Wednesday, July 1, 2015

Apple Watch Is Part Of A Marathon Not A Sprint

The recent article in Business Insider headlines a weak demand for the first generation Apple Watch.  But like any first generation product, it first attracts an early adopter before the masses descend.  And the masses must see the price-value to take the next step and purchase the product.  With every generation improvement in hardware and software, demand increases and sales grow.  Apple has seen this across their product lines.  The Apple Watch is no exception.

I did not buy an Apple Watch but I expect that it will be a future purchase in a generation or two.  As it delivers more functionality, improves battery life, and demonstrates a need to own, the Apple Watch will gain more customers.  As one analyst states, "Even if the watch is a flop, it doesn't matter. The iPhone is killing it for Apple, and that's how the company makes money. Any sales of the watch are a nice bonus.  It's possible the watch just isn't going to be a major product, at least not right away. It may take years of refinement before it really breaks out."  I believe that the latter is a more likely outcome.

While the meat of Apple is their iPhone product, the connectivity that they create across all their product lines is what turns a consumer into an Apple household.  The iPhone plays best with an iMac, an iPad, and even the iPod.  The connective tissue remains iTunes and the iCloud, syncing and sharing content across devices.  Phone calls, iMessages, photos, music, videos, calendar info, etc.; you name it, they share it.  The Apple Watch is just one more connection to the fiber of the household.

As to what is next for Apple, the release of Apple Music is step one of another revenue stream of music subscription services.  A new Apple TV box would mean the next opportunity for a video streaming service.  And of course new generations and new sizes of the iPhone and iPad.  And when we look back at the Apple Watch product line in 5 years, we may not even recognize what it has become.  There was once a time when a computer was seen as simply a better typewriter in the home.  Not anymore. 

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