To say there’ve been a few rumors about Apple’s first foray into wearable tech would be the biggest understatement since someone said the iPhone was useful. With everyone hoping and wishing for an iWatch, there’s been nothing from Apple on the topic except for a few possible patent applications and some talks with Nike about their FuelBand.
In recent years Apple has been very tight when it comes to releasing new technology, choosing rather to upgrade what they already offer. While this has led some to believe there’s a lack of innovation at Apple, it should rather speak to their want to only release the best products possible.
While the idea of an iWatch is intriguing, especially for those of us in the tech world, this is a case where the idea of a device trumps the actuality of it. Sadly, we may never see an iWatch and here’s why.
No Add-On Sales
It’s no secret that Apple designs products to sell services and digital goods. The iPhone and iPad are sold and updated the way they are mostly because of the App Store that lives on each of them. The Mac App Store was touted as a perfect solution for OS X users, but at its core is another revenue stream for Apple. While this is far from a bad thing, as we all get a solid benefit from our apps, it shows that Apple only creates new products that make them money far after the credit card bill for the device itself is paid off.
Unlike Apple TV with it’s iTunes connection and iOS devices with the App Store, the iWatch would have very little add-on purchases that could be made after the device it bought. This means that it’s not likely that Apple would put a large amount of development time into the device if there weren’t a long-term profitability solution.
Design vs. Functionality
Most watches today are bought for their looks far more than they are for their ability to tell time. A $1,000 watch will tell time just as well as a $15,000 Rolex, so why do people pay that much more? This comes down to both looks and bragging rights, but goes to show that watches are more about looks than function today.
The problem with smart watches hasn’t been their functionality, but instead their looks. Smart watches like the Pebble and the Samsung Gear 2 are great at features, but severely lack in looks.
To add in all the features that would make a smart watch worth the purchase, it generally has to be large enough to house the components as well as a battery that will give the iWatch enough life to last more than a day. This size is a major turn off, and one of the reasons that smart watches haven’t caught on with the enormous iPhone market yet.
Ah, the double-edged sword that is new technology. While we all like to get as much use out of our tech as possible, we still love to get something new and shiny. It’s all we can do to wait for our cell phone contracts to be up so we can get the new and substantially more powerful iPhone, but do we really want to trade watches in this quickly too?
On top of this, the iWatch would ideally have an expensive price tag on it, making it fit more into the long-term purchase category instead of the short-term as other iPhone add-ons do. All this together means that the iWatch could actually hinder iPhone and iPad upgrades, further hurting Apple’s bottom line.
Overall, the iWatch is a great idea for consumers if we ignore the details. Once we see that Apple is in the market of making products that make them money more than just making products we love, it’s a pretty safe bet that the iWatch is never going to happen.
Fact-check, though. What portion of Apple’s revenue comes from its main hardware–iPhone, iPad, iPad Mini, MacBook Pro, MacBook Air– and what from accessories or app rake-offs? If I’m not mistaken, the bulk of its money comes from the hardware! The App Store and Apple stores do generate gobs of $, but it’ she main hardware that produces the most bucks.
If true, and I believe it is, then an iWatch makes great sense. In fact, the iWatch also could lead to more people going to Apple stores, more accessories, an entire category of iWatch apps, etc. So, there would be a synergy, too.
No question by that accounting–iWatch is on its way– the question is not whether but when!
They made $2.2B from the app store in 2013, and $7.3B total. That’s a pretty good portion of income.
You did have a strange way of calculate iTunes store (App AND Music AND Movie ) account for 11% of revenu not 30 %… So App Store would be even less.
Any update on this piece about the Watch being here ?
“Unlike Apple TV with it’s iTunes connection and iOS devices with the App Store, the iWatch would have very little add-on purchases…”
Seriously? You don’t think the device would be able to run apps? You don’t think there will be a plethora of health, communication, productivity, mapping, and all manner of other apps that would have special utility on a device worn on the wrist? You don’t think there will be connectivity between the watch and iPhones, iPads, and Macs? What about Apple TV and AirPlay? How about iBeacon technology–you think that’s designed *just* for the iPhone? You remind me of people who thought the iPad would fail because it was “just a big iPod Touch.”
“The problem with smart watches hasn’t been their functionality, but instead their looks.”
Yes, Apple has a *terrible* track record of taking markets filled with poorly-designed devices and making them look cool. That could *never* happen with a watch.
“To add in all the features that would make a smart watch worth the purchase, it generally has to be large enough to house the components…”
Which is why Google Glass weighs 2 pounds and requires a backpack to… oh, no, wait, that’s stupid. Apparently you have never heard of cloud computing.
“…do we really want to trade watches in this quickly too?”
Depends on the price point and the value of new generations of technology. Just a decade ago people were buying new $500 iPods fairly frequently. Nor does a product need a 2-year rollover to be profitable; I could imagine buying a new watch every five years if it were appealing enough.
“… the iWatch would ideally have an expensive price tag on it…”
“Ideally”? And how much would that be? Nobody knows. However, Apple has shown a great deal of aptitude at finding a pricing structure that allows for large profit margins, but somehow still brings customers back for regular purchases. People look at Apple’s prices and say, “That’s too expensive! Nobody’s gonna pay that much!” and then Steve Ballmer looks like a complete idiot a few years later.
All in all, this article is very poorly thought-through. Good click-bait, though–all that this article is good for, I’d think.
At least I can see you read the entire article, which is a good thing! If I disliked an article as much as you obviously disliked this one I would have stopped halfway through.
I’d agree that the idea is poorly thought out if I was the only person who believed this, but there are quite a few other opinions out there that coincide with mine. At the base of this article I just said I don’t believe that a product that hasn’t even been announced yet will probably never come out, that’s all.
While Apple has a pretty great track record lately for releasing winning products, this is one that is just an Internet pipe dream for now, I’m just pointing out why I think it will stay that way.
“I’d agree that the idea is poorly thought out if I was the only person who believed this…”
Umm, more people thinking something does not increase the wisdom of the thought. It just means that more people are thinking poorly.
“…this is one that is just an Internet pipe dream for now, I’m just pointing out why I think it will stay that way.”
And now? ;-D
I think the only safe bet is that you don’t have a clue what you’re talking about.
Ha, well, you’re totally open to your opinion. Why do you disagree with my point of view?
The description of Brian is correct: He IS a “nut” and TOTALLY clueless. Drinking all that craft beer has made him severely loopy …
Low blow, and unacceptable. Brian wrote this opinion piece, and you’re totally welcome to disagree and voice that out, but please do so in a constructive and respectful manner.
Jeff, thanks for the comment. Why don’t you let me know some reasons that I don’t know what is going on in this article? I have facts, figures, and historical information to guide my viewpoints in this, what exactly do you have?
Also, I’m not even sure what your viewpoint is, but I would love to hear it. I’m guessing this means you vehemently believe an iWatch will be released, but have no clue exactly why you believe it.
Brian, I absolutely agree that there is no iwatch coming out. The rumor was started by some bloggers and fueled by the fact that Apple has filed for a patent.
In two years time, when people have finally given up on this nonsensical rumor, you will at least be able to say “I told you so”.
Thanks! I really didn’t want to make a link-bait article, this is just what I feel is going on with the industry. While we’d all love it, I think the time is passed and it just won’t happen.
“It’s no secret that Apple designs products to sell services and digital goods. The iPhone and iPad are sold and updated the way they are mostly because of the App Store that lives on each of them. The Mac App Store was touted as a perfect solution for OS X users, but at its core is another revenue stream for Apple. While this is far from a bad thing, as we all get a solid benefit from our apps, it shows that Apple only creates new products that make them money far after the credit card bill for the device itself is paid off.”
Wrong. Although Apple makes a fair amount on iTunes, services and accessories, their main revenue earner and profit is based on hardware sales.
Obviously at this late date, after the Apple watch has been released, it’s easy to say your prediction was wrong but what you ought to do is reread your own articles point by point and give it a reality check against what Apple did to develop this product, including a very significant R+D investment to develop not only a product but technology and software, for a product range unlikely to create the returns of a phone or (higher priced) PC,
Just my 2 cents: Apple cracked the code for form, function and style with this product, and soon we will see the Android imitators.
Waaayyy the Apple Watch came out