The Apple Watch hasn’t exactly been the success the iPod, iPhone, and iPad initially were (though to be fair the iPhone and iPod weren’t that great the first year either); with demand matching that of the iPod's currently, and Apple apparently rushing to get a revised model out the door, things aren’t looking good for this product. That said, I’m not convinced it is really dead, and given it took three tries to get the iPhone and iPod to overcome their initial issues, there is good likelihood that by the third version Apple will have a winner. But let’s look at why the Apple Watch isn’t doing well now.
No Magical Name
A lot of the reason that the iPod, iPhone, and iPad did well was that they were presented as amazing magical products, and their names reflected that uniqueness. The iPod could have been called the Apple MP3 player, the iPhone the Apple Phone, and the iPad the Apple Tablet. Steve jobs instead created a naming convention and built the words “amazing” and “magical” around it. In fact if you were at the launches he would use those two words over and over again describing the products and we tend to get programed by repetition so that by the time the iPad launched we likely saw the product, even before we heard Steve Jobs’ voice, as “amazing” and “magical”.
When they broke the convention and decided to go with Apple Watch rather than iWatch they lost a lot of that trained response we have to “i” products and, like Apple TV, the excitement was far lower.
This has always been a huge problem because while the iPod, iPhone, and iPad product came from relatively recent product classes (MP3 players, smartphones, Tablets) watches have been around for well over a hundred years and folks were largely deciding to give them up when the Apple Watch launched. Watches historically weren’t bought all that often at price points over $100 even in their prime and the expensive ones were passed down for up to four generations. The Apple Watch starts at over $300, will have trouble remaining in use for three years—not three generations—and the iPhone had largely replaced the watch for its primary time and date function.
In short the Apple Watch is, in many ways, like the iPod is to the smartphone, capable of doing a few of the things the smartphone does but often not as well. In fact, if you think about it, the first Apple Watch was really the iPod Mini with a wrist strap which, like the iPod itself, rolled into the iPhone over time. Wouldn’t the equivalent of a Pocket Apple Watch be basically an iPod touch?
I’ve been covering smartwatches for some time and one of the big early potential customers for this concept was the U.S. military. However the prototypes that were created for them had smartphone sized screens and they went on the inside of the wrist, not the outside. In fact a lot of us who have smartwatches increasingly wear them on the inside of our wrists because unlike watches, it is more important to be able to see the screen than it is to show people you have a cool watch. If you are carrying something, holding a steering wheel, or just touching the screen it is far easier if that screen is on the inside of your wrist rather than the outside.
This allows you to move to a much larger screen as well which means you could at least approach the screen size of the original iPhone and that would make the entire solution far more capable—more like an iPod Touch on your wrist.
The reasons the Apple Watch isn’t doing well are that its name works against it, it likely should have come before and not after the iPhone, and we wear it like a watch, not like the amazing new device it should be. I expect that by the third version Apple will find its stride with this product or send it to the great Apple graveyard in the sky.
President and Principal Analyst, Enderle Group
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