Apple Watch – it’s about time, not really.

This past week has been a buzz about watches. Remember those devices? Would sit on your wrist and tell you what time of the day it was, much better than carrying a sundial or an hourglass around. Unfortunately for watches, the emergence of the ubiquitous mobile phone has diminished the primary value of the watch – telling time. With most of us staring at our smart phones between 60 – 90 minutes a day, we can see what time it is with a simple glance to the top of our mobile phone screens. By some studies as many as 50% of mobile phone users have no longer a need to wear a watch. So why is Apple, and by some accounts from Mobile World Congress, so many other technology players coming out with watches? Click here for a good piece on MWC from a fellow Constellation Research member.

Here is why it makes sense – it isn’t about the “watch.” These technology players are all trying to get into this space because they want to make sure they get a piece of the real estate that is being battled over – the wrist. The reality is watch sales (non smart watches) has not gone away and is actually on an upswing.

No one is buying watches? Not so fast...

No one is buying watches? Not so fast…

The fact that mechanical types are growing rapidly would reinforce the notion that watches are not about telling time but about fashion, they are closer to Cartier than to Blackberry. The truth is the best watches for time keeping are the digital quartz watches you can purchase at CVS for $10. An automatic watch from Jaeger-LeCoultre probably doesn’t keep time as precisely as a digital Casio – but if you spend the thousands of dollars on a Jaeger-LeCoultre or an A. Lange & Söhne you aren’t doing it because you look at your wrist for the time. We should not think about Apple and the likes trying to compete in the same space as the Omegas, Baume & Merciers and Patek Philippes are in. Wearables are the next wave of connectivity for consumers and corporations. While we are not about to give up our smart phones, the real estate on our wrists has yet to be fully exploited. Of course we have items such as Fitbits that are already finding their way to our arms. Entertainment giants such as Disney are already leveraging the technology with their Magicband. But what is in play for Apple, Samsung, Motorola etc is getting their platform on us. What is done with that platform depends on where application providers’ imaginations can take us. Some use cases that make this more than a watch:

  • Wellness – think of a Fitbit or a Garmin Vivofit with beefed up computation power. Devices will be able to be even smarter with our health. It will not be just about how many steps we took but how has it impacted our glucose levels or our heart rate.
  • Mobile payment – the wallet is really under increased pressure. Payment can be done by the swipe of our wrist. Since we are wearing the device could we integrate some biometrics to validate that we are the actual user…sure beats remembering all those passwords.
  • Manufacturing efficiencies – Many companies are working with the likes of Google glass to bring a wearable the manufacturing floor. Having a device on the wrist that can be voice controlled opens up the door for an array of manufacturing applications. Adding some valuable functional possibilities in the supply chain.
  • Better pick n pack for warehouse and retailers – Warehouse operations are always seeking to find new labor efficiencies with how they find inventory, pick it and prepare it for shipment. This is also true in retail, especially when more retailers are starting to use their physical stores as distribution centers.

Of course we are still in the early stages of these types of wearables and their use cases. Adoption will be tied to the price, not sure if the $10,000 Apple Watch will be the driver for adoption (if I had that kind of disposable

I would take one of these with the $10k

I would take one of these with the $10k

income for a wrist device, it would be a real automatic watch!). The $349 price point for the Apple Sport Watch should be low enough to get some traction  with consumers.

For the business uses the price point will have to come down further. Much like tablets, when the iPad came out the $500 price tag was too high for much industrial adoption, it was only when Android tablets at lower price points did the tablet become more ubiquitous.

Apple once again has created a disruptive device. Question remains will it, like the iPod, iPhone and iPad, have the same level of adoption for both consumers and business usage? But let us not compare what Apple and others are putting out as a “watch.” It is the correct first letter but it is closer to an Apple Wearable. Just like the iPhone is really more than a phone. It became a canvass for application providers to express their creative services.

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Filed under Consumer Product Goods, Current Events, IoT, Wearables

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