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Apple’s iWatch: The next big thing

By Jan Brassem

December 02, 2013


Jan Brassem is a senior partner at MainBrace Global Partners, a global jewelry advisory and M&A firm. You can e-mail him at Jan@MainBraceGlobalPartners.com.

Click through this gallery to see a few smartwatches.

As a young kid, I mailed in $1 with three Wheaties box tops, and got myself a genuine plastic Dick Tracy wrist-phone (called a two-way wrist radio in those days). It was going to be just like the one he wears in the comics. The watch I received was, of course, a cheap imitation. But, at my young age, with a big-time imagination and a loud voice, it worked perfectly. You get the idea.

That was back in 1946 when Chester Gould’s Dick Tracy pioneering concept was “copied” by a bevy of future comic book-like characters. Remember Captain Kirk, James Bond, Dr. Who, Men in Black, even Maxwell Smart (wristwatch as well as shoe-phone), with a host of others?  In a sense, these imaginary figures became trailblazers in leading the wristwatch industry to focusing on robust mechanical/ electronic change: self-winding watches (developed by Rolex and others), battery-powered watches (by Seiko and others), one-piece mechanical transformables (by Eclipse and others) or satellite-guided chronographs (by Citizen), to name a few of many stunning industry innovations.  

With the saturation of so many tech consumer products, however, it came as no surprise that the long list of technology companies would discover an even newer and inviting market within the so-called wearable technology sector. As The New York Times’ Eric Pfanner wrote recently, “turn(ing) the human body into a mobile computing and communication platform” seems to be a wise marketing strategy. You don’t have to be a Harvard graduate to see that, in the age of iPads, iPods, iPhones and numerous other smartphones and tablet computers, technology companies would scramble into watches, the “lowest hanging fruit” of the wearable technology market.

Says Ian Fogg, an analyst for the research firm HIS, in a recent edition of the Times, “Everyone knows, (a watch), is something you wear on your wrist, but nobody knows what features the consumer will want. Just as a smartphone isn’t really about the phone, the smartwatch is not really about telling time.”   

At last count, 10 tech companies including Sony, Nike, Nokia, Motorola, LG, Kickstarter, Samsung and Google, will, or already have, entered the wearable technology arena. More will follow. Several of those are operating without a clear marketing strategy and have not found their feet, so to speak: a product differentiation that has consumer appeal. Dare I say, some of their watches are basically Dick Tracy-like “me-too” gadgets with some tech ability. Nobody was reaching for their wallets.

But there’s more to this. Most have little or no design content. But to be fair, the industry is still relatively young. Because of their myopic marketing and product development strategies, most of these products will just putter along or quickly find their way to obscurity. So, please stand by.

Let’s survey the most advanced current smartwatch, namely, Samsung’s Galaxy Gear. Please take note however: that the 2,000-pound gorilla in the wearable tech room -- Apple -- is watching and taking notes.

Samsung’s Galaxy Gear smartwatch
The Samsung Galaxy Gear is the first smartwatch supported by a meaningful marketing budget, particularly on national television. It takes some of its more popular features from its spacious smartphone via Bluetooth and translates them to the much smaller “tile”-shaped display. The wrist bands come in a variety of colors similar to traditional male-oriented watches. The camera is near the band’s shoulder.  

It has some cute features: An embedded microphone/speaker allowing you to keep talking even using your hands on something else. (You can, of course, use your Bluetooth headset for that, but you may look a little dorky.) It has video and photo capabilities and a basic fitness tracking app. It even has an app to call up the ubiquitous “Siri-in-the-Box.”  

On the other hand, obviously, there is little or no design content unless you like square, routine and bulky. It lacks flair. Samsung seems to agree, as Gear 2 is in the works. There is no comparison between say, a TAG Heuer, Rolex, Omega or even a Swatch. As Steve Tobak, a techie wag, writes, “The Galaxy won’t -- or shouldn’t -- find itself on your wrist.” It lacks that something special.

In summary, like most of Gear’s competitors, the smartphone doesn’t have enough going for it to take up wrist real estate, even with millions of dollars of marketing support, which brings us to another point. The one strategic mistake Samsung made, a big mistake, was to launch Gear too early. The Gear’s ferocious competitors are taking notes on its strengths, weaknesses and strategic timing.  

Did anyone see that gorilla writing frantically?

The gorilla comes to life: Apple’s iWatch
It is not often that a luxury consumer product company will hit the exact center of a strategic note when launching a product. By all indications, Apple will do just that if, and when, they decide to introduce their iWatch.

Although Apple is one of the most competitive and pathologically secretive companies in the world, there are several clues about their iWatch intentions and strategy.

-- Apple management has suggested iWatch could be the future of the company.
-- Trademark applications for iWatch components have been filed around the world.
-- Apple is experimenting with wristwatch components made of curved glass. The glass can bend around the human body and clearly lends itself to innovative watch designs. (See the pictures of Ciccarese Design’s non-Apple renderings using the glass technology in the slideshow accompanying the story.)
-- Apple has struck a deal with Corning for their Willow Glass product, which, some say, is as flexible as a piece of paper.
-- Historically, Apple was never the first to enter a market. Apple lets others, sometimes many others, experiment first. And then, after studying early entrants’ successes and failures, launch their category killer. This sounds familiar.
-- Apple is one of the few high-tech companies that has skillfully blended technology with product design. Sir Jonathan Ives, reputed to be the world’s foremost industrial designer, leads Apple’s design team.
-- Apple now employs 100 product (watch) designers.
-- According to some financial and market analysts, if the iWatch were launched in the second half of 2014, an estimated 5.94 million units could be sold. That number increases to 22.79 million in 2015.
In some circles, anyway, there seems to be little doubt that the iWatch market is now, or will be, owned by Apple. Why not wait for their iWatch launch?

On the other hand, if you have some spare cash, it might be a good time to take a flyer and buy a few Apple shares (Apple Inc. NASDAQ: AAPL) in the market.