Category Archives: iWatch

Techpinions post: Apple Watch impact on smartwatch market

This week’s Techpinions post is a follow-up to my post from a few weeks ago about market prospects for smartwatches, off the back of my smartwatches report. I revisit my conclusions both from that report and from the previous post in light of Apple’s forthcoming Watch. As you may recall, I’ve been extremely bearish about the smartwatch market absent some major catalyst, and Apple’s entry into the market always had the potential to be that catalyst.

The concluding paragraph from the piece is below:

For all these reasons, the Apple Watch will be just the kind of catalyst I talked about in the conclusion to my report. It won’t drive majority adoption of smartwatches any time soon, but it promises to fix several of the key demand- and supply-side barriers to smartwatch adoption, and will be a huge hit for Apple. At the same time, it will provide a boost to other vendors, who will have to compete largely around the Android opportunity and the lower end of the market. Exactly how big the boost to the market will be is hard to estimate until we know more about the watch as we approach its release. But we could easily go from single digit millions of shipments per year to tens of millions in the wake of its launch.

You can read the whole piece, including the reasoning behind that conclusion, here.

New report and post on smartwatches

My firm, Jackdaw Research, has just published a report for subscription clients on the topic of smartwatches, entitled Smartwatches: Market Prospects. It features several consumer surveys which gauge demand for current and future smartwatch features, and evaluates the current offerings in the smartwatch market. I’m bearish on smartwatches as they currently stand – demand for the features they offer is weak, and that demand is currently being met by weak supply too, as all of the current offerings are flawed by virtue of the compromises they make between battery life, displays, performance and usability. The market is likely to remain small unless something changes – one of those, of course, being a disruptive entry to the market by Apple.

My Techpinions post today summarizes some of the key findings of the report. Here’s a quote:

Measured against these criteria, the current crop of smartwatches on sale does very poorly. I did my own ratings as part of my report, and I ended up with scores which were barely above 50% across these seven categories. Unlike most reviewers, I don’t see the Pebble as the clear leader in this market – in fact, all the devices ended up clustered around a very small range of unimpressive scores. If we’re really honest with ourselves, we should expect much more of these devices before we embrace them, and unless they do more we’re not likely to see them sell above current levels.

The UK’s Guardian newspaper also did an extensive write-up on the report, which you can find here.

There’s more information about the report, and an opportunity to buy it directly, on the Jackdaw Research website. The report is available as part of our subscription research service for clients, and is $500 for non-clients.

Apple will make several wearables, but not a watch

Back in January, I did a post titled “Why Apple may not launch an iWatch anytime soon.” The gist of the piece was this: that Apple doesn’t enter markets particularly early, but rather enters at the point where the technology is ready for it to provide the kind of transformative product it’s used to disrupt the music player, smartphone and tablet markets in the past. At the time, my conclusion was that Apple would likely stay out of the wearables business entirely, until such time as the underlying technology was ready. However, given the other things we’ve seen from Apple in the last few months, I now believe it’s very likely we’ll see something in this category from Apple in the near future, but it won’t be a watch, and it’s likely that it will actually be several products rather than just one.

Smartwatches aren’t delivering on the promise, but the promise is flawed too

There are two big problems with the smartwatch market as it stands: firstly, the underlying technology doesn’t seem to be ready, which means it doesn’t deliver on the promise of the category. But secondly, the promise itself simply isn’t all that compelling for the vast majority of the general population. There’s a sense that if someone can just crack the smartwatch category it’ll suddenly explode, but I’m just not sure I agree with that. It still fundamentally seems like a solution in search of a problem at this point. But the coverage – as is so often the case – is driven by a very small number of people who likely are in the target segment and therefore talk up both the promise and the reality well beyond what’s justified.

A different approach solves some fundamental problems

For all these reasons, I’m still skeptical that Apple will release a product that’s identifiable as a watch. If I think about the thorniest technological challenge with smartwatches, it’s the fact that you’re having to squeeze both a fairly smart CPU and a decent display, and the battery to power them, into what has to be a very small form factor. That problem essentially goes away if you see wearables less as notification screens and more as off-device sensors, as Apple seems to, in contrast to Google:

Android Wear vs Apple HealthKit

If wearables are merely providing sensor extensions to the smartphone rather than trying to replicate smartphone functions, you can do away with the bright, big screen and the powerful CPU, and strip both down significantly. On some wearables, you might retain a small display, but it’s entirely possible that others would do away with it entirely. Put in the relevant sensors, a Bluetooth LE radio and a small CPU, and you’d be done. This would allow you to make the device significantly smaller and sleeker, make the battery last much longer, and also allow for many other form factors that could be worn in different places around the body. Continue reading

Why Apple might break its launch pattern with wearables

Apple has established a pattern over the last six years with regard to releasing SDKs to developers ahead of releasing new software and hardware products to customers. The original iPhone didn’t follow this pattern, not having an App Store and therefore no SDK either. But since March 2008, Apple has given developers several months’ lead time to create apps which are optimized for its newest hardware and software releases. The times between SDK release and customer availability of the related products is shown in the chart below:

iOS SDK to customer availability - 560px

The exact length of time between SDK release and customer availability has bounced around a bit. When new iPhones were released in June, the SDKs arrived first in March, and then in April, slowly whittling down the time available for developers to create apps. Then, in 2011, Apple moved the whole schedule back a few months, with SDK release in the summer, and the new iPhone landing in the fall, and it stretched out the time in-between at the same time, moving it back to around 130 days. The last two releases have both seen exactly 102 days from SDK to customer availability. When Apple last introduced an entirely new hardware category, in 2010, it gave would-be iPad developers just over two months’ lead time.

As we approach the possible launch of new hardware in at least one category (wearables) and possibly two (smart home), it’s worth thinking about how this pattern might apply to these new categories. What’s most striking this time around is that I think it’s entirely possible that Apple has already done the SDK releases that will power these devices, and we therefore won’t see the long delay between the announcement of new hardware and its availability to the public. Apple has already laid the groundwork for new wearable devices as follows:

  • In iOS 7, announced in June 2013 and available since September 2013, Apple tweaked the Notification Center and augmented Bluetooth capabilities to support better off-device notifications, for example on a smartwatch or similar device (Pebble and other third party smartwatches already make use of these)
  • in iOS 8, announced at this year’s WWDC and presumably available in September 2014, Apple created HealthKit and the companion Health app, which can capture data from sensors in wearables and store and analyze them for users.

As such, depending on Apple’s implementation of wearables, it’s possible that it’s already given developers all the tools they need to create apps that will take advantage of whatever Apple releases. There may not be an “iWatch” SDK as such. If that’s the case, we could see the pattern shown in the chart above blown away completely with the release of wearable devices from Apple. Or, put another way, Apple has already started the clock ticking by releasing the SDKs to developers, and now we just need to wait for the other shoe to drop. And of course, if you believe the rumors about the smart home, the very same pattern would apply there – the necessary tools are all already out there in developers’ hands in the form of HomeKit.

If Apple is indeed planning an iWatch rather than something similar, it might need an SDK of its own for the on-device display, but if – as I suspect – what Apple ends up releasing looks a lot less like a watch and more like a much simpler device, then I think all the pieces may already be in place. On Monday, I’ll talk more about why I think what Apple releases might not be a watch at all, and why I think there will probably be several devices rather than just one.

Apple resurgent – thoughts on WWDC

Today’s WWDC keynote was a sign of a renewed swagger on the part of Apple, whose executives seemed to relish the deluge of new product announcements they unleashed on developers and on their customers. In the process Apple established or strengthened its competitive positioning against two major foes – Microsoft and Google – while opening itself up in unparalleled ways to developers. Today’s announcements may come to be seen in the same way as Steve Jobs’ original launch of Mac OS X, in that it lays the groundwork in several areas for years of future Apple products.

The demotion of Google continues

Two years ago at WWDC, Apple removed erstwhile close partner Google from the iPhone in two significant areas: as the backend provider for the Maps app, and in the form of the pre-installed YouTube app. But Google’s last major bastion on iOS is its position as the default search engine in Safari, and it’s much harder to remove there. In the sense of typing a query into a search box or address bar in a browser, hitting enter and being presented with a screen of blue links, Google is unrivaled, and Apple knows that. But it has slowly been inserting itself between the user and that search box over the last couple of years, and today’s keynote provided further evidence of Apple’s pre-empting of the Google search on both iOS and OS X devices.

Apple’s more subtle disruption of the user-Google relationship began with the launch of Siri, which began to address some users’ queries without an explicit search, and which uses Wikipedia, Wolfram Alpha and Bing, but not Google, as underlying search providers. And it has continued since then, as more third party services have been layered into Siri, pre-empting the Google search for movie listings, restaurant reservations and sports scores. Today’s keynote added Spotlight search to the list of places where users will now find answers to their queries without the classic search box experience, thus further inserting Apple between users and Google.

This is potentially significant for Google, for which the US continues to be easily its single biggest and most lucrative market, and for which mobile is increasingly important. To the extent that iPhone users, which make over 40% of US smartphone users, start using Apple and its tightly integrated third party services instead of Google, for search, that’s pretty bad news. That isn’t, of course, why Apple is taking these steps, but it’s an unpleasant side effect for Google. And a great way for Apple to participate in the search business without having to match Google in the page-of-blue-links business.

A device for every need, not one device for every need

Continue reading

Why Apple may not launch an iWatch anytime soon

Everyone seems to assume that Apple is working on an iWatch, an entry in the emerging smartwatch market, and it’s likely that it is. But a secondary assumption has been that this launch must be imminent, because of the other entrants in the market, notably Samsung. However, the history of Apple’s entry into new markets shows that it bides its time, rarely entering right as a market begins, and often waiting until the combination of technologies required has evolved to the point where they’re ready for a truly compelling product. The chart below shows the timelines for Apple’s entry into three previous product categories, those which fueled much of its growth from 2000 to the present:

Apple product timelines Continue reading