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Apple Watch: Build It & They Will Come… Or Will They?

The Apple Watch, one of the most anticipated and supposedly game-changing wearables in the tech industry, has arrived and, obviously, it has not met Apple’s sales expectations.  In fact, that may be why Apple has not released the initial sales figures. The market is still trying to decide: Is this product a winner or a loser?

My verdict: It is not a winner yet—and it may never be unless it proves it's value. However, it is a marvelous piece of jewelry and a technological masterpiece. This intriguing gadget fully embodies Apple's design philosophy, and demonstrates keen attention to Apple's commitment to a better user experience. I would say that it is a very well executed and well-made product.

Apple is the only one of the few smart watchmakers that understands that a watch is not only a status symbol but also needs to reflect the personality of the wearer. Unfortunately, the electronic nature of the watch means that it cannot begin to compete with its high-end mechanical counterparts.

The high-end watch landscape

If you spend a few minutes in some watch forums, you will understand how much some people are obsessed with their watches: spending time admiring their watches, taking pictures of their watches, bragging about their watches, sharing those pictures, and dressing the watch with many different bands. It's also evident that they do a huge amount of research prior to making a purchase. The watch becomes a cherished possession that gets gifted to the next generation, especially Rolexes, Omegas, Pateks and even some Seikos.  These individuals see a watch as a wise investment, since a Rolex holds its value.

Mechanical watches are pretty much eternal. They need little maintenance and come to life once they are worn again after being stored away. There are watches that are running like new even after 60 years.  Meanwhile, Divers watches keep running in the face of abuse, from mud to water, and still are stylish enough to be an attractive accessory on a formal occasion.

High tech rather than high end

That's the problem with the Apple Watch: the technological nature of it means that it will be outdated quickly. The high-end audience that might shell out the hefty price has questions: What do I do once it is watch functions slow down? How do I upgrade? That actually creates an interesting problem to solve and this could be another blog post.

Any spectator of the Apple Watch wearable unveiling probably harkened back to the first iPhone launch by Steve Jobs. In that moment, Steve Job's ingenuity was evident—just as this newest offering shows off how difficult it is for Tim Cook to fill Jobs' shoes. We can even argue the differences between an Entrepreneur and a Manager.  When I started my pursuit of an MBA, I told the professor that I had joined Georgia Tech in hopes of learning how to start my own company. It was a good start.

Then I got introductions to the folks at Advanced Technology Development Center (ATDC), a leading incubator for startups. The first lesson I learned:  Find a problem to solve, find the person plagued by that problem, he'll stalk you for the solution, and all you need to do is solve the problem so well that it will be easy for him to adopt, and adopt to, the new way of doing things. Take the example of iPhone. When the product launched, it did three things very well: 1) making calls, 2) supporting email (that cool touch screen), and 3) browsing the Internet. All three were available on a single, aesthetically pleasing device. Then, of course, the app store emerged and it exploded from there. The real adoption of the iPhone happened only because it did those three things well—and those were things that everyone wanted to do.  Until then, though, they couldn't have imagined a device to manage it all. That's where the ingenuity of Steve Jobs shone. Like Henry Ford said about his motor car, “If I had asked my customers what they wanted, they would have said faster horses.”

Solution in search of problem

Now, fast forward to 2015 and the Apple Watch. This new product is missing that core. It is going to get a nice app store, it looks really beautiful, it has great technology, but the question remains: what is the problem it is solving for people? Which is a big question mark? And nobody seems to have an answer for that yet.

Now, I'll admit it: I look for value first. Even when the very first iPhone was launched, I bought an Android (HTC Inspire) because I wasn't convinced that iPhone was worth its price. After a year or so, I was able to upgrade to the Samsung Note. The experience proved horrible, since I couldn't browse the Internet using more than two windows. Then I switched to Apple, because my wife liked hers so much. (Apologies for my digression here, we found out that women like their iPhones more than men during the MBA program when were researching for an assignment.)

I was amazed at how easy it was to use and struck by the overall build quality, both from a hardware and software perspective. Then, I started using Macbook Pro, and even bought an iPad for my daughter I'm now solidly a fan of Apple products. Now, I firmly believe that the Mac pays for itself just in terms of the time saved not working on Windows glitches. I love Apple products and have great respect for people that make quality products. Having said all this, I am not sold on the Apple Watch yet.

Somebody has to come up with the killer app that makes the Apple Watch a compelling buy. I have some thoughts on what that might be. Maybe the watch could monitor and share the data on physical activity to insurance providers—and give the wearer access to an insurance premium discount for a proven healthy lifestyle. In that case, it could be an attractive option for enterprises to encourage employees to be more physically active. At the same time, I still prefer to wear the watch out of my own volition and not because my employer is forcing me to.

I could even imagine it as a perfect tool for parents who want to stay in touch with kids. I could buy one for my daughter and get in touch any time to check in on her—but that would also require an iPhone so it would be an expensive proposition. Clearly, that's not a game-changing scenario. So what is that killer app for the Apple Watch?

Looking at the entereprise

In an ideal world, we would figure out how the Apple Watch can be leveraged in the Enterprise, especially in the supply chain. I'd love to hear your thoughts. Could we give an Apple Watch to the distribution center manager to alert them when important shipments arrive or leave the distribution center?  Would that help build a solid value proposition and clear return on investment (ROI)? Clearly, enterprises don't pay for “cool,” only for real value.

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4 comments on “Apple Watch: Build It & They Will Come… Or Will They?

  1. Slotblog
    May 13, 2015

    “The Apple Watch, one of the most anticipated and supposedly game-changing wearables in the tech industry, has arrived and, obviously, it has not met Apple's sales expectations.”

    For this assertion to have any credibility, one would need to know a) Apple's sales expectations and b) Apple watch sales numbers to date. You've already admitted Apple “has not released the initial sales figures”. Care to cite a factual reference to Apple's sales expectations in support of your “obviously” assessment?

    Presenting surmise and conjecture as fact is poor and misleading journalism and does you no credit.

  2. Hailey Lynne McKeefry
    May 13, 2015

    Hi Slotblog,

    The gap between the pre-Apple Watch hype and actual sales is well documented:

    http://247wallst.com/consumer-electronics/2015/05/02/apple-watch-sales-failure/

    Apple earnings: Watch disappointment could hit stock this year

    The Apple Watch Isn't Here Yet, But The Battle Over It Has …

    We would argue that there is general agreement in the marketplace.

  3. puga2006
    May 13, 2015

    Good journalism is saying the right thing and writing the right thing, irrespecitve of any bias to whatsoever, whosoever and however big or small the parties involved are, and that is exactly what I have done.

    So far totally there have been 700 million iPhones sold, (this includes the scenario where the same person bought multiple phones/upgrades) and about 300 million iPhones in use.

    If I were a CEO of such a company, designing a new product under my leadership, especially with that product being my first real product that is conceived, designed, developed and manufactured completely from scratch under my leadership, I want it to be a blockbuster, especially after hiring a former CEO to be a key leader that is guiding this product rollout, I will want to sell at least 5% of my iPhone user base, which would turn out to at least 10 million, even if we assume the total # of iPhones that are in use are about 200 million, but compare 1 million with 10 million, that is way too less, which says something, also looks like a good majority of the people that bought the Apple Watch are this nouveau riche Chinese, who bought it more for brand prestige rather than the device really solving any of their problems or making their life easy. 

    Again the spirit of this discussion is to make the world a better place for everyone and nothing else. It looks like the Apple watch team drank too much of their own coolaid and made this product, instead of solving a real pain or improving user's life in one way or another. I would think huge orgs like Apple will spearhead a righteous path, set an example for the rest of the world by doing the right thing.

    Would be interesting to see the Apple Watch outstanding orders count?

     

     

     

  4. Slotblog
    May 13, 2015

    Quoting from the link Ms. McKeefry kindly provided, with highlights:

    “It was bound to happen: forecasts of poor sales of Apple, Inc.'s new smartwatch early on after is launch. This is according to a preeminent observer of Apple numbers. The negative comments came from wildly regarded UBS analyst Steve Milunovich. If he is correct, Apple faces its first trouble in a very long time

    Apple Watch early results, if Milunovich is correct, could mean that wearable devices, particularly smartwatches, have come to market too soon.”

    Your leading sentence “The Apple Watch, one of the most anticipated and supposedly game-changing wearables in the tech industry, has arrived and, obviously, it has not met Apple's sales expectations” states a conclusion not supported by factual data available to you.

    And that is not responsible or accurate journalism… in my opinion.

    Whether your conjecture regarding the Apple watch is accurate or not is irrelevant to the point I wish to make.

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