Apple Watch Sport, Image from www.apple.comIn April, Apple will launch the company’s first all-new product since the iPad debuted five years ago – the Apple Watch. According to the Wall Street Journal (WSJ), Apple ordered more than 5 million watches for its initial run. The report notes that the orders for the smartwatches are similar to early sales of the iPad launch, when it sold 7.5 million. USA Today reports that research company CCS Insight expects the number of Apple Watches shipped to be 20 million in the first 12 months.
"One of the biggest surprises people are going to have when they start using it is the breadth of what it will do," Apple CEO Tim Cook said at a recent conference, according to the WSJ.
With few details revealed by Cook there is much speculation about what it will and will not do. WSJ reports that during development, Apple “studied a wide range of advanced health features for the smartwatch before scaling back its ambition for a device that does a little bit of everything.” For instance, the watch comes equipped with Apple Pay and several apps that can provide data to the wearer throughout the day (i.e. flight schedules and appointments). While other wearables focus on a touch screen, Apple is making navigation on the watch head easier by letting people move the digital crown to toggle between apps. As far as pricing, the Apple Watch Sport will start at $349. While Apple hasn’t announced pricing for the other models, its luxury gold edition is expected to be among the most expensive products the company has ever sold, likely surpassing the $4,000 Mac Pro computer.
While wearable devices for fitness and exercise, such as Fitbit Flex, Microsoft Band and Jawbone UP, have led the wearable market,the smartwatch segment is still considered fledgling. For instance, only 720,000 Android Wear smartwatches shipped in the last six months of 2014 (from market researcher Canalys). But that is expected to change with the launch of the Apple Watch.
According to Business Insider (BI) the Apple Watch will kick-start growth in the overall smart watch market and account for 40% of smartwatch shipments in 2015. The BI report predicts that the smartwatch will be the leading wearable device category going forward: "Estimated smartwatch shipments will rise by a compound annual rate of 41% over the next five years. Smartwatches will account for 59% of total wearable device shipments this year, and that share will expand to just over 70% of shipments by 2019."
BI also predicts that like the smartphone and tablet markets, Apple and Google will dominate the smartwatch market. It argues that because these platforms make up over 90% of the entire mobile platform market, consumers will gravitate towards what they already know and use.
Will the smartwatch be adopted by businesses? While tablets have become more widely adopted for business use, there are some barriers to adoption of smartphones for enterprise use. Smartwatches, in particular, must become stand-alone computing devices with more robust functionality (now, most of the devices need to connect with a smartphone or tablet). Other barriers include small screen size, clunky style, limited battery life, and lack of enterprise applications that can drive adoption. The recent collaboration between Apple and IBM (see Sinu blog) and the development of more integrated enterprise solutions for Apple mobile devices, seems to point to a future where smartwatches might one day become an important business productivity tool.