Apple takes leap into new territory with smartwatch

March 8, 2015 by Glenn Chapman, With Rob Lever In Washington
Apple has indicated that the entry price for its watch would be $349 in the United States, and that two different sizes would be available in three collections

Apple's hotly-anticipated smartwatch is expected to debut Monday as the trend-setting firm sets out to make stylish wrist-worn computers must-have accessories for modern lifestyles.

Industry trackers say Apple Watch will star at a media event being held at the same San Francisco theater where the California tech giant introduced the iPad.

Apple's chief executive Tim Cook has revealed little about the sophisticated wrist wear, but has said that he "can't live without it."

The company announced its plans for Apple Watch last year to much fanfare and has said it would begin shipping in April.

It will mark Apple's first new product type since the iPad in 2010.

Apple has indicated that the entry price would be $349 in the United States, and that two different sizes would be available in three collections, including the "Apple Watch Edition," featuring 18-karat gold cases in yellow or rose, sapphire crystal and finely crafted bands and closures.

The Apple device will connect with the iPhone, and also have a range of apps and sensors, notably for health and fitness.

The watch is also expected to include map software that guides people to destinations with gentle "taps" on the wrist.

Fitness apps on the Apple Watch and its rivals could spell trouble for makers of fitness bands from companies like Jawbone, Fitbit and Nike.

"Apple is poised to once again show how computing platforms are won or lost on the one-two punch of eager consumers and hungry ecosystem partners," said Forrester Research analyst James McQuivey.

Apple reportedly had to scale back health tracking features on the watch after some sensors didn't rise to the challenges.

Catalyze, dominate the market

It remains unclear whether Apple— a latecomer to the wearables segment—would do for smartwatches what the iPod did for MP3 players and the iPad did for tablet computers.

People stand before a window display of the Apple watch during the unveiling of the new and highly anticipated product at Saint-Honore street in Paris on September 30, 2014

Apple enters a segment crowded with vendors ranging from South Korean giants Samsung and LG, to Japan's Sony and startups such as Pebble.

Motorola, acquired by Chinese giant Lenovo last year, also produces a smartwatch, and China's Huawei introduced its version at the Mobile World Congress in Barcelona this month.

Pebble, which burst on the scene with a crowd-funded smartwatch in 2012, this month broke the record on the Kickstarter platform with more than $16 million raised.

Research firm Strategy Analytics predicts Apple will set fire to the market from the outset, projecting sales of 15.4 million units worldwide in 2015, to give Apple a 55 percent market share.

"The Apple Watch is the catalyst to ignite the global smartwatch market," said Strategy Analytics executive director Neil Mawston.

"Apple's famous brand, loyal fan base, deep retail presence and extensive apps ecosystem will ensure healthy uptake for its watch."

Still, he said Apple may see a few glitches that need to be ironed out.

"Apple's first-generation Watch is not yet perfect," Mawston said in a statement.

"Apple will need to upgrade tangibly its second-generation watch to stay ahead of competitors later this year."

He noted that rival models are more attractive, have a longer battery life and offer more affordable prices.

The Apple device will connect with the iPhone, and also have a range of apps and sensors, notably for health and fitness

But Deutsche Bank analyst Sherri Scribner predicted an even bigger splash for the Apple Watch, with sales of 17.6 million units this year.

By 2018, Scribner said, one of every four iPhone users will also have an Apple Watch, making the segment worth some $26 billion for the company.

In a research note, Scribner said the Apple Watch should be a "catalyst" to expand the market, with wrist-worn devices gradually becoming a complement to smartphones.

The next big thing?

Others say it's not yet clear if the smartwatch will become the must-have accessory for consumers, particularly if the pricing remains at current levels.

Roger Kay, analyst at Endpoint Technologies Associates, said Apple's loyal consumer base will deliver a certain number of sales but won't guarantee widespread adoption.

"There will be 10 million people who will buy it because it's from Apple," Kay said. "But the larger question is whether this category really has legs."

A key question is whether Apple can create the same kind of buzz and energy around a new product without its legendary leader Steve Jobs, who died in 2011.

"Steve could distort reality and tell everyone it was the next big thing, and people would believe it," said Kay.

"They've never done it without Steve. So this is the challenge for Tim Cook."

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12 comments

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dogbert
5 / 5 (1) Mar 08, 2015
He noted that rival models are more attractive, have a longer battery life and offer more affordable prices.

But Deutsche Bank analyst Sherri Scribner predicted an even bigger splash for the Apple Watch, with sales of 17.6 million units this year.


People will doubtless plop down hundreds of dollars for something they don't need and have to try to find a use for because it is Apple. The larger question is why anyone would spend time and money on any brand of smart watch which has to be charged frequently (daily or more often) and does nothing that your smart phone already does.
Noumenon
3.7 / 5 (3) Mar 08, 2015
I think it may be useful to people who still wear a watch as jewelry, and also to people who are on tight schedules with a lot of communication and don't want to take out their phone so often.
Noumenon
4.2 / 5 (5) Mar 08, 2015
People will doubtless plop down hundreds of dollars for something they don't need and have to try to find a use for because it is Apple.


The strength of our free, capitalist economy, and standard of living, lies in large part in what we don't need, but rather want. I have no problem with this.

If you can be trusted to do a good job consistently people will associate value with your brand name. I have no problem with this either.
btb101
not rated yet Mar 08, 2015
According to Chinese government, they have banned Apple and Cisco items...
http://www.datace...larticle
According to this site... It will take a LOT of gold... like 30% of world production...
http://investment...ction-2/
Moebius
5 / 5 (1) Mar 08, 2015
He noted that rival models are more attractive, have a longer battery life and offer more affordable prices.

But Deutsche Bank analyst Sherri Scribner predicted an even bigger splash for the Apple Watch, with sales of 17.6 million units this year.


People will doubtless plop down hundreds of dollars .......... and does nothing that your smart phone already does.


Ummm, people will lay down money because it does stuff your smart phone CAN'T do maybe? You're right though, people will buy them, and not because they think they are ugly.

The real test for the watch is coming on TV if you watch Jim Cramer on CNBC. He is already in love with it and I'm betting we will see a gold one on his wrist on air as soon as they are available. That is going to be a good test, we will see how long it stays on his wrist. If the watch isn't any good he'll put his Rolex back on. He always comments on Apple so I'm sure he'll be telling us how it's working.
Whydening Gyre
1 / 5 (1) Mar 08, 2015
According to Chinese government, they have banned Apple and Cisco items...
http://www.datace...larticle

Better buy gold stocks or ETF's, then...
antialias_physorg
3 / 5 (2) Mar 09, 2015
If you can be trusted to do a good job consistently people will associate value with your brand name.

I dunno. Apple flies pretty hard in the face of this hypothesis, don't you think? The have very good advertising departments...but that's about all one can say about the 'value' of their products.
Noumenon
5 / 5 (1) Mar 09, 2015
If you can be trusted to do a good job consistently people will associate value with your brand name.

I dunno. Apple flies pretty hard in the face of this hypothesis, don't you think? The have very good advertising departments...but that's about all one can say about the 'value' of their products.


Absolutely not. They don't make quality stuff?

I'm not a "fanboy", but I think it's a bit unrealistically cynical and even conspiratorial to suggest that Apple is the most valuable company in history,... just because people are gullible.

Do you feel the same way about say BMW, who also excelled in quality,... after all you could buy a cheaper car that "did" the same thing?
antialias_physorg
2 / 5 (1) Mar 09, 2015
They don't make quality stuff?

Compard to what they charge? A company that makes 60 percent net profit? Ever seen one of the teardowns on their products? It's overpriced crap that lags behind in every technical aspect.

The only thing they really can do is "eye candy". But that's not the same as quality.

to suggest that Apple is the most valuable company in history,... just because people are gullible.

History is chock full of what kind of crap (political, religious or product-wise) good PR can push on billions of people. Apple just have taken that notion to heart: It doesn't matter whether your product is good. People can't judge stuff they know nothing about. Tell them it's good enough times and they'll believe. What people want is to belong to an elite group. The object of how that is achieved (again: religious, political, or gadget exclusivity) is immaterial.
Noumenon
5 / 5 (1) Mar 10, 2015
They don't make quality stuff?


Compard to what they charge?


The Sam[e]sung Galaxy S6 will cost a bit more than the comparable iPhone 6,... $799 verses $749,... at least over here USA/Canada.

A company that makes 60 percent net profit?


False. A myth. Apple's profit margin is around 24%.

Ever seen one of the teardowns on their products?

Have you ever seen a teardown of their engineering, marketing, and IOS software departments? You're not taking everything into account. The cost of the actual bits and pieces that make up a product are only ONE element associated with making it a reality.

Also, Samsung tends to play "spec wars" to give the illusion that their phones are "better",... i.e. adding capabilities that are pointless,... like 4 X HD on a 5" display.
Noumenon
not rated yet Mar 10, 2015
Tell them it's good enough times and they'll believe. What people want is to belong to an elite group. The object of how that is achieved (again: religious, political, or gadget exclusivity) is immaterial.


As I said I think this attitude is cynical and conspiratorial, and probably due to a lack of understanding of how capitalism in free societies could possibly work. It's much less likely that so many are fools and gullible than that Apple simply makes products that are desired in themselves. The simplest and less convoluted explanation is usually the correct one.

No matter the product from cars to chocolate to hamburger restaurants, there is a legitimate market for 'higher end', better refined products; Apples phones are cut from a single piece of aluminium, and their IOS is simple and refined as well.
Moebius
5 / 5 (1) Mar 14, 2015
Yep, it's too bad Apple makes overpriced crap, it's really hurting their sales and reputation.

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