I don’t think the Apple Watch was ever about trying to find the next big thing. It very well may be, but not in the way that everyone thinks.
With the iPhone having just experienced its first year-over-year decline, Wall Street analysts are asking what Apple has up its sleeve to augment the iPhone and continue its explosive growth. But they’re making the big assumption that the iPhone market is now a given. That Apple can put the iPhone on cruise control and let some new product carry the flag up the hill of growth.
But staying at the top in the tech world takes an extraordinary amount of time and effort because if you slow down your rate of innovation, let alone stop, you will get passed by your competition. Being at the top is like losing weight—it may take even more focus to stay there than it took to get there.
Apple triggered the wholesale cannibalization of its iPod business with the iPhone. They also swallowed digital cameras and GPS units while they were at it. After that they watched the Windows PC market crater in large part due to consumers buying iPads. If anyone knows how quickly things can change and how tenuous an industry-leading position is, it is Apple.
I think Apple recognizes that sooner or later someone will invent a device more convenient than the smartphone. The smartphone is an example of the pocketable device supplanting the portable one. The Apple Watch is Apple’s attempt to shape the future as opposed to sitting around and waiting for someone to take their business. If the wearable will one day supplant the pocketable, they want to be the ones to do it. One of Steve Job’s core principles was that those who take the initiative are those who change the world.
Where I differ from all the Wall Street analysts is that I see the Apple Watch more as protecting Apple’s current revenue as opposed to adding to it. If you expected the Apple Watch to be able to continue Apple’s huge quarter-over-quarter growth gains, then I could see why you might declare it a failure. However, if you see the watch as Apple’s defense from letting someone else steal their market share, you may see it in a much different light.
The Apple Watch isn’t going to bring in an additional $200 billion in annual revenue, but it might one day keep Apple from falling below that level. If someone else can invent a new form factor that is more convenient than the smartphone, the analysts on Wall Street will wish for something like the Q2 Apple just reported. It’s Apple’s duty now that the iPhone is mature to see where the market may be headed and try to get there before anyone else.
I’ve mentioned before that as early as 2003, I was hearing from Gateway Computers R&D engineers about how they saw the mobile phone as the biggest threat to our PC business. So we were not surprised that Apple dove into phones. Apple seems to be following a similar path with the smart watch. They’re trying to shape coming events in a way that keeps them at the forefront of the new trend. Today it’s not so clear cut what that trend may be. But one thing is for sure, if Apple does nothing, they won’t be leading it.
But staying at the top in the tech world takes an extraordinary amount of time and effort because if you slow down your rate of innovation, let alone stop, you will get passed by your competition. Being at the top is like losing weight—it may take even more focus to stay there than it took to get there.
Apple triggered the wholesale cannibalization of its iPod business with the iPhone. They also swallowed digital cameras and GPS units while they were at it. After that they watched the Windows PC market crater in large part due to consumers buying iPads. If anyone knows how quickly things can change and how tenuous an industry-leading position is, it is Apple.
I think Apple recognizes that sooner or later someone will invent a device more convenient than the smartphone. The smartphone is an example of the pocketable device supplanting the portable one. The Apple Watch is Apple’s attempt to shape the future as opposed to sitting around and waiting for someone to take their business. If the wearable will one day supplant the pocketable, they want to be the ones to do it. One of Steve Job’s core principles was that those who take the initiative are those who change the world.
Where I differ from all the Wall Street analysts is that I see the Apple Watch more as protecting Apple’s current revenue as opposed to adding to it. If you expected the Apple Watch to be able to continue Apple’s huge quarter-over-quarter growth gains, then I could see why you might declare it a failure. However, if you see the watch as Apple’s defense from letting someone else steal their market share, you may see it in a much different light.
The Apple Watch isn’t going to bring in an additional $200 billion in annual revenue, but it might one day keep Apple from falling below that level. If someone else can invent a new form factor that is more convenient than the smartphone, the analysts on Wall Street will wish for something like the Q2 Apple just reported. It’s Apple’s duty now that the iPhone is mature to see where the market may be headed and try to get there before anyone else.
I’ve mentioned before that as early as 2003, I was hearing from Gateway Computers R&D engineers about how they saw the mobile phone as the biggest threat to our PC business. So we were not surprised that Apple dove into phones. Apple seems to be following a similar path with the smart watch. They’re trying to shape coming events in a way that keeps them at the forefront of the new trend. Today it’s not so clear cut what that trend may be. But one thing is for sure, if Apple does nothing, they won’t be leading it.
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