The one question on everyone’s mind when Apple (AAPL) launches its long-awaited Watch in a couple of months is will it be a category killer? I’m going on record saying it will be, as I did, more or less, when iPhone and iPad launched. But this time it’s different.
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You see, I go so far back to the early days of computers, PCs, tablets, cell phones, even wearables, that after all these years I sort of expect to get it right. It’s a source of pride with me. The problem is that emotions cloud logic. That’s never a good thing.
Also I was still mostly a Windows PC guy back then. I’m pretty deep into the Apple ecosystem now and that’s got me a little worried. I’m concerned that I might not be as objective as I used to be.
Who am I kidding? This is an opinion column. Commentary. It’s not my job to report on facts. It’s my job to tell you what I think. Don’t get me wrong; I can be objective. Just not here.
Actually, I’ll let you in on a little secret. I do so much like being right that I doubt I’d ever let anything get in the way of that. Also I’m a pretty logical, grounded, left-brain sort of guy. And when it comes to this category, it doesn’t really matter whose platform you’re into since nobody’s actually got an Apple Watch.
So instead of guessing at which features or apps might turn out to be the ones that make this a must have gadget, let me give you the logic behind why I think it’s going to be a category killer. You may not agree with it, but at least you know the motivation behind it. I like to be right. So far, that’s worked out pretty well (fingers crossed).
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It’s too important not to be
Wait, I know what you’re thinking: that’s the lamest excuse for a reason you’ve ever heard. Well it’s not and I’ll tell you why. You’ve got to understand the mindset of guys like Apple CEO Tim Cook and design guru Jony Ive. These guys love Apple. They live, eat and breathe Apple. And they’re very, very good at what they do.
And believe me when I tell you, they are very much aware of how much is resting on their shoulders and riding on this particular product. They know -- and when I say know, I mean they know so deep down beneath the layers of gray matter that they dream about it -- that this is the first new from the ground up device without Steve Jobs.
Remember what happened the last time investors got anxious about whether the company lost its innovation mojo when it lost Jobs? Apple lost a few hundreds billion dollars of market cap, that’s what. They do not want to see that happen again, not on their watch (no pun intended).
Besides, two years ago Cook agreed to forfeit up to a third of his stock-based compensation if Apple underperforms relative to the rest of the S&P 500 over an eight-year period. In other words, the guy’s got more than $100 million at stake. Bet you forgot about that.
There is simply too much on the line for them to screw it up.
It’s a key differentiator to drive iPhone sales
Analysts and pundits are all pondering whether the decision to tether the Watch to the iPhone was a smart one or not. They don’t get why Apple would limit its target market to just a fraction of smartphone users. They think it’s a missed opportunity to sell Watch to Android users.
Well, they’ve got it wrong. They’ve actually got it backwards. Think about it. The crown jewel of the Apple kingdom is the iPhone. That’s where Apple derives the majority of its revenue and profits. That’s the core of Apple’s ecosystem (no metaphor intended, either).
Selling Watch to Droid users isn’t nearly as important as using it as bait to attract competitors to iPhone and iOS. Apple’s goal is to get Droid users to iSwitch. And if the Watch’s innovation is far enough ahead of the competition that it takes a year or so for Samsung to clone its features, that’s a potential king’s ransom in market share gains.
Granted, the device still has to deliver the goods. We’ll get to that in a minute.
The Apple ecosystem has critical mass
In 2001 the Apple ecosystem consisted of iTunes. Today it also includes HomeKit, HealthKit, Car Play, Apple Pay, App Store, and now, WatchKit. Droid may have more market share but iOS is the premier platform with the highest quality apps and developers that represent an enormous flywheel that’s picking up speed.
There are so many “smart” movements afoot it isn’t funny: home automation, health and fitness monitoring, mobile payments, identity authentication, smart cars, smart wearables, and of course the long-awaited Web-TV convergence. There’s even a partnership between Apple and IBM deploying vertical apps into the enterprise.
That means developers will flock to the Apple Watch and that means hot apps, momentum, and market share.
The future is hands-free
I don’t think anyone can predict Watch’s killer app or apps or which features might make it a must-have product, but I do know a hands-free device is destined to be a big part of your life and mine because life is better with two hands than one, simple as that.
Success in this category is really a question of coming up with a typically (for Apple) iconic blank slate device with an innovative interface, a flawless OS, and powerful, state-of-the-art hardware, and letting third-party developers do the rest. That’s exactly what Apple did with iPad.
Although nobody’s spent much time with Watch, it certainly appears to have those same bases covered, meaning it should have the same impact on the nascent wearable market. That’s why I think it will be a category killer plus a big differentiator for iPhone and a significant driver for Apple’s growing platform.
If that’s a convincing argument, and I think it is, then it’s a first since it doesn’t name a single device feature or function. And I stand by that analysis 100%. We’ll see if I’m right … again.