Apple Watch as a viable business
I don't get it. Why are people clamoring to defend Watch? And why are so they so dumb about it?
Here is the source of tonight's ire.
The article makes what, on the surface, appears like a valid argument. Watch might be a $10B business and that is larger than not only all of it's competitors, but also many other large standalone companies.
I'm going to ignore (aside from pointing it out here) that the $10B figure is purely speculative. It could be FAR worse and it is drastically unlikely to be much better. I think it is an optimistic evaluation. But, that isn't the thing which bugs me.
You can't treat Watch like a separate business! In fact, the article points out of the reason for this. "Loyalty". Watch isn't a standalone business and would have undoubtedly fared worse without the Apple brand backing it. We can only speculate at how much worse. I could, like the study the author mentions, go looking and make educated guesses based on the market, but they would be as bad as the original.
I may be stretching things, but Apple could sell just about any piece of electronics and expect better results than a new company and even probably better sales than even their existing competition. Their brand image is just that strong. As such, it is folly to even imagine the viability of this product apart from Apple. In fact, there are only 2 things that make valid measurements; measuring it against Apple's expectations (which they won't share [either the expectations or actual sales]), or against other Apple product lines.
Put simply, the Watch likely couldn't exist outside of Apple.
Sure, by some measures the Apple Watch is a success. It is probably making Apple "some" profit. Or at the very least having a net positive effect. For instance, maybe it is losing money, but it drives enough additional sales to accessories and iPhones the justify it. It is also the clear leader in the smart watch market.
But. Sorry to say. That doesn't make it a success.
Let's start with expectations. I don't know Apple's exact numbers. Few people outside of Apple do. But, I can say this. Apple expected it to be the next big thing. Tons of tech companies were jumping on the wearables bandwagon and using watches as their entry point. Apple unveiled right in the middle of this. And they made a HUGE deal about it. Original analysts predicted (insanely) huge sales which would have been in the right ballpark. Where we end up? An estimated 12M in their first year. That's what? 1/5 the number of iPhone's they sell in a QUARTER.
So, while I don't know the original estimates Apple had, I can easily tell you that they fell short. They are exceeding predictions now, but those are predictions tempered by an initial shock. They got bitch slapped. So they lowered the bar so low it would be hard NOT to exceed it.
The next place to look is strategy. The original Apple Watch relied on a brand new iPhone for everything, but they are now making the Watch more and more autonomous. This means one of two things... they saw that they f***ed up, or the original device was still years away from being a viable product. I think a mix of both, but internally, probably more the former. Apple doesn't care about playing nice with others. If the original launch were a success, Apple wouldn't give two shits about offloading more to the phone or making it more autonomous.
The rift between Watch 1.0 and Watch 2.0 is SO vast, it is almost impossible to believe that Apple had ever really intended to do anything it ultimately did. And, leading from that, it is further unlikely that they would have changed so much if there weren't a financial motivator.
I don't care what brave face Tim Cook puts on when he talks to the press or investors. It seems clear to me Apple that within the upper echelons of Apple, Watch is considered a failure.
I don't see their continued commitment to Watch as a sign of it's success. I see it as a fear of sending too clear a sign to the markets that they see it as a failure. Like Apple TV, they need to keep it afloat to protect the brand. And, after a while, they may either get it right, or the market might ripen. They have the money to do this.
So while I can agree, Watch may not be a total failure. It is a failure nonetheless. And maybe that isn't Apple's fault (though I do feel the product is deeply flawed). I always commented that the wearables market is more about a collection of smaller niche markets and is unlikely to ever be the next big thing. Even if volume gets large enough, I simply think it will be divided amongst too many product lines and competitors to justify it. Heck... even smart watches is too divisive a market. Some want fashion, some want a fully mobile OS, some want fitness and so on. Given the size and battery life we can fit in a watch today, it is actually VERY easy for competitors to beat Apple in those key areas.
Personally, I think Apple already had the best spot in the wearables market... the iPhone. It isn't a wearable that will dominate that market, but something that can tie them together and aggregate information. And right now smartphones are the ultimate hub. It is powerful enough to be that central point and it is a device which you will either have on you all the time, or be in range of frequently enough for syncing. They should have focused on that aspect. Instead they tried to tackle the market directly.
I think the final piece of proof is in the pudding. If this is a $10B business. And if that is a good thing. Then there is no reason to hide it. Their response that the information would "help competitors" is horse shit. If anything, it would bury them. Consumers having hard proof that Apple's Watch is more desirable than competing products would just reinforce consumer decisions to buy it. Make no mistake, whatever the extent of Watch's success is, it is still bad enough that Apple doesn't see it as a success. Regardless of what you or the rest of the industry thinks.
Here is the source of tonight's ire.
The article makes what, on the surface, appears like a valid argument. Watch might be a $10B business and that is larger than not only all of it's competitors, but also many other large standalone companies.
I'm going to ignore (aside from pointing it out here) that the $10B figure is purely speculative. It could be FAR worse and it is drastically unlikely to be much better. I think it is an optimistic evaluation. But, that isn't the thing which bugs me.
You can't treat Watch like a separate business! In fact, the article points out of the reason for this. "Loyalty". Watch isn't a standalone business and would have undoubtedly fared worse without the Apple brand backing it. We can only speculate at how much worse. I could, like the study the author mentions, go looking and make educated guesses based on the market, but they would be as bad as the original.
I may be stretching things, but Apple could sell just about any piece of electronics and expect better results than a new company and even probably better sales than even their existing competition. Their brand image is just that strong. As such, it is folly to even imagine the viability of this product apart from Apple. In fact, there are only 2 things that make valid measurements; measuring it against Apple's expectations (which they won't share [either the expectations or actual sales]), or against other Apple product lines.
Put simply, the Watch likely couldn't exist outside of Apple.
Sure, by some measures the Apple Watch is a success. It is probably making Apple "some" profit. Or at the very least having a net positive effect. For instance, maybe it is losing money, but it drives enough additional sales to accessories and iPhones the justify it. It is also the clear leader in the smart watch market.
But. Sorry to say. That doesn't make it a success.
Let's start with expectations. I don't know Apple's exact numbers. Few people outside of Apple do. But, I can say this. Apple expected it to be the next big thing. Tons of tech companies were jumping on the wearables bandwagon and using watches as their entry point. Apple unveiled right in the middle of this. And they made a HUGE deal about it. Original analysts predicted (insanely) huge sales which would have been in the right ballpark. Where we end up? An estimated 12M in their first year. That's what? 1/5 the number of iPhone's they sell in a QUARTER.
So, while I don't know the original estimates Apple had, I can easily tell you that they fell short. They are exceeding predictions now, but those are predictions tempered by an initial shock. They got bitch slapped. So they lowered the bar so low it would be hard NOT to exceed it.
The next place to look is strategy. The original Apple Watch relied on a brand new iPhone for everything, but they are now making the Watch more and more autonomous. This means one of two things... they saw that they f***ed up, or the original device was still years away from being a viable product. I think a mix of both, but internally, probably more the former. Apple doesn't care about playing nice with others. If the original launch were a success, Apple wouldn't give two shits about offloading more to the phone or making it more autonomous.
The rift between Watch 1.0 and Watch 2.0 is SO vast, it is almost impossible to believe that Apple had ever really intended to do anything it ultimately did. And, leading from that, it is further unlikely that they would have changed so much if there weren't a financial motivator.
I don't care what brave face Tim Cook puts on when he talks to the press or investors. It seems clear to me Apple that within the upper echelons of Apple, Watch is considered a failure.
I don't see their continued commitment to Watch as a sign of it's success. I see it as a fear of sending too clear a sign to the markets that they see it as a failure. Like Apple TV, they need to keep it afloat to protect the brand. And, after a while, they may either get it right, or the market might ripen. They have the money to do this.
So while I can agree, Watch may not be a total failure. It is a failure nonetheless. And maybe that isn't Apple's fault (though I do feel the product is deeply flawed). I always commented that the wearables market is more about a collection of smaller niche markets and is unlikely to ever be the next big thing. Even if volume gets large enough, I simply think it will be divided amongst too many product lines and competitors to justify it. Heck... even smart watches is too divisive a market. Some want fashion, some want a fully mobile OS, some want fitness and so on. Given the size and battery life we can fit in a watch today, it is actually VERY easy for competitors to beat Apple in those key areas.
Personally, I think Apple already had the best spot in the wearables market... the iPhone. It isn't a wearable that will dominate that market, but something that can tie them together and aggregate information. And right now smartphones are the ultimate hub. It is powerful enough to be that central point and it is a device which you will either have on you all the time, or be in range of frequently enough for syncing. They should have focused on that aspect. Instead they tried to tackle the market directly.
I think the final piece of proof is in the pudding. If this is a $10B business. And if that is a good thing. Then there is no reason to hide it. Their response that the information would "help competitors" is horse shit. If anything, it would bury them. Consumers having hard proof that Apple's Watch is more desirable than competing products would just reinforce consumer decisions to buy it. Make no mistake, whatever the extent of Watch's success is, it is still bad enough that Apple doesn't see it as a success. Regardless of what you or the rest of the industry thinks.
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