Apple Watch – huge hit, or massive miss?
The Apple Watch looks like being one of the biggest brand events of the year. And I'm a signed up member of Appleaholics Anonymous. But even I'm not sure if it's going to be a hit or a miss. Let's have a look at the arguments for and against the Watch's success.
Why it should be a HUGE HIT
1. Its already a billion dollar product!
Yes, you read right. In the first week or so of the Apple Watch going on pre-order, the company is reported to have taken pre-orders of c. 2 million units, at an average price of c. $500. So, in a matter of days, we are looking at what should be at least a one bloody billion dollar business.
If these pre-orders are all converted into sales, that's pretty good going when you look at other Apple launches. The first iPad sold 300,000 units globally on day one, and one million in 28 days. Supply may be an issue. The delivery date for online sales now just says "June".
These early sales dwarf the six month sales of the ALL Android Wear smart watches in 2014 of 720,000 units, according to reports here.
2. Marketing muscles being flexed
Apple has got it's marketing machine firing on all cylinders behind the Apple Watch. First, the Watch was first revealed at an Apple Event back in 2014. So there have been several months of buzz and hype to build up demand. Second, the TV support for the Watch has already started, before it is even on sale, to further ramp up desire. Finally, and perhaps most importantly, Apple has the huge marketing advantage of the Apple Stores to showcase the Watch to potential buyers. "Buying an iPhone/iPad/Mac today? Have you thought about a Watch to go with it?"
3. Forecast interest is high
CNBC.com surveyed US consumers about their intention to buy an Apple Watch. They reported that "only 3.2 % of consumers are planning to brave the crowds and purchase the device". Only 3% eh? But multiply that by the US population and I get to c. 7.5 million people x $500 a pop = $3.75 billion just in the US. This would be almost double the 2014 sales of ALL wrist-worn wearables, according to this report.
Why it could be a MISS
1. iPhone dependent
I still can't quite get my head round the need for the Apple Watch, given that it only works with an iPhone. Why would you want to look at a text message/map/restaurant booking site on a tiny watch screen, when you can look at this on your iPhone that is in your pocket?
The experience of early adopters will be key. Will they, as with the iPad, find that once they have the Apple Watch they wonder how they lived without one before? Or, will they find it's a bot of gimmick which is good for telling the time, and maybe tracking activity levels, but not much more?
2. Young people don't wear watches!
There is some evidence that the younger generation are less into wearing a watch at all, using their always-on mobile to tell the time instead. In one UK survey 14% said they had no need for a watch with the percentage doubling among 15 to 24-year-olds.
3. Less of a need to upgrade?
Perhaps the biggest argument against the long term success of the Apple Watch is the need to upgrade, or rather lack of it. With the iPhone people are used to upgrading their phones at the end of a 24 month contract, creating an in-built demand for new iPhones. This applies to a lesser extent for iPad, where there is less of an upgrading habit. This could be one of the reasons why iPhone is c. 60% of Apple's revenue vs. 20% for the iPad. But will you want to upgrade your Apple Watch every few years, especially as one survey found the feature people are most likely to use on it is…. telling the time?
4. It will irritate the HELL out of you
A final argument against the Apple Watch is that it will take the interruptions created by mobile phones to a whole new level. Already family life, relationships and meetings are being compromised by people always looking at their mobile phones. Now, keeping your phone in your pocket or turned upside down won't be enough to escape. A stream of notifications will now ring AND vibrate on the Apple Watch, unless you turn them all off. As the Editor of The Verge says in this demo video, "I'm now aware of how many people I'm ignoring than ever before (by not replying to my mobile messages/notifications)".
Net, I think Apple will sell a lot of Watches in year 1, say 5-7 million? But I'm far less convinced of how sustainable the sales will be over time. A key factor will be the experience of the early adopters. Which reminds me… gotta go and pre-order an Apple Watch.
