I have been looking at the iWatch story from the software side. What are the killer apps that will make us all feel we need to have an iWatch? But if we flip the perspective around and look at what Apple needs to happen, the case for the iWatch becomes instantly compelling.
Bloomberg analyst Anand Srinivasan has compared the watch market to the TV market, the other likely product category that Apple could launch into next. Although the global TV market is larger, at $119 billion compared to the watch industry’s $60 billion, profit margins on watches are about 60%—four times greater than on TVs. Bloomberg quotes Citigroup analyst Oliver Chen as saying, “This can be a $6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod—something consumers didn’t even know they needed.”
Okay, we’ve heard that old Steve Jobs chestnut a few times too many, but the combination of the slide of Apple’s share price related to softening demand for its most profitable product, the iPhone, and the ascent of Jony Ive—a known timepiece aficionado—begins to paint a very clear picture for a very immediate launch.
Rumors of a 100 person team working on the problem as well as the filing of ”at least 79 patent applications that include the word ‘wrist,’” (according to the Bloomberg account) certainly support that notion. What Apple has in front of them is a formidable design challenge. In order to follow the company’s proven template, the iWatch would need to be a singular product with a limited number of options.
So unlike the rest of the luxury watch industry that can make all kinds of custom lines for people with different tastes and different sized wrists, Apple will need to make a fairly neutral canvas upon which customizations can be applied with software. And it will need to adjust to the size of a wide variety of wrists in an elegant and non-clunky manner. From this perspective, the software is a no-brainer. App Store. Watch faces as apps. Themes that can be applied to the suite of built-in apps with hooks that third-party developers can use to enable their apps to be “skinnable.” If it’s all about being a desirable design object, the apps don’t need to be killer—the user interface design does.
Given the profit motive and Ive’s track record, it should only be a matter of months, I would think, before the team “cracks” the most elegant design solution. Pebble has already demonstrated consumer interest in a watch that tethers to a smartphone, and Google Glass has staked claim to the leading edge on wearables. This middle ground is in fact where Apple has lived all these years. It is not first and it is not bleeding edge. It makes beautiful realities out of the next obvious thing—which at the moment seems to be the iWatch.
The design concepts in this post are from Danish industrial designer Esben Oxholm. They are the best execution so far of how Apple could make use of its curved glass display patents. Although it does appear to include some removable sections on the wristband, this idea does not really solve the wrist adjustment problem, but it does have the simplicity and clarity that we expect from an Apple design.
“Apple can merge fashion with function,” analyst Marshal Cohen tells Bloomberg. “An Apple watch could triple the size of the watch business in a year or two. They have the opportunity to get everyone that owns a cell phone to go out and buy another watch.” And unlike a TV product, launching a watch does not involve protracted negotiations with an entire industry. Watches are easy—and profitable—as long as they’re perfect.