Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Apple Watch: Four Thoughts and One Question

By

It may be too early to pass judgement on Apple's Watch, but there some clear pros and cons.

PrintPRINT
This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

I have an Apple (AAPL) hangover from yesterday's big product announcement event. Do you?

But with the company entering the smartwatch arena, it's time to take a look at the company's chances in wearable technology.

Here's what I'm thinking:

1) Price Is High

Starting at $349 for the most basic model, Apple will retain its image as the high-end player in the gadget arena. This is a $100+ price premium to competing models from Samsung, LG, and Motorola.

Following the initial rush from early adopters and techno-fashionistas, that pricing may be a bit much for the mass market to handle.

Apple is approaching the $200 billion/year revenue mark.

1% of that is $2 billion, or 5 million units at $400 each.

That's a lot of premium-priced product in a nascent category.

2) Battery Life Is a Question Mark

The Apple Watch's battery life is... wait, they didn't talk about it. We heard a lot about the iPhone 6's battery performance, but the company completely ignored this issue with the Watch.

If this thing is going to be integrated into people's daily routines, it needs a lot of staying power.

Heavy smartphone users are well-accustomed to charging throughout the day to make it all the way through to bed time. Will they want to do this with a second device?

The whole point of a watch is that it's just there and always works when you need it. If it goes dead by 2:00 p.m., it becomes an annoyance, not a convenience.

On the positive side, Business Insider was told by an Apple rep that "you can charge the watch at night", which implies all-day usage.

I'm sure specs aren't final, but it's worrisome that battery life wasn't even mentioned in passing.

3) Apple Watch Is Better Than Google Android Wear For One Little Reason

From a usability perspective, I think Apple outdid Google with one feature: the digital crown, which the little dial on the right side of the Watch. This is a brilliant addition that should seriously aid ease-of-use. A big problem with smartwatches is that it is quite difficult to actually do anything on their tiny touchscreens.

By adding just one tactile aid, Apple solved a lot of problems. For example, trying to pinch and zoom on a map on a 1.5-1.7" screen is ridiculous. Turning a dial makes infiinitely more sense -- not that I would have thought of it!

4) Maybe It Should Not Have Been Announced Yesterday

It was exciting to see Apple finally unveil a new product category. However, one clear negative is that the Watch announcement to some extent overshadowed iPhone 6.

Anecdotally, I feel like I'm seeing just as much press coverage for the Watch as iPhone, and I don't like that. iPhone 6 comes out next Friday and sales expectations are sky-high. This split of media attention is not going to kill sales, but it certainly doesn't help either.

One possibility is that Apple wanted the Watch's existence to be known to head off the competition's sales this holiday season, but maybe they could have waited a month?

The Bottom Line -- Will It Sell?

One of my main concerns with smartwatches is that there's a certain level of over-nerdy ostentatiousness to them. Someone Tweeted (I would credit if I could) that they seem overly oriented towards early adopters, and males specifically.

Apple is just as much a lifestyle brand as tech brand, so it has the best chance of breaking out into the broader consumer marketplace.

Beyond the big missing spec (battery life), the Apple Watch's success beyond the initial sales rush rests upon it generating a certain level of magic when you pick it up.

Since we can't judge that just yet, let's reserve judgment.

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE