Apple Watch holds 50% of the wearables market?
This article.
Not to slam Apple. This is good news for them on some level. It shows them to be a success in that market. But the problem is that this metric highlights a fundamental problem with wearables. You need an iPhone to use with your Apple Watch and while iPhones are monstrously successful from a revenue standpoint, they are actually a distant 2nd with less than 30% of the market.
Now another article claims 40% of iPhone users are interested in the Apple Watch. Firstly, that means that substantially less than that actually own, but even if we assume every one of those 40% gets one, the market for Apple Watch would still be only a little more than 10% of the size of the smart phone market and the total market is just a little more than 20%.
But, as I said, that 40% is just people who want an Apple Watch. Reality is MUCH lower at present. I don't have hard numbers, but it is probably safe to say that the total size of the wearables market is well under 10% the size of the smartphone market and Apples share is only half of that.
Like I said, this isn't necessarily a bash at Apple. It is really more a bash at the device category. Wearables is a puny market. Apple is undoubtedly the current winner in that circle. If the total size of the market were 2 wearables, this would mean Apple only sold 1. Now, it is clearly larger than that. But that is a better analogy than comparing it to a market like PC's, tablets or phones which are selling 100's of millions a year, or in the case of phone, a quarter.
There are 2 other problems with those numbers. It also means that their sales of Apple Watch, which aren't large enough for Apple to even break them out and disclose don't have a lot of room to grow. In other words, if tomorrow they were 100% of the wearables market they would have only doubled their sales. Hard to think that would be enough to justify them having the pride in their sales volumes to start disclosing. This means that Apple has to actively work to grow the wearables market or accept this "fate".
Which brings us to the last problem; the "Apple effect". Apple does have a tendency to ignite interest in device categories. But they have never held first for a very long time. Years ago they were the undisputed leader in smart phones. Then Androids cheaper, more open devices overtook them. They dominated tablets for years, but then again, Android tablets eventually closed the gap and overtook them.
If Apple makes wearables popular, they then also need to make sure that the growth is explosive because their business model creates opportunities for companies like Microsoft and Google who are willing to either license or sell at a lower price point to erode that market. Right now people aren't buying Apple Watches because they want a smart watch or a wearable. They are buying them because they are the latest cool Apple product. During this phase, Apple is basically invincible. The second it becomes about the device category for consumers though, most sales will shift to more affordable brands.
In other words, it is actually in Apple's best interest that wearables maintain miserable growth and never catch on.
Not to slam Apple. This is good news for them on some level. It shows them to be a success in that market. But the problem is that this metric highlights a fundamental problem with wearables. You need an iPhone to use with your Apple Watch and while iPhones are monstrously successful from a revenue standpoint, they are actually a distant 2nd with less than 30% of the market.
Now another article claims 40% of iPhone users are interested in the Apple Watch. Firstly, that means that substantially less than that actually own, but even if we assume every one of those 40% gets one, the market for Apple Watch would still be only a little more than 10% of the size of the smart phone market and the total market is just a little more than 20%.
But, as I said, that 40% is just people who want an Apple Watch. Reality is MUCH lower at present. I don't have hard numbers, but it is probably safe to say that the total size of the wearables market is well under 10% the size of the smartphone market and Apples share is only half of that.
Like I said, this isn't necessarily a bash at Apple. It is really more a bash at the device category. Wearables is a puny market. Apple is undoubtedly the current winner in that circle. If the total size of the market were 2 wearables, this would mean Apple only sold 1. Now, it is clearly larger than that. But that is a better analogy than comparing it to a market like PC's, tablets or phones which are selling 100's of millions a year, or in the case of phone, a quarter.
There are 2 other problems with those numbers. It also means that their sales of Apple Watch, which aren't large enough for Apple to even break them out and disclose don't have a lot of room to grow. In other words, if tomorrow they were 100% of the wearables market they would have only doubled their sales. Hard to think that would be enough to justify them having the pride in their sales volumes to start disclosing. This means that Apple has to actively work to grow the wearables market or accept this "fate".
Which brings us to the last problem; the "Apple effect". Apple does have a tendency to ignite interest in device categories. But they have never held first for a very long time. Years ago they were the undisputed leader in smart phones. Then Androids cheaper, more open devices overtook them. They dominated tablets for years, but then again, Android tablets eventually closed the gap and overtook them.
If Apple makes wearables popular, they then also need to make sure that the growth is explosive because their business model creates opportunities for companies like Microsoft and Google who are willing to either license or sell at a lower price point to erode that market. Right now people aren't buying Apple Watches because they want a smart watch or a wearable. They are buying them because they are the latest cool Apple product. During this phase, Apple is basically invincible. The second it becomes about the device category for consumers though, most sales will shift to more affordable brands.
In other words, it is actually in Apple's best interest that wearables maintain miserable growth and never catch on.
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