Mar 12, 2015

Apple Watch interpretations

Ever since the Apple Watch was first introduced, there have been speculations about its impact not only on our lives, society or the wearables market as a whole, but also on how it may (or may not) affect the Swiss luxury watch market. No we know that Apple's watch will be offered in a 17k USD version, these thoughts have been fueled again. There are some interesting takes here:

1. This great Wired article points out that a company with a 700 billion USD valuation (that may want to reach the trillion) cannot focus on 400 USD products anymore, since it would have to sell its product to basically every middle class household in the world to achieve a measurable impact on its company value

2. This would mean that me may see some high end TVs, but will definitely see cars from Apple.

Business Insider shows how huge the market is  
And reportedly Apple shareholders are pushing them to buy Tesla.

3. Personally I find it a very interesting experiment to go into a top luxury market with a product that will be outdated in 2, max. 3 years time. Since luxury watches last forever - boiled down in that wonderful Patek Philippe claim "You never actually own a Patek Philippe. You merely look after it for the next generation" - the Apple Watch cannot make a promise that would be even close. I didn't read about Apple providing the generation 2, 3, 4 and 5 technology to be somehow built into the 17k USD edition you may have bought in April 2015, so basically in 2018, you will get a Huawei, LG or Pebble watch for 150 USD that will be a way better piece of technology. You won't be the dude with the expensive watch, but the idiot who could also be playing games on a gameboy. For the first time, Apple (or any digital tech with a certain market impact) does not scale the price of a product by its technological features, but purely by materials, bound to a technology that will be obsolete in a very short period of time. Besides sheiks, oligarchs, rich kids of instagram, Floyd Mayweather and drug lords, it will be hard to find a market, but maybe that is already enough to achieve that huge margin uplift that is needed according to topic 1) of this post. The Verge provides a nice overview about the clash between what the Apple Watch is and does, and the reasons why people (at least up to now) spend fortunes on luxury watches.

By the way, I have had a Pebble and an LG watch and sold them both. If I get a notification about something that's important, I take out my phone. If I get one that's not important, I am stressed by a vibrating watch and constant notifications. Unless I can (in Germany) actually pay with a smartwatch, unlock my DriveNow car and my hotel rooms (without being locked out because of a battery that runs out) and more of those "physical advantages", I don't think a smartwatch really adds a good user experience, a sense of luxury or freedom to my life. But that's me, based on experiences with stone age devices.