What the Apple Watch Means for the Industry

Last September, Apple created waves when it announced it would start selling a smart watch in the spring of 2015. Dubbed the Apple Watch, the device uses built-in sensors to monitor the wearer's biometrics and connects via Bluetooth to the iPhone for Internet and telephony applications. Users can run a wide range of applications on their watch—everything from initiating a simple phone call or responding to text messages, to more advanced features like asking Siri to display traffic conditions for the commute home or making NFC point-of-sale payments.

What does this mean for electronic engineers? For the rest of the supply chain? For the electronics industry? Is this the moment we've all been waiting for, when wearable tech is adopted by consumers worldwide, creating new demand for other wearable devices? Or is excitement around the Apple Watch a false indicator of consumer demand for wearables because of the unique place Apple occupies in the market?

Recent polls reveal a divided state of affairs for wearable technology: while nearly half of Americans claim to want more wearable devices, a third of those who have owned a wearable device stopped using it within the first six months. How can this contradiction be explained? One clue lies in the evolution and decline of one of the most popular categories of wearable technology: dedicated fitness trackers.

With their promise of making it fun to get in shape, dedicated devices from Fitbit, Jawbone, and Nike FuelBand achieved significant success over the past two years, but signs now point to a decline in future growth. A major factor is the role of smart phone convergence: what need is there for a dedicated fitness device when there's already an app for that which will run right on your phone? Just as the inclusion of GPS in smart phones killed the market for dedicated GPS devices, the expanding feature set of contemporary smart phones is now rendering dedicated fitness trackers obsolete.

With this in mind, Apple is ahead of the game by making a watch that is essentially a nice-looking peripheral for the iPhone. Remember, the Apple Watch needs to be tethered to a compatible iPhone or it cannot deliver any of its promised functionality. With over 300 million iPhone users worldwide, it has a huge addressable market of Apple Watch users. And that only takes current iPhone users into account—who knows how many more consumers will switch to the iPhone from other platforms because of the Apple Watch?

This has several implications for electronic engineers and, in turn, for the supply chain.

The first is that wearable tech need not exist in self-contained packages: consumers will be just fine with the idea that such devices will rely upon the functionality of their smart phones. This frees new wearables from a number of constraints, allowing designers to focus on the areas that truly matter, especially better power management and optimized form-factor convenience.

Most smart watches, including the Apple Watch, require daily recharging. Since the next generation of wearables will exist primarily as smart phone peripherals, engineers can offload processor-intensive, energy-draining tasks to the phone's CPU and optimize wearable devices for better power management. This should result in extended battery capacity and lengthier intervals between charge cycles.

Form factor convenience refers to the advantage offered by wearable devices over smart phones based on the wearable device's unique physical location and user interface. It's true that some of the applications planned for the Apple Watch could easily run on the iPhone – Apple's NFC payment system comes to mind – but the most exciting applications are those which utilize the Apple Watch's unique form factor, such as its real-time heart rate monitor.

Short of holding a heart monitor-equipped smart phone in your hand all day, one is hard pressed to describe how such an application would work on a phone. Applications like these simply make more sense when executed in a wearable device. Adopting an “app first” frame of mind rather than a hardware-centric approach will help electronic engineers build the next generation of wearable devices.

What ripples in the electronics pond do you see the Apple Watch making? Let us know in the comments section below.

1 comment on “What the Apple Watch Means for the Industry

  1. AnnaEverson
    August 9, 2018

    Despite the fact that I myself am an Android user, I believe that the operating system of IOS is quite good. And the creation of a kind of closed “ecosystem” between different gadgets of the company Apple – it is useful from the point of view of marketing.

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