While introducing the company’s new smartwatch Tuesday, Apple Inc. CEO Tim Cook said, “This product will redefine what people expect of its category, and it’s the next chapter in Apple’s story.”
The Apple Watch, which goes on sale in early 2015, is one of a kind. It essentially offers all of the features and functions of all of the wrist wearables available today (from smartwatches to fitness bands) in one device, and then adds more on top of that, most notably a near field communication, or NFC, chip that will enable users to pay for goods in stores using their watch and Apple Passbook mobile wallet app.
And the Apple Watch, which will come in two sizes and start at $349, boasts a user interface that is familiar to smartphone users of mobile apps but designed for the smaller form factor. And while a touchscreen is part of the interface, Apple has focused most of its navigation on something quite old-fashioned—the dial, or crown. Apple Watch users will twist the dial and press the button built into the top of the dial to navigate.
Not to mention all the usual fun stuff associated with Apple products. Want an old school Mickey Mouse watch? Just select it. And Mickey even dances. Husband texts you, wanting to know if you’re stressed out, you say no, and he doesn’t believe you? Tell Siri (she’s on the watch, too) to share your heart rate with the hubby. Want to keep track of every step you take, including stairs, for fitness purposes? The Apple Watch features a barometer that enables the mobile device to gauge movement not just forward and backward and side to side (which smartphones can do), but up and down, so it can accurately gauge the number of steps you’ve climbed. And the Apple Watch will always be accurate to within plus or minus 50 milliseconds of the world atomic clock, Apple says.
Forrester Research Inc. predicts Apple will sell 10 million Apple Watches by 2016. Other players in the smartwatch/wearables market include Pebble, Samsung, Sony, Nike, Garmin, Fitbit and Jawbone.
“Apple introduced the Macintosh in 1984, the iPod in 2001, the iPhone in 2007, and the iPad in 2010—for anyone counting, this is actually a history of accelerating innovation wins, not a stagnant brand,” Forrester Research says. “In each case, Apple continued to retain its appeal to consumers while extending its ecosystem of partners. With the iWatch, Apple will show again how computing platforms are won or lost on the one-two punch of eager consumers and hungry ecosystem partners. The company will sell more wrist-based wearables through 2015 than anyone else has cumulatively sold, including fitness companies that have been selling trackers for years.”
The true winner of the wearables war will be the company that adds the most value to owning such a device, Forrester says.
“The warning we offer to any of these competing device makers is the one that we learned from earlier hot device categories: The watch itself may rise quickly, but when it plateaus and even falls, it will be the digital customer relationship and experience that the watch enabled that really matters,” Forrester says. “That’s why the company that builds the most complete ecosystem of brands, retailers, health care providers, software developers, financial services companies and governments will win the day. Apple will lead; Google will be close behind; Amazon could choose to join as the No. 3; and everyone else will struggle to become anything more than the next Flipcam, Palm Pilot or Nook eReader.”
So what does all this mean for retailers? Probably not much for the immediate future, some experts say.
“The market for wearables is too young for retailers to focus on,” says Van L. Baker, research vice president, mobility, at Gartner Inc. “You can send an app push notification to a smartwatch, but you could send the same to a smartphone. Either way, it’s the same challenge retailers face with in-store wireless beacons and smartphones: Retailers at first are going to do some really dumb things, like push you general offers the second you walk through the door. What amounts to spam.”
Merchants will learn over time how best to deal with location data—and other kinds of data generated by wearables like the Apple Watch, such as personal health information, Baker says.
The Apple Watch could have a significant impact on online and mobile shopping, but over time, says Sridhar Rao, vice president of engineering for digital software and solutions at Tata Consultancy Services, a global I.T. consultancy.
“While the business models will need to be worked out, the potential opportunity for retailers is to leverage the increased interest in wearables that Apple will initially bring and then mine the data to provide personalized, relevant offers,” Rao says. “A shoe retailer, for example, could alert you when it’s time to get a new pair of running shoes based on the number of miles you have run; a restaurant or grocery store could send you discounts for food choices that fit your health and dietary needs; or a sporting goods retailer could send you rewards for meeting your exercise goals and personalized offers for new fitness apparel.”
For now, the ability of a smartwatch—on a wrist, out in the open, not in a pocket, like a smartphone—to notify a user of something is where web shopping experts see the greatest opportunity for retailers. This might place a greater premium on building apps; and consumer use of apps in shopping already is on the rise.
“Apple Watch simply demands that retailers develop even more amazing and useful apps as two trends are emerging with this move: the smartwatch as a remote control for smartphone apps, and actionable notifications being a primary way users will interact with smartwatches,” says Brent Hieggelke, chief marketing officer at Urban Airship, a vendor that specializes in mobile marketing and push notifications. “A responsive web site just won’t get it done anymore as intelligent notification strategies become even more critical.”
Follow Bill Siwicki, editor of the 2015 Internet Retailer Mobile 500 and managing editor, mobile commerce, at Internet Retailer, at @IRmcommerce.
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