Towards the Apple Watch

Apple will launch its Watch in the coming months. From the Apple investor’s point of view this will be an important date as the share price already reflects the expectations of a series of successful new products. The Watch is the first of these products and may determine whether Apple still has what it takes, even if the smartwatch market today appears lukewarm.

A smartwatch may be defined as a computerized wristwatch with functionality that is enhanced beyond timekeeping.

While early versions performed simple tasks such as calculations and game-playing, recent iterations could run mobile apps, functioned as media players, could answer calls and take photos. However, to-date, none of the products available have managed to capture customers’ imagination.

Samsung, for instance, in a little over 1 year, has launched six different smartwatches. This ‘throw everything into the pot until it starts tasting good’ approach, has only added to the general perception that while a smartwatch is in principle a very good idea, its usefulness in practice is limited.

The problem with many of the current smartwatches is that a large number of functions are packed into a small touch screen. These have to be manipulated using your fingers which is fiddly at best. Add in limited battery life, cheap materials and useless functions; the reason why sales have been poor to-date becomes evident.

Early this year Apple will launch the Apple Watch. The Company has never been good at launching completely new products. However, Apple has repeatedly excelled at taking an existing design or product and transforming it into a commodity; a product that no one can live without.

Apple’s appears to have realized that watches have several limitations including size, battery life and functionality. Smartphones should not replicate the functions already available on your phone; after mobile companies have convince users that bigger is better, why would a user go back to a miniscule screen?

Another barrier that has been ignored is that a watch is a fashion statement and status symbol, much more than a mobile phone. Often people are reluctant to part with the watch that they have worn for years unless it is replaced by something more special. A watch projects the wearer’s image and personality and, unlike a phone, needs to be a little different.

Apple has focused on making a fashion product. The Watch will be offered in three different styles and two different sizes. Straps also vary greatly and include link bracelets, sports straps and classic buckles. Materials used range from rubber to 18 carat gold.

Whether the Watch will be as functional as it is fashionable still needs to be seen. Pre-launch reviews are mainly positive, however, user reviews post-launch will determine its success.

From an investor’s point of view, holding on to or buying Apple’s shares hinges on one’s confidence that Apple can pull it off once more.