iPhone accessory. Yeah. Call it an iTax. A very steep 350 dollar (unsubsidised) price gadget. Rival smartphones cost far less and do most of the same. That means if you want the functionality for some reason (even after all the failed attempts) you can get far more choice and lower prices for you smart wrist. So among those who might want this kind of functionality, this is a very expensive option, while still not being honest real bling of rich people like a Rolex, Tag Heuer or Omega (who often have top-end iPhones and won’t swap their luxury watch for this iToy)

And note, you NEED the iPhone to be with you, for this thing to even have any utility for you. It does NOT allow you to leave your smartphone at home. No SIM card… so Apple concedes the battle immediately that every TIME you strap this thing on your wrist you also must carry the phone in you pocket. At least most rival smartphones can be used as the ‘only’ device and theorietically leave the phone at home if you go say dancing on a weekend and don’t want the bulky big-screen smartphone with you. This device is dependent on the iPhone. So it is even a lesser offering than many rival smart watches.

Then yeah, you have to recharge it all the time. Many of those who still wear a wristwatch (and can afford a smartphone) have long since stopped worrying about the watch stopping to run. The Apple Watch will stop telling time when the battery runs out… and thats in days not years. Lovely inconvenient device.

This is no revolutionary device like the iPhone was or the iPod was. This is a me-too device that is perhaps a bit better than the rivals and yes, its iCool if you like that. It won’t be a commercial mass-market success, its reach is limited to only a fraction of existing iPhone users, ie by definition a niche market. Out of those, its a very expensive accessory which serves no real purpose apart from the health parts, and that is a very tiny slice of iPhone users who will bother with that expense, in particular as far cheaper and less intrusive wrist-based health solutions already exist.

I understand that Apple spent a lot of time designing this thing. They have so much invested effort in it, they might just as well take this abusive tax on loyal iPhone users, to buy another iGadget. This one will not last long on those wrists. Some users will find it very useful. They will wear them proudly and buy the next edition. Most who buy the first Apple Watch will tire of it just like they’ve tired of all past watch form-factor digital gadgets, however smart or not. This is not a mass market. The first edition will sell well because iSheep. Many will buy the first edition thinking there is some investment value. But most who wear this thing in the coming months will not wear it a year from now. And they won’t buy another Apple Watch 2.0 nor a rival smart watch. Most who buy the first edition will be disappointed, find it mostly redundant and useless weight on the wrist. Thus the first edition will have good sales and the Apple investors will love the new sales. The next editions will be seen increasingly as flops and Apple will discontinue this product after a couple of editions. This is their rare iFlop. Sorry. Won’t hit anything near iPhone or iPad level sales. And won’t achieve return business in subsequent editions.

Incidentially, the hype around smart watches will now help Galaxy Gear and other smart watches for a little while and those cute and clever Apple-ish wrist-apps will be rapidly copied into the Android world.

That is what I think of the iFlop. Sorry Apple, I so hoped you would surprise us and wow us and somehow prove you can reinvent this form factor. You failed. This will be similar to how the Newton fared, a technically brilliant product but one that never found lasting business and market that was eventually killed.

As a side note, when the iFlop numbers are reported about a year from now and the new editions won’t match the past sales, this will be seen as a danger sign for Apple that the Steve Jobs magic is gone and this will be seen as Tim Cook’s blunder.

For more on this story go to: http://communities-dominate.blogs.com/brands/2014/09/enter-the-iflop-what-will-be-seen-as-first-apple-failure-after-steve-jobs-but-the-first-edition-appl.html

IMAGE: www.resultsbydesignconsulting.com

A different view:

Enterprise IT should embrace the Apple Watch

By Jordan Golson From Tech Republic

On Tuesday, Apple previewed the Apple Watch, a smart wristwatch that will launch in early 2015. Just like the iPad and the iPhone before it, expect Apple’s latest gadget to be in heavy demand from Day One.

Tuesday, at a jam-packed event that saw the introduction of new, larger iPhones and a new mobile payments platform, Apple also previewed the Apple Watch, a brand new smart watch that acts as a wrist-mounted extension of the iPhone.

Complete with a new user interface called the Digital Crown — an evolution of the original iPod’s scrollwheel — that Apple CEO Tim Cook compared to the original Macintosh’s mouse or multitouch on the iPhone, the Apple Watch is one part digital timepiece, another part personal communicator and a third part health and fitness device.

BYOD will bring the Apple Watch into the enterprise

Expect the Apple Watch to make similar inroads to the enterprise, just like the iPhone has over the past half-decade, after it launches to the public in early 2015.

Because iOS app developers will be able to make companion apps for the watch, many productivity applications will find their way to the device in some form or another.

Fantastical developer Michael Simmons told me that, in his opinion, the best thing about the Apple Watch is “the ability for people to always have an intelligent device with them.” Apple showed off Watch versions of its own productivity apps, including email, messaging, calendars, calls, maps and directions and much more. Then there’s everything that developers might be able to do.

“The user interface definitely excited me the most,” said Simmons. “That Apple didn’t just reuse iOS interactions and truly rethought the new screen and size.

“I believe that’s why wearables have failed up until now. They basically “shrunk” phones and tablets. The wearable needed to be completely rethought and Apple definitely has done that.”

Luckily for workers in security-sensitive organizations, the Apple Watch doesn’t contain a camera to be covered up or secured (when I visited a major corporate headquarters a few months ago, I had to cover up five separate cameras across all the devices I had with me), and, because the device pulls data through a companion iPhone, Internet connections should (though Apple has not confirmed this) pass through corporate VPN networks if set up as such.

Much like corporations have developed in-house apps for iPhones and iPads, we expect that companies will seek new apps for the Apple Watch as well. I can see endless opportunities for field use of the Watch, not including obvious use cases like calendars and email.

Standalone apps could be used for field technicians, to help keep them on schedule or to get directions to a next job. They could be created for doctors and nurses, to get quick updates and notifications on patients. There is a vibrate function, allowing users to get discreet notifications of events that might need their attention in an important meeting.

Then there’s the massive health and wellness component that could be used by companies to encourage their workforces to get up and exercise more during the day. There are many possibilities to explore, and I’m anxious to see what developers and companies have in store for Apple’s latest platform.

As for Simmons and Fantastical, he demurred when asked about an Apple Watch version of the popular calendar app, but said “we’re very intrigued and curious” about the platform.

About Jordan Golson

Jordan Golson is an Apple Columnist for TechRepublic. He also writes about technology and automobiles for WIRED and MacRumors. He has worked for Apple Retail twice and has been writing about technology since 2007.

IMAGES:

apple-event-apple-watch-5446.jpg James Martin/CNET

apple-event-apple-watch-5434.jpg James Martin/CNET

For more on this story go to: http://www.techrepublic.com/article/enterprise-it-should-embrace-the-apple-watch/?tag=nl.e101&s_cid=e101&ttag=e101&ftag=TRE684d531

 

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