Apple To Dominate The Wearable Devices Market

Brian S Hall / December 30th, 2013

I have written much about “wearables” — wearable computing devices such as the Nike FuelBand, Fitbit Force and Google Glass. Wearables are set to invade consumer markets, healthcare, logistics and other industries, delivering a combination of personalized data, real-time notifications, and analysis of various human outputs, all stylishly wrapped inside the explicit promise of empowerment, enhancement and efficiency.

Whether these devices will actually improve personal fitness, lead to a healthier society, make for better-performing professional athletes, dramatically increase worker productivity, or even systematically violate our privacy are all questions I’ve explored.

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One question not explored: who will dominate the bourgeoning wearables revolution?

The answer seems obvious: Apple.

Apple’s design skills, highly integrated ecosystem, apps market, retail footprint, customer support staff, computing prowess, touch-based OS and global manufacturing scale are peerless — and every one of these are critical for success in the wearables market.

Indeed, I have a hard time conjuring scenarios under which Apple will not crush the competition in wearables. For the moment, I can envision only three, and none I put much faith in:

1. Wearables Are Not Real Computers

Though unlikely, I can at least imagine Apple Inc, with its finite resources and very obvious talents in building high-end personal computing devices, simply abdicating the wearables market.

Tim Cook and company may decide to continue their focus on “real” computers — smartphones and tablets — and cede wearables and sensors to others. Then, as wearables, their apps and services all become so popular and so pervasive in our lives that they eclipse today’s computing market, Apple is relegated to the margins.

Given Cook’s poaching of key people from Nike, Burberry and elsewhere, this scenario seems extremely unlikely. Much more likely is my earlier Techpinions prediction: that Apple rolls out a line of premium-priced computing jewelry.

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In fact, I think most analysts are missing the big story from Apple’s recent signing with China Mobile. It’s less about the number of new iPhones Apple will sell — let’s not play the smartphone market share game now, after all. Rather, it’s that a nation of a billion plus people, hundreds of millions of whom are transitioning into middle class, may ravenously desire beautiful, simple, and highly functional jewelry, watches, sensors and other wearables. Apple can provide all of these.

2. Apple Mistimes The Market

The “Apple copies” meme is partly true, at least on the surface. Apple works on a great many technologies, gadgets, form factors. However, the company typically does not release these until they believe both the product and the market are  ready, oftentimes long after competitors have their product collecting dust on retail shelves.

Apple may have a grand solution ready in, say, Q2 2015, only to lose out if wearables explode in popularity in early 2014.

Or, the market may radically veer onto a path Apple has no response to, and no strength to bear. After all, the accepted trajectory of such devices is that they become nothing more than computerized ‘tattoos’ placed on the skin, or tiny capsules we swallow. Perhaps a biotech company will ultimately prevail in the wearables market, or some uber-geeky Maori entrepreneur revolutionizes our very notion of a computer. As we well know, the best laid plans of giant tech companies are often complete failures.

3. Tim Cook Is Steve Ballmer

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My final scenario, and the one I think most likely — though still unlikely — is that Tim Cook is the Apple incarnation of Microsoft’s Steve Ballmer. Baller delivered massive profits, global scale, and as Microsoft grew to unwieldy heights, Ballmer somehow kept the trains running on time. Innovation, however, was suffocated.

It may be that the path of the wearable computing market usurps the need for high-margin iPhones and iPads. In response, Cook might hamper Apple’s long-term potential by attempting to corral the wearables market inside the high walls of Apple’s highly profitable iOS ecosystem. Just like Ballmer attempted to force everything through Windows and Office, this also will fail.

Similarly, for all the potential of Apple computers in the enterprise, Apple can’t seem to pull away from the high-margin, high-profit, easy-money consumer market. Perhaps wearables revolutionize the enterprise, just as smartphones upended it, and Apple has no adequate response. Cue the return of Microsoft.

Lastly, I suppose Apple could also simply whiff on wearables entirely, the way Microsoft, for example, struck out on touch screens. All possible, all unlikely.

The Next Evolution of Apple

The competition should be wary. When I examine Apple’s talent, skill set, ponder its brand, analyze its active customer base, assess its growing retail operation, test the integration of its many products, proprietary technologies and devices, it is  difficult for me to see how the company fails to win the wearables computing market.

Though Samsung beat them to market, and their Galaxy Gear ad is sublime, long-term I see no company that can bring to the wearables market what Apple already has. Namely, the chips, the design chops, the OS, the integration across devices, the commitment to intuitive function, voice and touch controls, cloud support, media partnerships, carrier relationships, broad appeal across borders and demographics, battery expertise, AirDrop, their own video chat service, the best designed notifications service, the list goes on.

The scale of each new computing revolution is far bigger, far richer, spreads far wider than the one that came before. I expect this with wearables. These will eclipse smartphones and tablets, just as those devices eclipsed “PCs.” Thus, if I am right, Apple is about to get much, much bigger.

Brian S Hall

Brian S Hall writes about mobile devices, crowdsourced entertainment, and the integration of cars and computers. His work has been published with Macworld, CNBC, Wall Street Journal, ReadWrite and numerous others. Multiple columns have been cited as "must reads" by AllThingsD and Re/Code and he has been blacklisted by some of the top editors in the industry. Brian has been a guest on several radio programs and podcasts.
  • blackjesus

    This is just like the TV. It’s only rumors. I’m sure something is in the works but everybody makes a bunch of speculation. You could say pretty much all the same things about the Apple HDTV also. You’re probably right but there is zero info actual out there to speculate on.

    • Perhaps. I didn’t want to necessarily play the ‘Apple will release a television in 2014!’ game. But, I’ve written a good deal on wearables and it just seems so ripe for Apple dominance. Though I should write about that and leave it for discussion.

  • Space Gorilla

    I tend to think of wearables more as sensors, distributed computing with the iPhone as the engine. And you’re right, who else can approach wearables as a whole solution? You have to curate, control, and simplify the system for it to work well. Given that every other tech company (and most analysts) think Apple’s entire approach is wrong/evil, who even has the will to do it?

  • Rene Stein

    Are you calling the latest Galaxy Gear ad sublime? The “pree-lady” ad? Because I would question your sanity if that is the case.

    And wearables will just need to be sensors, we already have enough computers, a typical person doesn’t need more than one full time computer on us at a time. And, battery and processing is not there yet to have a full fledged computer smaller than a phone. Give it 5 years though.

    • That Galaxy Gear ad was easily one of the best of the year, certainly for a tech product.

      • TheEternalEmperor

        What? That ad was awful.

      • Rene Stein

        You mean the one with the jerk whom I wanted to punch 10 seconds into the ad? This makes me want to buy their product somehow? The ad that is so shallow a 90 year old with cataracts could see right through it? That ad? Is this April Fools?

        • wemblee

          You didn’t notice the April 1 date on the Galaxy Gear?

          • Rene Stein

            Is there one?

      • jamesdbailey

        Brian, you can’t mean this ad:

        https://www.youtube.com/watch?v=T8nJKWJTsUg

        • Avi Greengart

          Agreed that the ad above is really smarmy (though it does highlight product benefits, which makes it better than 90% of all tech marketing). I assume Brian meant this ad: http://www.youtube.com/watch?v=f2AjPfHTIS4 or the other similar shorter version which ends with a woman answering a call on her wrist. These are brilliant.

        • The ad I am referring to is linked to above. Here again — probably my favorite tech ad of 2013.

          http://www.youtube.com/watch?v=B3qeJKax2CU&feature=youtu.be

          • Space Gorilla

            I liked this ad better when Apple did it, years ago, for the iPhone.

          • jfutral

            As long as it is not reliving what it was like to have a calculator as a watch.

            Joe

  • Mauryan

    Apple and Google can target the medical industry where wearable devices can track patients for their sugar levels, blood pressure, baby monitoring and so on, providing real time data to servers so that patients can be given better healthcare. Some people might object to it as invasion of privacy, but if devices can track the habits of patients (when they eat, when they sleep, when they are active etc), it will provide continuous information with which medication can be adjusted or new methods developed. Today doctors have to rely on what the patients tell them. If they have real data and patterns well established by a statistically larger pool of the population, healthcare can optimize on drug delivery to be more efficient and servers can send reminders to patients periodically to do the prescribed exercises and take medication. The devices have to be really small, comfortable and be able to communicate. People have started carrying video cameras nowadays while surfing, swimming, sky diving etc. which is giving an incredible perspective of an experience. Soldiers can wear such wearable devices so that their stress level can be tracked and remedies developed. This is one area the hitech industry needs to get into. In my opinion, this move will drive the cost down because the consumer is tracking everything. Just a thought. The focus must shift from wearing a watch that shows time to something profound that has not been done before.

    • Agreed. I think the *potential* of wearables is truly amazing and revolutionary.

    • Ken Bowlder

      You should read “The Age of Spiritual Machines” or “The Singularity is Near” by Ray Kurzweil. He’s taken your vision and run much further with it.

      • Mauryan

        Thanks. I’ll take a look.

  • 20,000

    Tim Cook is too savvy to be the Apple incarnation of Steve Bluster…er, Ballmer. And it’s not that Apple can’t seem to pull away from the high-margin, high-profit market, it’s that Apple doesn’t *want* to abandon that market – and they’re correct in staying with it.

    Return of Microsoft? Sorry Brian Hall, but their time has passed and they’re unlikely to do anything but flounder in the future.

    • Mauryan

      I’d say Tim Cook is a better manager than Steve Jobs. He is the one who envisioned and set up the entire supply chain for manufacturing Apple’s products. Apple went as far as the mines in Australia. Steve Jobs was an iconic figure. But the real work was done by all those stalwarts still with Apple. In my opinion, someone like Tim Cook would have taken Microsoft a hundred times farther than what Ballmer did. There is no comparison between the two. Cook has taken Apple to new heights.

      • pk_de_cville

        I can’t agree.

        Steve Jobs built Apple, the culture, the mission, the excellence. I don’t think Tim could have built it. Now that it’s built, I’m happy he’s driving it further into its future.

        (Bill Gates built Microsoft, its politics, its brilliant strategies, its untrustworthiness. Cook couldn’t winningly lead Microsoft and I doubt anyone can, since it is now a paper tiger. Unchecked dominance was its best skill and its dominance is gone, about to be displaced by Google’s winner take all ‘don’t be evil’ PR and lobbying abuse.)

  • Avi Greengart

    No question that Apple is the best positioned to win in wearables. But they actually have to do it. Until they do, it’s just potential. Google and Microsoft also have terrific assets. To a lesser extent, so do Sony, Samsung, LG, and [pick one Chinese CE vendor]. Right now the market is stuck in early adopter land, waiting for someone to provide a blueprint for mainstream success. Apple is the most likely to do so, both because of its brand/technology infrastructure/talent, and because it has done so seven times previously (PC, graphical PC, iPod, iTunes, iPhone, App Store, iPad). But I hate to cede them a market that they haven’t even entered yet. That logic would have had Apple knocking off speaker dock vendors with HiFi and headphone vendors with EarPods. Didn’t happen.

    • Mauryan

      Companies like Apple and Google are capable of finding new avenues and create new markets. Then the Microsofts, Samsungs and others jump in and run the market until they have no more iterations left to explore. The same will happen for wearable devices.

      • Avi Greengart

        No and yes.
        No, Microsoft can discover how to commercialize new products/markets (Xbox for connected multiplayer gaming) as can Samsung (pen-enabled phablets. It created that market and dominates it).
        Yes, if they don’t discover the blueprint, they’ll run as fast as they can iterating around the blueprint from whoever does hit on the right features/tech/messaging.

        • Any stats on actual pen usage?

          • Avi Greengart

            Samsung shared some around the launch of the 2013 Note 10.1 update, but that was for tablets, where the S-pen is obviously the biggest differentiator. I don’t have any info on post-purchase usage, but anecdotally I’ve found that S-pen is a purchase factor on the Note phablets as well.

    • Great points. Thanks.

  • aardman

    The mass market in wearable tech will not be realized in the nerdy device approach that Google, Samsung, Pebble, etc. are taking.

    I agree with Mr. Hall, wearable tech will be jewelry tech or fashion tech. For a rough idea, think Swatch brought at least two notches upmarket. I believe this is what Apple is building for hence the hiring of Deneve from YSL and Ahrendts from Burberry. You don’t hire the CEOs of YSL and Burberry just to sell one measly, nerdy smart watch. I believe when Apple wearables come out, they will be cutting edge tech and high fashion. There will be massive tie-ins with fashion houses in Paris, NY, Milan, and London. There will be ads in fashion magazines, counter placements in high end department stores, and prominent presences during fashion week in the major fashion capitals. With smart watches, there will be more than one model because people who buy watches buy more than one and they wear them as fashion accessories to match their outfit. I would not be surprised if Apple rolls out a sub-brand for wearables.

    The big advantage Apple has is that it is the only tech company that has successfully gone beyond nerd appeal. Wearable tech allows them to go to a place where no one can follow them, thanks to Steve Jobs and Jony Ives uncompromising stand on design excellence. None of their major competitors have the brand cachet to rub elbows with the major fashion names. They wouldn’t be caught dead associating their brand names with Google, or Samsung, or Microsoft. But Apple? How often do you read of some fashion designer waxing poetic about their iPhone?

    • Argh. I forgot to mention that YSL hire — even though I tweeted that. Thanks for the great comment. I love the idea of a “sub brand” from Apple. I really think “iPod” works better as a wearables brand than as a music player brand.

  • Quicksingle

    Wearable devices is such a broad description of potential products. Google Now already has Siri more than covered for supplying relevant, pre-emptive information. Google Maps alone is a mile ahead. These are good starting points. Besides Glass, Google might also bob up in the watch market. The next couple of years will be interesting to see what if anything takes off.

    • Great observations. No one does a better job of personalizing Big Data than Google. But, wearables are not “big data” they are uniquely personal data: my heart rate, my steps, my blood pressure. Now we need a device to measure that, then to analyze it, to store it in the cloud, to share it. That requires integration, touch controls and most likely, a well-crafted, beautifully designed device that just works — for me, my parents, children and grandparents. My parents, for example, will *never* use Google Now.

      • Space Gorilla

        A key point about this is “personal data”, which carries with it issues of privacy. Google doesn’t exactly have a great rep on that front.

  • Will

    Replace wearables with TV and we have a 2009 article word for word. All speculation, no facts.

  • Ryan

    “The answer seems obvious: Apple.”
    News flash: Apple hasn’t even entered the market of wearables yet.

    • FalKirk

      The question posed is “who will dominate”, not “who is dominating” wearables.

      Arguing that Apple cannot dominate wearables because they haven’t yet entered the market is like arguing that Henry Ford could never dominate auto manufacturing because he hadn’t yet produced the Model-T.

      • Ryan

        Congrats you understand what the article was about. You can’t declare a company that’s not even in the market to begin with that will somehow “DOMINATE” that specific industry. They have the potential to make an impact IF THEY EVEN ENTER IT. Your comparison is just hilarious because of the lack of sense it makes. No one was saying Henry Ford would dominate the car industry because basically no one knew it even existed until he created an automobile that could be mass produced and affordable by the middle class american. He didn’t invent the automobile he just made it more affordable to the average consumer. Clearly that won’t be what apple will do IF THEY EVEN ENTER THE MARKET. You need a physical product and even a viable rumor that says they are going to enter the market before you can declare such an absurd statement. This opinion piece was worthless.

        • GlennC777

          Ryan, you have written a bunch of words there from which I can barely parse any coherent meaning, never mind any actual logical argument against either the article or FalKirk’s analogy.

          This article is an opinion piece speculating on what might happen if Apple enters a specific market. I don’t understand your problem with it.

          • Ryan

            Well I can’t help you with your intellectual shortcomings.

            Thank you for proving my point with your second sentence. IF… IF they enter the market they potentially could make an impact. You can’t declare them a dominating manufacture of the wearable technology revolution without a viable product to compete in the industry yet. Which is exactly what this article did as well as the FalKirk’s analogy.

            I’m going to dominate the HR industry with my new software product even though I don’t have a product out there yet. I also plan to take over the healthcare industry with my innovative solutions that are running around in my head. I’m claiming domination right now.

    • Uelsimon

      Sure! as long as you are not counting the iPod shuffle or the previous iPod nano!

      • Ryan

        Those are not wearable technologies.

        • Space Gorilla

          Um, yes, the Shuffle clips on to your clothing. You wear it. I have one.

          • Ryan

            That’s not what wearable technology is. By that definition cellphones have been wearables since they were made. I can clip them to my belt also. Google glass and the galaxy gear is what’s considered wearable.

          • Space Gorilla

            I tend to agree with you, but the Shuffle is a tech device, and the clip is part of the device, not an accessory. It was designed to be worn, not carried in a pocket. The controls on the Shuffle are also designed to be used while wearing the device. So technically, I am correct, and as you know, technically correct is the very best kind of correct.

  • Mark

    Great article, but disagree with the conclusions. I am surprised you do not put “much faith” in scenario 2 & 3 since they are both mostly true. If Apple doesn’t enter the wearable market soon (in the next 6 months) they are going to miss the boat. And although Tim Cook appears to be a great “operations” leader for Apple, he is no Steve Jobs when it comes to innovation and design.
    Apple may do well with electro-fashion relative to competitors like Samsung, LG, or Google, but the competitors they really need to worry about are Gucci, Calvin Klien, Louis Vutton, etc. They need to out-fashion that establishment. It will be interesting to watch it play out.

    • Thanks. I think Apple has too many of the pieces to miss out. Though, heck, I think there’s still time for Microsoft to succeed with Windows Phone! Tim Cook may be more like Ballmer as you suggest, but Ballmer did damn well for about 10 years.

    • aardman

      Gucci, Calvin Klein, Luis Vuitton, etc. are not potential competitors to Apple Wearables. They are potential partners. None of them have the tech chops to do wearable tech so they can’t do it on their own. Who will they partner with if not Apple? Samsung? Google? Microsoft?

      Swatch had special edition watches designed by this or that designer, mostly minor names because in the end, Swatch is still budget chic. Apple would be well advised to do the same with the bigger designers and/or houses.

    • Majipoor

      “If Apple doesn’t enter the wearable market soon (in the next 6 months) they are going to miss the boat. ”

      Maybe true IF a competitor enter this market with a truly revolutionary product within a few months which is so revolutionary than Apple is unable to bring something even remotely as good quickly.

      But the mobile phone market was quite mature and very competitive in 2006: would you consider that Apple did miss the boat then because they entered the market years after everybody?

      You cannot miss the boat until the boat actually leaves the harbor and Galaxy Gear and such gimmicks devices won’t make it leave. The wearable market will be defined by the company which bring a product people actually buy by millions.

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