Is Apple better off releasing the iWatch now, or in one year?
There are quite a lot of opinions and rumors going around concerning the Apple iWatch. Some think the device will be announced next month, others say it won't be released until early next year, and at least one person out there thinks that Apple should wait another year before releasing its first product into the wearable space. We can't really say what Apple will choose to do, but we can certainly examine the various possibilities, and the potential consequences of each path.
The idea that Apple should wait for another year before releasing the iWatch comes from Sammy the Walrus IV on Twitter, a user who frequently has astute commentary when it comes to Apple. Sammy said recently, "Seeing some compare pre-iWatch smartwatches to pre-iPhone smartphones. Slight problem: Pre-iPhone smartphones actually were being bought." Sammy goes on to say that if it were his choice, he would delay the iWatch by one year, release the larger iPhone and start to give users more of an idea why smartwatches are valuable products that can make great companions to smartphones. It's certainly an interesting take, and one that definitely has merits in the thinking.
Historically, Apple has had its best successes when it releases a product into an established market. The idea of portable music wasn't new, nor was the usage of MP3s when Apple released the first iPod. There were successful MP3 players on the market before the iPod, including the Diamond Rio, the Creative Nomad, and the Archos Jukebox. But, the Apple iPod and iTunes combination changed the market when it was released. Similarly, cell phones had a long history before the iPhone, and there were successful smartphones as well, mostly from BlackBerry and Nokia with Symbian. However, once again, the Apple iPhone changed the game, and popularized the trend of killing off physical keyboards in favor of full touchscreens.
The smartwatch market is still very young, and hasn't established itself in the same way as those other examples. There are only about half a dozen smartwatches of any note - two Android Wear devices, the Samsung Gear watches, the Pebble, and the Sony SmartWatch. Overall, smartwatches are still devices that are only attracting the tech elite and enthusiasts. They are very much niche devices, because the general public has not yet come to understand the value of a smartwatch. Frankly, many manufacturers still haven't sorted out that mystery, which means there is no real consensus on what functionality is best for a smartwatch. Some try to do too much, some are very minimal, some focus on fitness tracking, and others don't.
So, Sammy does have a valid point, from this perspective. Apple might well be better served to allow the market to find its way a bit more. Allow manufacturers and users to figure out what works best on a smartwatch, and how it can best add value to people's lives. Then, Apple can come in as it has before and change the game. That's Sammy's idea (extrapolated from the limitations of Twitter), and it makes quite a bit of sense. However, we don't necessarily agree that it is the best path for Apple.
Here's why we're not so sure that Sammy's view is correct: that logic only works when talking about a product that consumers are familiar with. People understood what cell phones were before the iPhone came out, and there were relatively successful smartphones; but, people didn't necessarily see the value in smartphones or understand how much better they could be until the smartphone revolution came. Even once the iPhone came out, there were plenty of people who still didn't see the value because of the extremely high price tag, plus the fact that there were no third-party apps, and it still used the slow EDGE data network. The iPhone really didn't take off until the 3G came out the year later.
Then, there is also the other major Apple product that we didn't mention yet: the iPad. There were tablets in existence before the iPad, but the tablet market was much more like the smartwatch market. Tablets were a niche device that had found use with doctors and some students, but that's about it. Windows was in no way optimized for touch, so the overall experience was a bit of a mess. There were a couple Android tablets on the market as well, but they were using software that was in no way optimized for the larger display size. Manufacturers didn't know what would make for a successful tablet, and consumers didn't see why a tablet would be a valuable product to own.
That's the market that the iPad was released into. Apple wasn't changing an established market so much as launching a new one. Now, the devices that existed before the iPad are considered Tablet PCs, and we are only now coming back to the idea of a tablet/PC hybrid. Apple told users why tablets were a valuable products. Apple showed that tablets could be great devices for media consumption and gaming. They were better for reading or watching video than a small phone, and you could have more immersive games on the bigger screen. And, consumers bought it. The market seems to be shifting back towards devices that can excel at both consumption and productivity, so tablets have hit a rough patch, but it still stands that the iPad was a success when first released into a market where consumers were not buying tablets.
The original iPhone was a great learning moment for Apple, and waiting to release the iWatch would take away that learning moment. The first iWatch doesn't necessarily need to be a huge success, because the expectations will be a bit lower. Expectations are usually higher for Apple in general; but, if Apple waits one year for the smartwatch market to mature a bit before releasing the iWatch, it will lead to much higher expectations for Apple. The competition will have more of a chance to find its way, and attract its own customers.
Android already dominates the smartphone market, which could mean that users would look to Android Wear for smartwatches, because it would better compliment the smartphones they already own. There are only two Android Wear devices right now, but we know the Moto 360 is coming soon, as is an announcement from Asus about an Android Wear device. If all of the rumors prove true with the Moto 360, it could be the device that the smartwatch early adopters really want - beautiful classic design, premium materials, wireless charging, and acceptable (though not great) battery life. If Apple waits another year to release the iWatch, it will not only give all other Android Wear makers a chance to hit the market, but it will give Motorola specifically another year. Android Wear is good software already, and there are enough hardware makers in Google's camp, that Apple might not be able to afford losing a whole year to Google.
Regardless of if Apple were to release the iWatch now or in a year, the smartwatch market will still need time to come into its own, and right now Android Wear has the inside track on shaping the smartwatch market. Apple can't give Android Wear too much of a head start, because Android hardware makers notoriously iterate hardware faster than Apple, and Google iterates software faster. If Apple releases sooner, it gives Apple time to learn better where the market is going, and grow with it before releasing the second generation iWatch. But, more importantly, it would allow Apple to exert more control over where the smartwatch market will go, as it did with the iPad. Apple obviously believes that health and fitness tracking should be a focus, as evidenced in Healthkit, and releasing now would allow Apple more time to push that vision. Waiting would give too much control to Google and Android Wear, especially with the early adopter crowd, which is the real key to the game.
It is definitely true that if you are going to compare the iWatch with the original iPhone, you could come to the conclusion that Apple might be better served in waiting one year before releasing the iWatch. But, we don't think that's the comparison that should be made. The iWatch and smartwatches in general have much more in common with tablets than phones. Smartwatches are necessarily companion devices right now. In time, they could break free and have great solo careers, but even if you take away the need to tether to a smartphone, smartwatches are still companion devices.
It is far more useful to own a smartphone alone than it would be to own a dumbphone and a tablet, or smartwatch. Smartphones are inherently more useful. Tablets are big and clunky for many tasks, and smartwatches are too small and difficult to interact with for long stretches of time or for advanced tasks. Because of that, smartphones are more of a necessity for consumers, while tablets and smartwatches are luxury devices. The only people in the market for those devices are those with the extra cash to spend.
Those early adopters will have a lot of influence in the market, because as the cost of smartwatches falls and more consumers want to buy, those early adopters will be the ones asked for advice on what to buy. Apple needs to capture those early adopters as soon as possible and dictate the market as much as it can. The iPhone still holds a good amount of market share when it comes to the high-end market, which contains a far higher proportion of users who can afford luxury devices like a smartwatch. Android is steadily taking market share, and an iWatch could help in keeping users in the Apple camp. That's why we think Apple should (and likely will) release the iWatch sooner rather than later.