A popular narrative around the Apple Watch is that the product is already a failure, proof of the rudderless Ship Cupertino, doomed to sail into a post-Steve Jobs iceberg with Captain Cook at the helm. An example is the Apple troll site produced by Brian Hall, who recently posted a takedown of the Apple Watch. The centre of the narrative was that well-known Apple blogger John Gruber admitted in his podcast The Talk Show that he isn’t wearing his Apple Watch every day.
One challenge in measuring the success of the Apple Watch thus far is that Apple hasn’t been providing sales figures, something it made clear it wouldn’t be doing even before the Watch launched. That’s unique among the company’s major products — iPhone, iPad, Mac — for which Apple provides detailed sales statistics every quarter. Tim Cook made it clear that the information was too valuable at this stage to share; it would help competitors understand just how much success Apple was having and he’d rather keep his cards close for the time being. All Cook would offer in the most recently quarterly earnings call was this: “Sales of Apple Watch were also up sequentially and were ahead of our expectations.”
Imagine, for example, if Apple follows its past playbook and introduces an Apple Watch 2 at the same $349/$399 price as the current models. But as it did with iPad and currently does with iPhone, Apple keeps the first generation models around for lower prices, perhaps $249 and $299. That starts competing more directly with products like the $249 Fitbit Surge and might even get people looking at lower end Fitbits to give the Apple Watch a second look. Suddenly, Fitbit and Park could find themselves being dragged down from behind by the free safety they didn’t check for in their rear view.
Still that’s next year. In the meantime, what doesn’t seem to be happening is much in the way of interesting competition from anyone else. Charles Arthur, the erstwhile technology editor of The Guardian, made an attempt to estimate sales of Android Wear — Google’s equivalent to the Apple Watch sold by a number of vendors — and concluded that despite a head start of more than a year, the total sold to date is below 2 million. Arthur suggests that might not be good for the smartwatch category and he has a point: Today, the Apple Watch is iPhone only and even in the U.S. — Apple’s biggest market by share — iPhones represent less than half of all smartphones in use.
IDC data suggests that only Xiaomi, which sells a fitness tracker mainly in China, has any meaningful share beyond Apple and Fitbit. It measured decent sales for Garmin and Samsung, but together those two are only selling about 1 in 15 wearables. (Notably, IDC thinks 3 in 10 wearables are sold by companies outside its top 5 vendors, suggesting a highly fragmented market that could still anoint new leaders, but also might further consolidate among early winners).
While we can’t say for certain that smart wearables are the next big thing, it’s a rather safe bet that the future isn’t one where you are asked to pay the full price again to turn them into old school timepieces. The designer Marc Newson, who came to work at Apple a year ago, having spent some time designing those traditional watches himself believes that Apple Watch indeed is the next big thing. He recently told the Australian Financial Review
“Look at the iPhone: It was a game-changing thing. And I believe that this product — for many, many reasons people are not aware of because they haven’t thought ahead or they just don’t know — will become a similarly game-changing thing. In five years time I have absolutely no doubt this will be right up there.”
Truly, this is a case where time will tell.