As we head into 2015, there’s only one really big mystery in the technology industry — how will the Apple Watch sell?
There’s always going to be other mysteries and surprises, but for the most part, we have a sense of how things are going to work out for the other companies.
- Google will do Google-y things.
- Facebook will keep cranking.
- Twitter will fight to get new users.
- Amazon will keep losing money.
- Microsoft will keep evolving to fit Satya Nadella’s vision.
And so on, and so on.
But, the Apple Watch is a real mystery. Nobody has a strongly convincing opinion on how’s it going to do.
Analysts are all over over the map. Gene Munster thinks Apple will sell just 10 million units. Katy Huberty at Morgan Stanley thinks Apple will sell 30 million units. Apple has reportedly ordered 30-40 million units.
Part of the reason that people have questions about the Apple Watch is that Apple’s announcement for it was unfocused.
After the watch was revealed, Ben Thompson, a normally level-headed analyst, wrote at his site: “We never got an explanation of why the Apple Watch existed, or what need it is supposed to fill. What is the market? Why does Apple believe it can succeed there? What makes the Apple Watch unique?”
That seemed to be the big problem. Apple’s on-stage demos didn’t show much of a reason to own the watch. It doesn’t do much that makes it standout versus just owning a smartphone.
Plus, Apple contradicted itself during the event. It showed the digital crown on the side of the watch as the primary way to interact with the watch. It said that using a touch screen didn’t make sense since your fingers would cover the screen. But then, Apple SVP Kevin Lynch started using the touch screen to navigate the watch.
Apple muddled things further by saying the watch would be out in “early 2015”. Who knows when that might be. Reports said Apple was aiming for February, but then the SVP of retail Angela Ahrendts said it would be out in the Spring.
It also said the entry level price for the watch would be $US350. But there are three different “collections” of the watch — the Apple Watch, the Apple Watch Sport, and the Apple Watch Edition. The price for the top of the line Apple Watch could be up to $US5,000.
There are other lingering questions…
How is Apple going to sell this thing? On Apple’s website, it says there are 18 versions of the “Apple Watch” edition. It says there are 10 versions of the Apple Watch Sport edition. It says there are 6 versions of the “Apple Watch Edition” edition. That’s 44 different models! How is Apple going to get them all in the store for consumers to test out?
Then there’s the question of how it looks. “Apple didn’t do itself any favours with its press images,” said one analyst we recently talked to who was at the event. He says the watch looks good in person, but admits the online images don’t make it look great. This is probably muting some of the excitement around the watch.
And finally, and most importantly, no smartwatch has set the world on fire. People expected Apple to deliver a clear vision of what a smart watch should do. Instead, it offered a hazy vision that largely echoed what was already on the market. So, it’s hard to figure out how Apple’s watch is going to be a breakout hit.
From a financial perspective, Apple doesn’t need the Apple Watch to be a massive hit. The iPhone is all that matters. As long as the iPhone is cranking, all is well with Apple.
However, there is a psychological component to the watch’s success. It is the first product that Apple designed from scratch without input from Steve Jobs. It is Tim Cook and Jony Ive’s first major statement as a duo. If it flops, it would give investors some reason to doubt whether or not Ive and Cook can lead Apple in the future as it searches for the next major computing platform.
Personally, I think we won’t get much of a real answer on the Apple Watch next year. I think the watch will sell well in year one as Apple’s faithful scoop up the watch. In year two, we’ll get a sense of whether people really want a smart watch.
But, either way, expect a lot of debate around the watch in the first three months of next year, as anticipation builds for its actual release.
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