Why Apple’s Watch is a Success
May 18, 2015
Many of us in 2004 owned an iPod, a cell phone, a digital camera and a laptop. And when I traveled I took all four of these devices with me; along with various chargers and cables needed to keep them going. Also at that time everyone in the tech industry was talking about convergence, or the combination of at least the first three of these mobile devices. The cell phone makers, such as RIM and Motorola, were adding cameras and music capability to their devices. And companies like Palm and Handspring were trying to add cell phone capabilities to their handheld computers.
Between 2004 and 2007 there was a flurry of effort to “converge” mobile functionality. Nokia and Samsung had their spins on the idea, and I recall that Microsoft had something in the works as well, although like most things from Microsoft it wasn’t memorable to me. But all of them were really in a hurry to try and get it right, because during that time everyone knew that when Apple came out with their phone it would be amazing. Back then there was anticipation before every Apple event, “Would this be the day when they announced the phone?” The anticipation built to incredible levels, because really, everything up to that point sucked.
Of course in 2007 Apple did announce the iPhone. It was amazing and it changed the cell phone industry forever. Old leaders like RIM and Nokia got destroyed. While Apple became the most valuable company on the planet. Now why, you might ask, did I just spend the last two paragraphs recounting the birth of the smart phone? Because the Apple Watch is not the same thing as the smart phone. The watch doesn’t solve five years of pent up demand for the integration of different mobile technologies. So to decide if the Apple Watch is a success or not, one has to view it in the correct frame of reference. As a good friend and colleague once told me, “It’s not whether your glass is half full or half empty, your glass is too big.” Here’s why the Apple Watch is a success, in the ways it should be considered.
1. Design - The design of the Apple Watch is classic Apple engineering. The very fact they were able to integrate all the capability in this form factor is a victory. Sure, in five years we’ll look back on these first watches and shrug at their functionality, but there’s no question that they are today’s state of the art. And, like other Apple products the construction is virtually flawless. To see one, and to hold one, is to want one. Only the part of our brain that controls reason prevents us from whipping out our credit cards and buying one on the spot. Even if it didn’t function we might be tempted to wear it as jewelry, or a statement piece like those popular rubber wrist bands supporting various causes.
2. Generation Z - For my purposes let me pick 1999 as the beginning birth year for Gen Z. And so in this case, no one from Gen Z will likely have a recollection which predates the original iPod released at the end of 2001. This not only means they have grown up in a world where records, CDs and cassette tapes were irrelevant, but they have grown up in a world where Apple has been synonymous with supplying the technology that allows them to enjoy their modern lives. This is a generation that sees much of the world, and communicates to each other, via electronic devices. When I was 11, I had to have a decent bicycle. Because it gave me the freedom not only to go to my friends‘ homes, but to also get out and experience life around my community. But within Gen Z, at 11 you absolutely have to have a smart phone, and more ideally an iPhone. And it’s really for the same reasons; social interaction and exploration. How electronic is the social experience of Gen Z? At a recent family gathering the kids were teasing my 14 year old nephew about breaking up with his girlfriend. When I asked how close they had gotten, he told me, “It was very serious! We almost spoke to each other in person.”
Now, this Oracle is pretty certain that every person over the age of 25 who is reading this right now has owned a wrist watch for the purpose of telling time. And I’m also confident that almost no one under the age of 16 has. This means that Gen Z likely has no preconceived notion of what a watch is, and has thus left Apple with the freedom to redefine it. And, while there are many useful things about the Apple Watch, I believe that it is its haptic messaging capabilities that ultimately appeal to this generation. Haptic refers to a device’s ability to stimulate our sense of touch. The Apple Watch includes haptic functions with the ability to “tap” your arm or wrist while you are wearing it. For a generation which is used to communicating at a distance with each other, via sight and sound, their experience with the Apple Watch has just been expanded to include one more of the human senses. Apple openly promotes the ability to “tap” your friends arm at a distance using the watch, or even send your heart beat via the watch so your friend can feel it on his/her arm. And by doing this, the Apple Watch is a success.
3. Gifting - For anyone who doesn’t currently have Gen Z children, this one may come as a shock to you. But parents and families can have a difficult time finding holiday gifts for their Gen Z children that land between the $200 and $400 price points. That’s right, between $200 and $400. Now, in my experience, people have grown tired of buying, and gifting, junk. Parents, and in situations where the parents can’t afford these price points themselves, then families pooling gift money together, want to give Gen Z children things they will still be using and enjoying six months later. In this price range girls might be asking for Lululemon clothing and Ugg foot wear, while boys may want large Lego sets or the latest video gaming systems. But whether boy or girl, every Gen Z’er smiles when unwrapping something from Apple. When iPods were the rage, they would last around three years. Phones typically come with a two year contract. And I’m still happily using my four year old iPad. As it turns out, Gen Z needed another Apple product to fill the “gifting gap” and with a starting price of $350 the Apple Watch does it.
4. Bigger Phones - This is something everyone can appreciate, regardless of age. When the big Samsung phones came out, I called them “chick phones” because the people I saw using them were women who would simply toss them into their purses when not being used. I still consider the iPhone 6 Plus a “chick phone” simply because this Oracle stays fit and there’s no room in his pockets for a phone that big. Now, giving credit where it’s due, Apple managed to reduce the thickness of the iPhone 6 and 6 Plus versus the iPhone 5s. And when it comes to carrying a phone in one’s pocket the volume of a phone matters. So with it’s thin construction and rounded corners I’ve found carrying my iPhone 6 around with a minimal case to be reasonable. However, whether your phone is in a purse or a pocket, its size has made it a lot more cumbersome to pull out at a moment’s notice while sitting or doing many activities. Meanwhile, we’re all using messaging and voice calls on our mobile phones more. So something’s had to give. Apple was brilliant releasing the watch shortly after the bigger iPhones. The watch acts as an extension of the communication capabilities of the iPhone, allowing one to quickly check if it’s necessary to stop and make the effort to retrieve the phone or not. As an accessory, and an extension of the bigger iPhones, the Apple Watch is a success.
5. Health Monitoring - There have been products on the market which monitor physical activity and the wearer’s health for a while. They remind me of music players on the market prior to the release of the iPod. The Apple Watch takes it to a new level. By integrating the health functions, and the ability for third party apps to integrate with the health monitoring functions, Apple has planted the seeds for a whole new future of integrated health functionality. It’s conceivable that some health insurance companies could offer discounts for subscribers that allow the collection of Apple Watch health data. Just like Progressive offers preferred insurance premiums for drivers that outfit their cars with speed tracking devices. Similar to a responsible diet or a consistent workout the results of this effort will not be obvious until some time has passed. But by thinking about health as a key part of the Apple Watch’s capabilities, and by providing developers with the tools to build upon them, the Apple Watch is a success.
So there you have it. Five reasons the Apple Watch was really a success right from the beginning. It reminds me of the digital hub concept Apple used to market the iMac at the end of the 1990s. The Apple Watch, Apple Pay service, a bluetooth headset or headphones, even a bluetooth connected car audio system, are all extensions of the Apple iPhone. Making the iPhone it’s owner’s mobil digital hub. And for Apple, that means selling more iPhones, not just Apple Watches. In the interest of full disclosure, this Oracle has been wrapped up in Apple technology since 1978 and currently owns a long position in Apple stock.
- Uncertain Oracle
