Is it even possible
To double a Zero? As in Zero interest in ever owning an Apple iWatch ever?
Blogger and analyst Carl Howe estimates Apple has planned an initial production run of 3.1 million sparkling wrist jobs, and forecasts that the “Apple Watch product line will become its most profitable ever, with gross margins exceeding 60 per cent". In a detailed blog post, Howe does admit however that "in truth, projections …
Phones typically have an 18-month replacement cycle, while watches stay in daily use for decades and even generations.
I suspect the intention is that every buyer of an Apple watch will have to buy a new watch to go with their new phone if they want all the features to work, and to not be more than one generation behind if they want it to work at all. This effectively doubles the price of an already expensive phone. There's undoubtedly a market for these things, but I don't think it's anywhere near the size of the market for just the phones.
This is the problem with the current "smart watch" concept. It's basically an expensive accessory for an expensive phone. When I buy a watch, I expect it to last at least 10 to 15 years, and I buy pretty cheap watches. Now find me a company in the computer or mobile phone business whose products remain 100% compatible for those sorts of time scales.
What it might do though is to undermine the demand for Apple's phones. If the things turn out to be really useful (and I'm not convinced they are), most people will find them unaffordable (witness Apple's long term shrinking market share). If people really want a smart watch to go with their phone, they may simply buy a cheaper phone (e.g. a Chinese Android) and a watch to go with it rather than pay a massive increase in their phone contract to pay for it. After all, if you're not pulling your phone out of your pocket and fondling it as often to see if someone sent you a new FaceTwat message, then who cares what it looks like?
Personally though, I expect the market will be limited once the novelty wears off. The screen on a watch is too small to do much more than display the time, and a regular watch does that rather well already.
I'm utterly unconvinced. But the biggest problem I see is that the Apple watch will only appeal to people who like Apple design. It's basically a minimalist version of the Cartier Tank Watch, and the variants of this (along with the Russian rip-offs), while they include some very nice designs, haven't taken over the world. Do I really want an unusably small screen peripheral with a case that is a copy of something else? Obviously quite a lot of Americans, and would-be Americans, will say yes, but I think your last paragraph is spot on.
And to watch snobs, the Apple watch will just say "I know nothing about watches".
But the history of smartphones and tablets has shown that people are willing to buy rather expensive items if they are sufficiently useful and/or fashionable. With the tablet market winding down and the high-end smartphone market lacking groundbreaking innovations, the smartwatch may be just the thing to pull another grand out of the pockets of those who can afford it.
I had the UC 3100 for a while. It looked a bit like the tracker watch Newt was given by Ripley in Aliens therefore I loved it.
It was pretty rubbish as a data watch but i never got bored of the 'miracle' of being able to type onto my watch screen from a detachable keyboard.
"10K for a smartwatch as an accessory for a phone is probably not so bad for the sort of person who spends a similar amount on the phone"
Eventually those Chinese and Russian multimillionaires are going to have their kids come back from their English public schools and tell the old man that to look good he needs some stuff that suggests he has real taste.
I'm OK with most Apple kit, but I'm not part of the crowd that thinks that digital watches are a cool idea (with excuses to the late Douglas Adams). I don't care which specific finger this analyst has used and where it has been to come up with this number, it doesn't change the fact for me personally that I won't buy one, I really don't see the point.
Quartz watches are a great example of good technology - smaller, tougher, more accurate and far cheaper than what came before.
Quartz analogue versus quartz digital is mostly a UI question. For most time telling, analogue suits me better. There is probably some serious data somewhere (think airforce or NASA studies) about how long it takes a human to grok information from displays.
There is probably some serious data somewhere (think airforce or NASA studies) about how long it takes a human to grok information from displays.
I know from experience that you can translate an angle (analogue) much quicker to a too high/too low assessment than a digital number - that's also why I dislike digital speedometers (I was about to say "speedos", but somehow that conjured up a different image :) ).
Most people I know think the Apple Watch will be a huge success only because "there are a lot of stupid people who buy everything Apple makes for no reason other than Apple makes it."
This is simply not true and it smacks of a mentality common to Microsoft.
Microsoft assumed everybody would buy a Windows Phone simply because they made it, and look how that turned out. They also assumed developers would make a bunch of Metro apps simply because Windows 8 had a Metro mode, and they assumed everybody would buy Surfaces, because who wouldn't want Windows in tablet form?
The idea that probably a billion+ people use Microsoft stuff in some form or another leads to the reasoning that SOME percentage of a billion will do/buy something, so it HAS to be a huge success. And then guess what? Fail.
The idea that there's a large hypothetical group of people who enjoy giving money to Apple for no reason strikes me as similarly too reductionist.
EDIT: I should add that I was recently at an Apple store where they had a bunch of watches on display. The store was PACKED with people looking at laptops, phones, and iMacs, but hardly anybody was looking at the watches even though they're Apple's big new exciting product. The couple of people who were asking about the watch were all pretty old. I wonder if they were simply being influenced by Apple's marketing and thinking that they'll need an Apple Watch to stay technologically literate.
>>Except that in this case, Apple are copying Android...
It is interesting that in Apple's previous forays into new product categories, they brought some novel hardware to the table.
The iPod had its 1.8" hard drives which enabled large storage capacity and small size simultaneously.
The iPhone had its big capacitive multitouch touchscreen.
With the iPad, they just straight up invented a whole new product category.
But with the Apple Watch, it doesn't seem to be any smaller or lighter or thinner or faster or have any ability or property that the competition didn't have a year ago.
I seriously don't know why Apple thinks I should buy their watch over the competition's.
Saw them in the Apple Store yesterday. Not that many people looking at it, certainly not compared to the 5k iMac when it came out. I had a quick look at it, and found it unusable.
I was sceptical about the iPad when it first came out, but I'm using one to type this comment. However, unless there is some really radical change to the watch, I will continue to use my iPhone as my timekeeping device.
Of course it is possible that the Apple Watch will have the highest gross margin of any Apple product. The gross margins on, say, Francis Bacon's paintings were pretty astronomical - if his lifestyle cost him a million a year, he would have been making gross margins of around 97% at one point. But that doesn't mean "Most profitable" in the real world.
I suspect that the Apple Watch has actually cost very little in R&D so the amortisation is not that bad. But, even so, if they only sell a few million it will barely feature in the annual P&L compared to the phones. Casio's annual turnover from all activities is around $4.6 billion, Apple's around $180 billion. And Casio sells vast numbers of watches.
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