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14 April 2015

A moment in time: will the Apple Watch disrupt the market?

With the Apple Watch due to go on sale later this month, the buzz surrounding the new wearable from the tech giant is hard to ignore. Due to appear on sale in the US on 24th April this year, it is the latest contender in the wearable technology arena and it is certainly causing a stir. It is predicted by Neil Mawston of research firm Strategy Analytics that “the Apple Watch is the catalyst to ignite the global smartwatch market.” Certainly, there are many loyal Apple fans who will buy the watch, as they would any Apple product. But global sales of current smartwatches have been sluggish and perhaps it is time to ask whether there is a market for these wearable gadgets.

As the likely trendsetter for smartwatches to come, the Apple Watch is worth examining. The Watch will be available in three versions: the Sport, Watch and Edition. The watch will range in price from $349 to $17,000. The colourful Sport is the least expensive and the luxury, gold-cased Edition is at the upper end of the spectrum. The Edition Apple Watch has been criticised for being designed as a status symbol since only a wealthy few will be able to afford it. Even the cheaper Sport is significantly more expensive that the Apple Watch’s most popular competitor, the Pebble Time, which is priced at only $199.

The features of the Apple Watch range from useful to curious. Obviously, it can tell the time but it can also be used to make contactless payments, manage emails and calls, and has elegant and practical health features. It monitors simple movement, brisk activity and how often one stands. However, to receive incoming calls, messages or notifications, the Watch must be connected to an iPhone5 or newer, thereby limiting its global appeal.

The Watch also has a number of less useful features. These include the Tap feature which allows you to send customised ”silent, gentle tap patterns” to friends to let them know you’re thinking of them. It can send hand-drawn sketches, a stylised visual of your heartbeat or an animated emoji. These features seem more like gimmicks, rather than useful ways to connect with others.

Significantly, the Watch has a lower battery life than many of its Android rivals. Whilst the Apple Watch has a battery of 18 hours, the Sony Smartwatch 3 has a battery life of three days and the Pebble Time has up to ten days’ worth of battery life. Moreover, both these smartwatches are considerably less expensive than the Apple Watch.

Strategy Analytics predicts that Apple will ship 15.4m Apple Watches by the end of 2015 and that Apple will swiftly become the world’s number one smartwatch retailer with 55% global market share. CCS Insight predicts that 20 million will be sold by the end of this year; this figure represents about 7% of the compatible iPhones currently in use. But the forecasts vary widely. Some predict that only a few million Apple Watches will be sold, whilst others suggest figures as high as 60 million.

The question remains whether there is a sustainable market for smartphones. In 2014, a total of 6.8 million smartwatches were sold worldwide. Apple Watch’s most prevalent rival, Android Wear (devices powered by Google but made by the likes of Motorola, LG and Samsung) sold only 800,000 units last year.

These figures suggest that there is not currently a huge market for smartwatches or wearable technology in general. Certainly, smartwatches are a clever way of monitoring activity and health. But for the most part, smartwatches appear to be little more than an extension of a smartphone, an expensive means of telling time. The necessary functions of smartwatches and other wearable technologies need to be better defined to increase appeal.

The Apple Watch is certainly beautifully designed if not especially innovative, unlike previous Apple products, such as the iPad. Yet, hopefully the launch of the Apple Watch will create a sustainable market for smartwatches and other wearable technologies. Then, perhaps, we will see it filled with examples of genuine and enterprising technological innovation, like the Pebble Time, which has a 10 day battery life and is waterproof. More innovative, enterprising and sophisticated wearable technologies could never be considered a bad thing.