Why Now for Apple Watch

Posted on Author by Ben Thompson

The impression I get is that many people don’t really understand why I changed my mind about the Apple Watch.

  • In Apple Watch: Asking Why and Saying No I criticized the lack of an explicit “why” in the Watch presentation and questioned parts of the demo, particular those which replicated phone functionality. After all, if you are going to have your phone with you anyways, why not develop the watch accordingly? I doubled-down on this position in How Tim Cook Might Have Introduced the Apple Watch

  • Then, a week ago, I wrote What I Got Wrong About Apple Watch that laid out a much more ambitious vision for the watch that in my mind explained many of the problems I originally had. In retrospect, though, I perhaps spent too much time explaining the context for changing my mind, and not enough explaining exactly what I think Apple is up to

This post seeks to rectify that. Here, point-by-point, is why I believe Apple is launching the Watch in 2015.

  • The Watch will eventually be Digital Hub 3.0 – This is perhaps the most controversial assertion I will make, and if you disagree with me here, then the rest of my argument doesn’t really matter. I believe that in the long run – i.e. not this version of the Apple Watch, but the one several iterations down the line – the Watch will have cellular capability and the ability to interface with any number of objects, including accessories that have larger screens and/or superior input methods,1 and will be the center of your computing existence. From Apple’s perspective, that means the Watch category is the very long-term replacement for the iPhone, at least for some segment of the population. Again, I’m not talking about 2015 or probably anytime in the next five years, but rather the very long term

  • The Watch’s competition is the iPhone – This may seem a bit strange at first glance – isn’t the Apple Watch competing against Android Wear devices? – but the truth is that the number of people who will start with the premise they want a smart watch and then decide which one to buy is miniscule. Rather, the Apple Watch is competing with non-consumption: people who don’t wear watches because their smartphone is “good-enough” at telling time. For the Apple Watch to achieve the level of success that would justify it as a tentpole product for Apple, it must appeal to far wider audience than those who are already interested in smart watches; to put it another way, the Watch must be clearly superior to the iPhone in your pocket in enough ways to justify not only the additional expense of buying it but also the hassle of wearing it and charging it nightly. This means a vibrant app ecosystem that unlocks a wide array of functionality that no one company could ever come up with on its own

  • There Is no iPod market anymore – I previously argued that the Watch should be more like the iPod: explicitly dependent on the iPhone for complex functionality, with only simple essentials on the device itself. The iPod, though, arose in a world where those simple essentials were completely unique and clearly useful; you obviously weren’t going to carry a computer with you everywhere to listen to all of your music (an activity that appeals to almost everyone). In contrast (and per my previous point), everyone already carries a phone with them. A pure notifications device and health tracker would only ever be a niche device.

In sum, while I believe there is a long-term market for an even more personal computer on our wrist, I don’t believe that market will grow out of an accessory the way the iPhone grew out of the iPod. Rather, the device that makes this market must be fully formed: it must have as many of the ingredients of Digital Hub 3.0 as possible.

The question, then, is why 2015? After all, there are some key ingredients missing in the Watch, the most obvious being the lack of cellular capability. To my mind Apple had three alternatives:

  1. Release an accessory-like Watch today, then transform it into a standalone device once it had its own cellular stack
  2. Wait until the technology was ready and release a fully functional Watch in two or three years time
  3. Release a Watch in 2015 that is designed as if it is a fully functional device, even though for the next few years it needs an iPhone for full functionality

Each of these alternatives has clear tradeoffs:

  • Alternative #1: Release an accessory-like Watch – This approach has the advantage of “making sense” – since it needs an iPhone anyway, it would assume the iPhone’s presence in its design decisions, off-loading things like picture viewing and searching for movie times to the phone, and focusing on Watch-specific activities like maps, health tracking, etc.

    There are two big problems, though:

    • As I noted above, I don’t think the market for this device would be very large
    • Everything about the software – including all 3rd-party applications – would need to be completely re-thought and re-built once the constraint that the phone be present was removed. In fact, what would more likely happen is that the Watch would never fully develop into Digital Hub 3.0 because it would always in some way presume the presence of a phone. This would leave Apple open to disruption from another watch that had no such constraints (see, for example, the compromises Microsoft made with Windows 8 because they needed it to run on traditional PCs)

    Ultimately, this alternative is appealing from a perceived simplicity and elegance angle, but it would be the most detrimental to the long-term potential of the Watch by including a temporary constraint in the fundamental design of the product. I believe I was wrong to so strongly call for this approach originally

  • Alternative #2: Release the Watch when cellular technology is ready – This approach avoids the dangers of designing in temporary constraints that limit the long-term potential of the device, and it ensures that the intended role and capabilities of the Watch is clear from the get-go.

    However, there are again two significant tradeoffs:

    • While Apple is better than most at iterating and fine-tuning a product internally, there are a whole host of things that can only be improved by having a device – and a user interface, especially – out in the open. The iPhone is a perfect example of this: the first several versions of iPhone OS were very limited from an interface perspective; it was only around the iPhone 4 that the user interface was fully realized and perfected. Were Apple to wait to launch the Watch, that time-consuming work would only begin in 2017 or 2018 or whenever the Watch was ready
    • Relatedly, an app ecosystem takes time to build. Sure, there were a decent number of apps when the App Store opened in 2008, but few if any of those apps are still used today. It took a few years for developers to iterate and figure out just how apps ought to work. Again, though, were Apple to wait to launch the Watch that work of building and iterating the ecosystem would also have to wait

    I can very much appreciate the argument for this alternative, but the reality is that a fully realized Watch is not just about being complete from a technical perspective, but also being complete from a UI and app ecosystem perspective. This approach would push out the year when everything is in place to 2019 or 2020 at best

  • Alternative #3: Release a Watch that is fully functional but for cellular connectivity – This approach – the one that Apple chose – allows the hard work of UI iteration and app ecosystem development to begin in 2015. Moreover, that iteration and development will happen with the clear assumption that the Watch is a standalone device, not an accessory. Then, whenever the Watch truly is standalone, it will be a complete package: cellular connectivity, polished UI, and developed app ecosystem. It will be two years closer to Digital Hub 3.0 than Alternative #1 or #2.

    The tradeoff is significant confusion in the short-term: the Watch that will be released next year is not a standalone device. It needs the iPhone for connectivity. To be clear, this is no small matter: the disconnect certainly tripped me up for a week, and if the feedback I’ve gotten is any indication, it continues to befuddle a lot of very smart people. How on earth are normal folks who don’t follow this sort of stuff for a living going to grok the idea of a standalone Watch that actually needs an iPhone?

So why did Apple choose Alternative #3? Confusing people seems so very un-Apple-like.

In fact, I think that this tradeoff is actually a lot less serious than we who approach products from a technological perspective appreciate. Put aside the technology for a second and look at how you actually live your life: how often do you go anywhere without your smartphone? I would bet almost never. Crucially, “normal” people are the exact same: no one goes anywhere without their smartphone (remember, that’s the entire reason an accessory-like device probably wouldn’t have a big market).

What I think Apple realized was that they could, in jujitsu-like fashion, use this reality to their advantage: it’s OK – not ideal, but OK – for the Watch to use the iPhone for connectivity because the iPhone is always present anyways. Apple is not asking anyone to change their behavior in order to get the full functionality of a Watch – it is entirely additive to your day-to-day experience. To put it another way, a standalone Watch that actually needs an iPhone is incongruent only from a technical perspective; from a real-life perspective it is a non-issue.

On the flip-side, in return for making technically-oriented thinkers uncomfortable, Apple gets to reap the UI and ecosystem benefits of launching today, so that when, in a few years, the cellular technology is ready, the Watch will be a fully developed product complete with a polished UI and developed app ecosystem that taken as a whole is far ahead of anything else on the market.

Then, over many years, I believe we will use and carry our smartphones less and less even as they become bigger and more capable (in this regard, the iPhone Plus may have the additional moniker, but I believe it’s the true future iPhone) because we will have an even more portable and personal device with us all of the time. And, in true Apple fashion, they will be ok with that, because we will be replacing their central product with another one from Apple that is potentially even more lucrative.

As an addendum, I am very aware that there are many points in this analysis where I may be wrong:

  • The smartphone may be the perfect device, never to be supplanted by the Watch (just as, for example, many believe that iPads will never fully supplant laptops). Still, even if this is the case, I think Apple would consider iPad-level sales a success
  • The Watch may not be technically capable of being a fully-featured device. However, I highly doubt this true; given how far ahead of the competition the A8 is, I see no reason to doubt the capabilities of the S1
  • The confusion about a standalone Watch that is technically not standalone may be too much to overcome from a marketing perspective. I definitely think this is why the presentation was so muddled: Apple wanted to convey that this was a standalone device that would one day be the only device we need all of the time, but they couldn’t actually say that

In the end, this all comes back to my first point: I believe the future of computing will always track towards more personal and more portable, and the Watch is really the perfect device. As recounted in Bloomberg Businessweek:

Ive, 47, immersed himself in horological history. Clocks first popped up on top of towers in the center of towns and over time were gradually miniaturized, appearing on belt buckles, as neck pendants, and inside trouser pockets. They eventually migrated to the wrist, first as a way for ship captains to tell time while keeping their hands firmly locked on the wheel. “What was interesting is that it took centuries to find the wrist and then it didn’t go anywhere else,” Ive says. “I would argue the wrist is the right place for the technology.”

Moreover, if this is true, this is the perfect place for Apple; in retrospect, the iPod, an accessory that was always very price-competitive, was an aberration. Apple makes ever more personal general purpose computers at a handsome premium that is justified by their superior user experience. Thinking the watch would not be in that vein was the mistake I have since rectified.

  1. I described this vision in Digital Hub 2.0 ↩