As this year’s iPhone and Apple Watch launch approaches, it is always good sport to read through the pre-event hype. But one topic that doesn’t appear much discussed is how Apple may be setting the scene for platform proliferation for its smartwatch.
Big change in tiny packages
The company is reaching into its “tried and tested” playbook to achieve this. In this case, it looks as if the company plans to give us more for less as recent speculation suggests a new and lower cost Apple Watch SE. If this is true, any Apple move to bring its smartwatch within the grasp of more people than before is going to be 99% business and 1% altruism. So what’s the business motivation?
I see it being about platform proliferation, as Apple sets the seed for a greater plan. (Apple isn’t a “pile them high, sell them cheap” kind of company.)
When it chooses to strike out for a new price point, the move usually reflects a larger strategy. Who else can recall when Apple gave first-generation iPhone customers $100 credit notes after choosing to lower the cost of the original iPhone in 2007?
In that case, Apple knew it had a hit product and wanted to shoot for the stars before the competition got its act together. It likely also understood that to support the App Store it launched one year later, it needed as big a user base as possible to motivate developers to try the platform.
So, what does it know this time around?
The first thing it knows is that people are keeping their smartphones longer than they used to. It recognizes that the financial climate is becoming uncertain, with its wearables, home, and accessories segment down 8% year over year in Q3.
But most of all, it understands that the accessories side of its business has room for growth; tens of millions of iPhone owners (including record numbers of Android switchers) haven’t yet invested in one of its accessories. The signs are that they would quite like to: Apple CFO Luca Maestri told us that over two-thirds of those purchasing an Apple Watch in the last quarter were new to the product.
So, there’s room for growth and a chance to build total revenue per user. In addition, there’s Apple’s big push toward services. We know Apple’s big pitch for the watch is all about health with dollops of mobile payments and security. Hope that the device would become a growth platform for developers wasn’t really realized outside of a few niche sectors, but as a bite-sized slice of the more encompassing smartphone experience, the watch serves — and serves well.
Company CEO,Tim Cook, a man who often says Apple’s big contribution to humanity will eventually be remembered as its contribution to health, still beats that drum for Apple Watch. “Apple Watch remains a great way for health conscious customers to track their overall wellness and fitness,” he said in July.
Digital health for the rest of us
Supporting this, Apple has its Fitness+ service and continues to develop heart and other health sensors that make the device increasingly valuable as a health and fitness tracker. There are also expectations that the newest Watch will get a body temperature sensor soon.
That’s why it is interesting that the New York Times claims Apple has a new model on the way that will be cheaper than the Apple Watch SE. It argues this entry-level product is intended for families who want to give kids watches equipped with cellular connectivity rather than full price smartphones. That may be true, but it’s also certain that adding cellular connectivity to the entry-level watch will also create connected health opportunities for Apple and its partners in that space.
Apple COO Jeff Williams is responsible for Apple Watch development. In a recently published Apple report, he wrote: “Our vision for the future is to continue to create science-based technology that equips people with even more information and acts as an intelligent guardian for their health, so they’re no longer passengers on their own health journey. Instead, we want people to be firmly in the driver’s seat with meaningful, actionable insights.”
Is Apple preparing its big idea for digital health?
Wait and see, I suppose, but the current constellation of signs, speculations and portents make me want to pay close attention to this side of Apple’s story across the next 12 months.
For me, this speculated (and it is only speculated) push around price looks very much like Apple attempting to proliferate across its wearables platform. If nothing else, doing so sets the scene for new services, almost certainly built around personal, digital health, and remote diagnosis/monitoring. The introduction of such services fits tightly within numerous speculations across the last few years, making it credible to argue that Apple is almost close to revealing the core of its next big idea in digital health. I don’t know what that will be, but I do expect that journey will include proactive diagnostics for a wider range of serious health conditions in the same way as the device already warns users of impending problems with their heart.
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