Sure there were the usual free press releases in which the Tame Apple Press outdid itself. Our favourite was Bloomberg which actually claimed that the Swiss economy would collapse now that Apple had put out its watch . Given that the Swiss economy is a little more dependent on Nazi and Mafia gold and its watchmaking industry was gutted by the advent of the digital watch, we doubt it will lose much sleep over Apple’s efforts in the industry.
However saner heads rushed to point out that the whole Apple spin on its new toy was completely off base.
As Tech Crunch eloquently put it “if Switzerland is fucked than the iWatch is too.” It makes the point that the Swiss watch industry is not Apple’s target market. The real niche here is the wearables space which is so limited that no one will admit how many wearables have sold so far. It has been estimated that it could be as high as 90 million, but the Federation Of The Swiss Watch Industry said that it sold 28.1 million timepieces last year for a total of $23 billion. That’s an average of $836 a watch.
But it has known for ages that the wristwatch is a dying object. More than 60 percent of 18-34 year olds get the time from their phones and watches are rare in the wild and when you see them they are worn for a reason. The most expensive watches go to collectors, whose rationality is suspect, and the very rich. The mid-range watches go to folks who appreciate the artistry of a fine mechanical timepiece and the riff-raff will get the cheap gear. In this situation, the iWatch would count as cheap gear.
What Apple has forgotten with its iWatch is that people do not buy watches to tell the time. They are either a fashion statement or a tradition. At the low end you buy a Swatch because you like the styling and the slightly wicked, slightly retro feeling of insolence that comes with wearing a watch with hands. These are not mind-sets that want their watch to do anything and this is exactly why so far the wearables have only managed any interest in the sports diagnostic industry.
Normally this would not be a problem for Apple. After all Jobs convinced the world, that everyone needed a tablet when Microsoft and HP could not do so for years. To our mind, the tablet is still a product without an actual killer app, but Apple convinced the world they all needed one.
However, in this instance they are wrong. A tablet at least was technology which could work but hadn’t. A watch is retro-technology which has bolted-on new functionality which it is not really designed to do. As my wife pointed out the watch screen is too small to see or use and is counter to the same desire of consumers for phablets or things which are bigger and can be easily integrated with.
Given this, even the Wall Street Journal has its doubts as to whether Apple will be saved by its iWatch. Media outfits which are not members of the Tame Apple Press are still reluctant to declare the idea a lemon because Apple has managed to market its way out of trouble before and they look like idiots. But the Journal points out that the potential of the Apple Watch is “tough to gauge”. The device won’t hit the market until early next year, and a $349 starting price is at a bit of a premium to rival offerings.
The market for smartwatches is nascent and none of Apple’s rivals has yet cracked the code for delivering a product with the right mix of style and functionality, the Journal pointed out.
Unlike previous Apple products that forged new product categories, the watch is essentially an upsell of the company’s existing customers and only customers with an iPhone 5 or newer will be able to use it. Although it is unthinkable that any true Apple fanboy would not have the latest iPhone, there are still a fair few of the devices out there.
The Journal also points out that it would take more than 55 million units of the Apple Watch selling at $349 to equal just 10 per cent of the $197.4 billion Wall Street expects for Apple’s fiscal 2015 revenue. In short, even if it does well, it will not be a game changer for Apple.
As cooler heads start to look at the announcement, it seems that Apple is leaning on the launch of its iPhone 6 and the iWatch is just a somewhat silly distraction. But that does mean that truly Apple has run out of game changing ideas that will continue its growth.
In time it will be the launch of the iWatch which will mark the slow slid of Apple into mediocrity. It is also worthwhile pointing out that the Swiss have not been defeated in battle since the Middle Ages and that is despite being armed with small but useful folding knives and pikes.