Home > Case Studies, Competitive Strategy, Management / Marketing / CI Theory > The iWatch – is this the next disruptive innovation from Apple?

The iWatch – is this the next disruptive innovation from Apple?

February 20, 2013 Leave a comment Go to comments

Apple has developed a reputation for creating new markets that didn’t exist previously. The iPod was not the first mp3 player but it created a mass market. The iPhone launched the SmartPhone era – showing BlackBerry the potential of an Internet enabled phone, in a way that has almost killed BlackBerry’s manufacturer, RIM. The iPad was the next innovation – but since then nothing at all except rumours. The rumours include an Apple TV that would shake up the television industry, and an Apple watch – the iWatch. The AppleTV was said to be the next big innovation – and was briefly mentioned in Steve Job’s biography, where apparently Apple had something that would really shake up the TV industry. Nevertheless, the rumours relating to this have died down – and the iWatch is the latest rumour target.

One idea on the iWatch

My first thoughts on seeing images of the rumoured iWatch were why?

Why would anybody want something like this on their wrist when there were so many beautiful products from Citizen, Seiko, and higher-upmarket, Rolex & Patek Phillipe, among many others. It didn’t even have the look of the Swatch watch.

I also couldn’t see it as a replacement for a SmartPhone – as it’s too small to do all the current functions expected of phones that seem to be getting bigger, not smaller. So I personally dismissed the iWatch as just rumour, or a sign that Apple had lost its mojo, if it turned out to be true.

Nevertheless, the rumours have become pervasive – and so I’m sure that they are either a smokescreen or reflect something real.

I started to think about it.  The watch market can be divided up into a number of sectors. One sector views watches as a form of jewellery – and this is the market Rolex, Patek Phillipe follow. To an extent it is also the market that Citizen and Seiko chase too – although their watches also emphasise functionality, with the Seiko Solar and the Citizen Ecodrive watches that don’t need batteries or winding. Further downmarket, Swatch tries to be a fashion item. However all have a basic raison d’être – to tell the time. I couldn’t see an Apple watch easily replacing the jewellery element (or at least not initially). I doubt it will be a solar product – and so (again initially) it won’t replace Seiko or Citizen. It could compete with Swatch, but from previous Apple history would be much more expensive and so bring little to the pie.

The next question is who wears watches today – and that gave the clue to why I think the iWatch is real. Most watch-wearers are Generation X or older.  Millennials / Digital Natives don’t wear watches. They use their SmartPhones to tell the time. That’s the clue – and the target. A SmartWatch – especially if it could interact with existing devices – makes a lot of sense, as it could provide a more compact device to supplement their iPhone, iPod and iPad or even replace them for around the house, workplace or college dorm. I think that contrarians that say such a device won’t work are falling for the mistake I think I made, by not thinking about how people tell the time today. The potential problems revolve around the other expected features. Will it also be a phone? A music player? A portable sat-nav device? How would these work ergonomically?

Assuming that the iWatch is real and not a smokescreen for something else, the argument that it won’t be attractive fails when you see some of the suggested design concepts. Some are very attractive and wearable as both a fashion item and even as jewellery. The potential objections to functionality are also less if the iWatch were to interact with other devices.  The problem here is that there may be an expectation that the interaction is with another Apple device – which would mean that the iWatch would not be a stand-alone product. This limits its potential considerably. What about linking to Android phones – that have overtaken the iPhone in overall market share – or a Windows computer? If this were to be allowed then I think the iWatch would be another Apple success story.

If this is the case, then it does something else. The onset of quartz watches in the 1980s was highly disruptive to the Swiss watch industry. Initially the Swiss industry dismissed such timepieces as cheap and nasty, but in classical disruptive innovation style, they soon overtook mechanical watches to become the dominant format. The rise of quartz watches caused serious damage to Switzerland’s watch industry – until it recognised the threat, and created products such as the Swatch. An Apple iWatch that succeeds promises to be equally disruptive – and overtime, most of us may end up wearing such products.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: