Apple Inc. makes very few mistakes but when it does it’s usually worth digging deeper to discover what you can learn from their wrong steps.
Rumors surrounded an Apple-developed wearable back as far as 2011, Eventually it was on September 9, 2014, during a press launch where the iPhone 6 was also revealed, the new Apple Watch was introduced by Tim Cook as “the next chapter in Apple’s story” with a video that focused on its design and the various combinations of bands and case styles that would be available to the consumers. After the reveal video, the auditorium was filled with prolonged applause and a standing ovation as Tim Cook reappeared onstage wearing an Apple Watch. Apple CEO Tim Cook explained that Apple Watch was “a precise timepiece, a new intimate way to communicate from your wrist, and a comprehensive health and fitness device.”
Many pundits hailed the Apple Watch as the next big thing and were convinced that the Apple Watch would adversely impact the Swiss luxury watch market – to the point of crushing it. These opinions displayed a gross lack of understanding regarding the luxury watch market and brands such as Rolex, TAG Heuer, Patek Philippe, Audemars Piguet, Bell & Ross… the list goes on.
According to Kevin Lynch who was brought on by Apple to make wearable technology for the wrist, the goal of the Apple Watch was to free people from their phones. Lynch said: “People are carrying their phones with them and looking at the screen so much. People want that level of engagement. But how do we provide it in a way that’s a little more human, a little more in the moment when you’re with somebody?”
The Apple Watch definitely made an impact and quickly became the most popular smartwatch on the market. Today it looks increasingly like it is becalmed by a self-inflicted identity crisis.
Doubts about the added benefit of smartwatches in between smartphones and considerably cheaper fitness armbands have always lingered, and the lack of obvious killer features hasn’t helped. Tim Bradshaw of the Financial Times used several applications over a period of days. He concluded that there is no “killer application” so far besides telling the time, which is the basic function of a wristwatch anyhow.
In the past quarter, the global smartwatch market saw its first contraction, with worldwide shipments declining by more than 30 percent year-over-year. According to IDC’s estimates, shipments amounted to 3.5 million units between April and June of 2016, down from more than 5 million in the past year. While it needs to be noted that last year’s June quarter marked the launch quarter of the Apple Watch, it took both the smartphone and tablet markets years to see their first year-over-year declines after Apple had entered and thus made them the next big thing.
It would appear that the Apple Watch isn’t cutting it in the exclusive luxury watch sector or the more generic fitness band sector and without a killer app it’s appeal is limited. Luxury watches are big business. The Swiss watch industry, saw its exports grow from £2.5bn in 1986 to £10bn in 2008. All this despite the fact that the primary function of the watch – to tell the time – has been rendered obsolete by the invention of the mobile phone. The fact that men and to a lesser extent women are still buying and cherishing quality timepieces is of great comfort to the Swiss.The arrival of the quartz watch in the midst of the swinging 60’s was a potential game changer. But not for long.
The Swiss watch industry reinvented themselves with a design philosophy and marketing programme that brought them back from the brink of extinction. They determined that watches were not merely for telling the time, they would be works of art displaying craftsmanship,heritage and precision. In the mid 90’s TAG Heuer signed a deal with the McLaren Formula 1 team and its timepieces became inextricably linked with one of the world’s most glamorous sports.They associated their brands with sports to add a hint of danger and adventure, Formula 1, polo, sailing, tennis, golf and flying. At the same time they appointed celebrities from sport and entertaiment as brand ambassadors.
The watch industry’s big hitters invest up to 25% of their revenue in advertising and promotion. Millions go on high end creative work and the purchasing of ad space in magazines that reach their target audience, and millions more is spent on sponsoring sports teams and players together with the associated PR. .In return, the magazines feature new watch announcements in their editorial sections. Watch advertising accounts for about 18% of the total ad revenue in an upmarket men’s magazine. Either Apple didn’t know what it takes to play in this market or high on hubris they chose to ignore it.
First published by Adrian G Stewart at OOKII.Company