Apple Is Not Winning the Smartwatch War
Apple’s iPhone is by far the most popular smartphone, with a more than 100 million unit penetration in the US market alone. Combined with the iPod, and later the redesigned Macbook, a commonly held view is that the device “saved” the company – brought it from mediocre stock prices to industry-leading profits. It was only a matter of time before the company then entered the arena of “smart” watches, or watches that are capable of various types of computing along with telling the time.
Apple delivered its watch product last April among a herd of competition from the likes of Samsung, Motorola, and the usual massive gaggle of no-name competitors. According to recent numbers, the latter group, combined, is currently pummeling Apple in the war of the wrists. It seems that Apple’s great mass of iPhone users have not embraced the full “wearable” experience – at least not as provided by Apple.
It is hard to get hold of actual sales figures of the Apple Watch itself, but the category that Apple reports it in (“other”), lost 16% since last year in recent showings. It would seem that if there were a severe uptake of the product, this category would have gained in a measurable way. Part of the reason that consumers are opting for other products is price: Apple has one of the more expensive devices in the category. But another reason is the inescapable coupling of Apple Watch with the iPhone, a current reality which limits adoption to those already in the Apple ecosystem.
The Apple Watch’s first generation lacks a standalone GPS, meaning it requires an iPhone to track the location of its wearer. This makes it just an additional piece of equipment for exercise enthusiasts who might otherwise adopt the technology. The requirement of an iPhone, in and of itself, is a break from Apple’s previous innovation strategy. The iPod and iPhone were compatible with Windows computers via iTunes from early on and this fact could be credited with the company’s later boom in the personal computing market. People were able to experience what might be perceived as Apple’s “high quality design” without spending thousands. Meanwhile, Sony and others have already been offering a competing product with standalone, built-in GPS capabilities for many moons.
Today’s Apple event is believed to play host to the unveiling the Apple Watch’s second generation, and while it is expected to include a standalone GPS offering, many believe that the company will have to go the extra mile if it wants to regain ground in this area. Other areas of the wearables market, which include “basic” devices that are not Swiss Army knife-like in nature, saw a rise in sales over the past year. Andy Hargreaves of Pacific Crest Securities believes that Apple should take advantage of this, telling CNBC: “Despite the potential for GPS to drive growth in Apple Watch unit volume, we continue to believe Apple will have to expand its wearables lineup with lower-functioning devices at lower price points to fully capture the opportunity.”
Apple has been in a perceived period of innovative stagnation for some time, with the iPhone nearing 10 years of age, the Macbook widely receiving criticism for having older hardware but high price points, and inexpensive devices like the Chromebook dominating the market that Apple sought to enter with its Airbook line.
The company will also be unveiling the iPhone 7 today, which is said to be introducing a feature many are viewing as a mistake – the total elimination of the headphone jack in favor of wireless headsets. This device, along with the second iteration of the Apple Watch, will need to be a true jaw-dropper if Apple expects to maintain and continue to expand its dominance in the mobile sphere as time goes on.
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