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iWatch: Why It Has to Be The Perfect Smartwatch

by Todd Haselton | July 17, 2014July 17, 2014 1:00 pm PST

Apple’s highly rumored and often talked about iWatch needs to be a breadwinner. No, Apple isn’t in any sort of dire straits – the company is still performing admirably in the smartphone and tablet markets. However, Tim Cook and his team have been talking a big game, Wall Street is watching Apple’s every move, consumers are waiting for new products and Samsung, Google and Pebble are all taking market share away from segments Apple hasn’t touched: smartwatches and wearables.

So, come October when we expect the iWatch to officially launch, the Apple product needs to be a big hit. Let’s go over four reasons why the iWatch can’t be a dud, particularly focusing on expectations set by the company, set by Wall Street and set by Apple’s closest competitors that have already launched smartwatches and other wearables. We’ll also look at some other factors, like the Apple iWatch release date and the Apple iWatch price, two parts of the puzzle that will also be important.

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Promises

Apple CEO Tim Cook and his executive team have been talking a big game. In October of last year, following the company’s fiscal fourth quarter earnings report, Cook said that Apple was going to launch “new product categories” in 2014. We’re now six and a half months into 2014 and Apple hasn’t fulfilled that pledge.

Add that to another promise made by Apple senior vice president of Internet Software and Services, Eddy Cue back in May. “Later this year, we’ve got the best product pipeline that I’ve seen in my 25 years at Apple,” Cue said. Apple has been building hype around its unannounced products, and it’s going to need to deliver, particularly as competition in the smartwatch market begins to heat up now that Google has entered the fray with the first Android Wear products.

All eyes are on Apple and, with new reports of the iWatch breaking almost daily, the company’s smartwatch announcement is expected in October.

Wall Street Expectations

Consumers and fans aren’t the only ones watching Apple; Wall Street always has the company in its scopes. Earlier this week, Morgan Stanley analyst Katy Huberty said her most bearish estimate is that Apple will sell 30 million iWatch smartwatches during the first 12 months it’s available for purchase. To put that in perspective, that’s about the number of iPhones Apple sold when the original device was first launched.

Huberty’s most bullish estimate is that Apple will sell 60 million iWatch smartwatches in the first year, roughly the number of iPads Apple sold when that product was first introduced. If successful, Apple could generate as much as an additional $9 billion in revenue from the iWatch alone.

These are super aggressive estimates that puts the iWatch on par with the success of the iPhone and the iPad. Apple’s capable of delivering – the iPhone turned the smartphone market on its head, and the iPad took tablets mainstream. Can the iWatch do the same for smartwatches?

It’s a Reflection on Management

Apple isn’t the same kind of company as some of its stiffest competitors, like Google. Google is known for experiments (Google X), for search, for apps, for advertising, for mobile platforms and more. Apple is known for its tangible products and software, and the next major hardware product that it releases is going to be a direct reflection of Tim Cook’s management in the company. It also may be the first that wasn’t a brainchild of Steve Jobs. Wall Street and consumers alike are going to judge the quality of the iWatch very acutely.

While Google can get away with a product dud (remember the Nexus Q?) a flop from Apple is going to reflect poorly on Tim Cook and his team, largely because it’s seen as a hardware and software company.

Sure, Apple’s made its own fair share of mistakes in the past with a few flops of its own, but given the Wall Street expectations we discussed, in addition to the hype Apple has built around its own upcoming products, the iWatch smartwatch needs to be a real winner and will absolutely reflect on management.

Apple Has the Power to Take Wearables Mainstream

I was super excited for Android Wear when it first launched, but as I explained earlier this week, it’s a super frustrating smartwatch platform right now that still needs time to grow. That’s fine, and I’m sure Android Wear will get there soon. Still, for smartwatches to become real mainstream devices, something that Joe Consumer is going to want to pick up, Apple’s attempt has to be much, much more polished than Google’s. As I said in the earlier section, Google gets away by catering some products to the geeks in us (Google Glass, for example) but Apple operates differently.

It won’t be easy, though. Software is going to have to be spot on, as will other things, like the design. One obstacle Apple will face is selling the iWatch to folks who like high-end watches and wear them as jewelry. Or people who have sentimental attachment to their timepieces. Additionally, the Apple iWatch release date and Apple iWatch price are going to be important. Nielsen recently found that wearables priced between $200 and $300 are still too expensive for most consumers to stomach. Can the Apple iWatch price come even lower? The Apple iWatch release date is also important: will Apple simply announce it in October or sell it then, too?

A killer iWatch from Apple would mean stiffer smartwatch competition across the board. Google would be forced to get Android Wear up to speed, which is great for people like me who already bought the G Watch or Gear Live, because that means more updates and a greater focus. It also pushes companies like Pebble to continue to push forward, and may even spur Microsoft to finally get its rumored smartwatch out the door. Whether you want to admit it or not, Apple, like Google, is a company that other firms watch closely.

A winner in the iWatch is a win for consumers. We’ll see everyone start to deliver better smartwatch products across the board, and with more features than ever. We see the same thing happen in the smartphone and tablet markets, and that’s led to smartphones with stand-out cameras and other unique features that reward consumers.

Final Thoughts

So why does the iWatch need to slaughter the competition? Well, for starters because Apple is talking a big game right now. Also, Wall Street is watching like a hawk, and a dud is going to reflect poorly not only on the company, but on its management.

Also, by releasing a first-class and killer product, Apple will spur the rest of the smartwatch makers to step up their game, resulting in better products for all consumers. October, the expected iWatch launch month, is just around the corner, but for now we still don’t have a clue on the Apple iWatch price or the Apple iWatch release date, both of which will play a crucial role in the success.

Will Apple pull it off?


Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...

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