Apple Watch at One: What Next?

This week, the Apple Watch will celebrate its first anniversary. If the rumors are correct, we should expect a new Apple Watch this fall, most likely in September. Given this, it’s worth thinking about the Apple Watch as it is today and what should happen when Apple updates the device in a few months.

Vision versus Reality

Apple’s vision for the Apple Watch was a little like the original iPhone strategy, in that it had three parts. The Apple Watch was to be:

  • the most advanced timepiece ever created
  • a revolutionary way to connect to others
  • a comprehensive health and fitness companion

In addition, Apple made much of the apps that would be available for the device and showed several on stage.

In reality, while the Apple Watch turns out to be very good as a fitness device, the rest of the vision articulated a year ago has turned out to be a little off the mark. From my personal use and from survey data from Wristly and others, it would appear people do indeed use the Apple Watch as a fitness companion but the main value comes from notifications and the watch face complications. Apps have largely been a disappointment, even since watchOS 2 launched last fall, because they simply load too slowly and inconsistently to be useful. In my experience, the communication aspects – notably Digital Touch – have been a novelty that quickly wore off. I do use the Apple Watch for communication but I don’t use any of the Watch-specific features – Messages is one of several apps where I use actionable notifications (also available on iOS) rather than the app itself to communicate.

I use the fitness features regularly – I wasn’t in the market for a fitness tracker as such, but having a regular reminder of my progress against goals right on my wrist, which I now consult dozens of times a day, has been very motivating. I don’t use any third party apps for fitness tracking most of the time, but I find the three rings plenty to keep track of how I’m doing, try a little harder if I need to, and so on. I find the Modular watch face with its many complications invaluable at this point for getting a quick sense of what’s going on in my life. I’ve worn watches all day every day since I was about six, so it is natural to look at my wrist regularly throughout the day to check the time. Now I get more value out of that glance because I also see what’s next on my calendar, what the weather is, how I’m doing with my fitness goals, and so on. The watch face provides the true “Glance” functionality for me, rather than the feature actually called that, which I never use. Notifications – which I carefully tuned when I first got the Watch – are the other essential part of its functionality for me. I get a lot of notifications, and it’s great to be able to see these on my wrist, dismiss some, respond to others, make a mental note to deal with others later, and switch to another device to deal with the rest. I love that my notifications no longer have to beep or vibrate in a way that’s noticeable to others, and are much more personal than in the past.

All of this means the Apple Watch for me largely fills the same functions as most other early smartwatches, though it does them considerably better. This takes me back to a report I wrote in the months before the Apple Watch launched which said that as long as smartwatches mostly focused on notifications and fitness they’d find a limited market, since most people don’t care about those things. It’s better than other smartwatches, but it’s not as different in the jobs it does as Apple’s vision for it would have suggested.

Apple Watch 2

All this raises the question of what Apple might do with the second version of the Watch to address these issues and expand the addressable market for the Watch. The most obvious thing would be boosting the performance of the Watch significantly, allowing apps to perform more effectively. That means boosting the processor on the Watch such that it can handle these tasks natively with a much quicker response time. It likely also means giving the Watch more network autonomy. Apple likely isn’t ready to add an LTE chip to the Watch, but having its own connectivity would make a big difference in the responsiveness. At least being able to connect to WiFi when available independent of the iPhone would help here, though it wouldn’t help when out and about. I suspect if Apple gave the Watch a big enough spec bump, apps would become truly useful and it, in turn, would spark innovation in that area. The initial batch of Watch apps were largely ineffective because of a combination of lack of vision and poor performance. Apple needs to fix both problems and that likely starts with the hardware.

Another area where Apple could extend the functionality of the Watch is by adding more sensors. Independent GPS is an obvious one, and it would fix one of the few big holes from a fitness tracking perspective. But it could also be extended with a variety of body sensors, which could provide additional information for health and fitness apps. This could be done in the Watch itself (that’s certainly where the GPS needs to reside), but it could also be done through either Apple-made or third-party Watch bands which could be specialized for particular needs. This could be one way to address the regulatory challenges associated with moving deeper into the healthcare sphere, which I alluded to last week. Opening up a Band connector to third parties could enable this innovation without Apple having to deal with the FDA and equivalent bodies itself.

From the reporting I’ve seen, it seems more likely Apple will address the latter of these two needs than the former, and I think that’s a shame. The market for the Watch can only really expand beyond its current scope if the Watch does meaningfully more. That means unleashing the thousands of apps that could come to the device if the hardware really supported them. I love my Apple Watch but it still feels like I’m using a subset of what could be a much fuller set of features if Apple were to really move its performance forward in the fall.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

631 thoughts on “Apple Watch at One: What Next?”

  1. Thanks for your thoughts. Looking back, I found the original iPhone and iPhone 3G lacking on the “network communicator” prong of the iPhone strategy as the cellular (EDGE and initial 3G) and S5L8900 processor were too slow to make it regularly useful. I can’t even remember if there were any really good 3rd-party apps on the 3G. For me, the 3GS was the first good “network communicator” iPhone.

    In both cases, I think Apple went to market “early” with what was a “bearable” 1st-gen product, with the expectation that the 2nd- or 3rd-gen would make it good. The first iPhone brought the cell-phone-as-a-computer-concept and multi-touch into the mainstream, and energized people for the future. It isn’t as clear what Watch has brought to the mainstream, as the watch-as-a-computer-concept has usability issues due to screen size, and the health/fitness sensors were already available in other products.

    Reply

    1. “In both cases, I think Apple went to market “early” with what was a “bearable” 1st-gen product, with the expectation that the 2nd- or 3rd-gen would make it good.”

      That’s no different a strategy than what Apple’s done with the iPhone

      Reply

    2. The first iPhone was definitely somewhat crippled, though still light years ahead of anything else available at the time – it totally reinvented the category. The 3G was already much better and I found it transformative when I jumped aboard the iPhone train at that point in its history. It definitely continued to improve with the 3GS, but the first generation of apps included many that were very useful.

      I’m not sure the Apple Watch has as yet been as transformative, but it’s an inherently limited niche, at least for now. In retrospect, it may well have been a mistake to have third party apps at all on the first version, and perhaps Apple should have copied the iPhone playbook right down to this detail too. But of course it launched into a world where App Stores are inherently part of how Apple launches new products now, and it would arguably have felt odd without one.

      Still, I figure version 2 should help address at least some of this, and if it does then the Apple Watch will be just fine and should grow significantly. But if these issues with apps in particular continue to persist, that will be much more problematic.

      Reply

  2. One aspect that may be overlooked is the network effects. The value of an Internet connected device is not necessarily determined by the device itself (even if you include the 3rd party apps that run on it). Instead, the value is often determined by how many people use similar devices, and how services have changed as a result of that.

    To illustrate, consider how much Facebook content creation is dependent on smartphones. Selfies, photos of meals, etc. are widespread only because everyone has smartphones. And this in turn becomes the reason why many people purchase smartphones in the first place. Smartphone adoption drove Facebook content, which then spurred new smartphone purchases.

    Similarly, we should expect the communicator aspect of smart watches to become exponentially more valuable as more people own them. If this is the case, it is not new features or improved performance that will drive adoption. It will be adoption itself.

    The key is then, what content worth sharing could be created on the wrist? What could be done on the wrist that would spark network effects? What would be the “camera” equivalent for smart watches?

    Reply

    1. This is a great question. Given how tied communication on the Watch is to the phone (and phone-based modalities), I’m not sure that’s the answer. But I agree we’ve yet to crack what sort of apps the Watch does uniquely well beyond fitness and notifications.

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    2. You think for smartphones it was camera ? I see them more as a perk, as it seems do most people around me though my sample might be biased (kids are pre-teen, adults are way past teen and grew up before lifeblogging/oversharing took off), and I might be projecting (I don’t take many pictures, and most of them are utilitarian, labels and such). The frantic shooting seems to be more a consequence of social, which happened, as you say, after smartphones took off ? Also a consequence of very recent (2-3 yrs ?) progress that turned phones into OK cameras, which, again, they weren’t when smartphones took off.

      Camera is indubitably key now, not sure it was earlier on. I’d say it was more messaging (back when texts were expensive), maybe email, then apps esp GPS, games, music.

      If smartwatches take off (I’m unconvinced: a smallish niche love them, most don’t care), we might see the same phenomenon: early killer app displaced/complemented over time.

      Reply

      1. I didn’t do too much social media pre-iPhone, so I cannot say how much cameras were used for that particular use case. However, feature phones in Japan had cameras since 2000 and eventually went up to like 2 megapixels. Japanese users took lots of photos with these phones, so I’m sure a lot were uploaded to SNSs.

        I am sure that camera usage was already quite popular pre-iPhone, and since the quality of taking and viewing photos was so much better on smartphones, that helped adoption.

        https://en.wikipedia.org/wiki/J-SH04

        Of course, this also demonstrates that the iPhone did not debut into a vacuum, but actually had a lot of preceding technology and adoption. People immediately knew how to use smartphones and what they were better for, not necessarily because they were actually that useful, but because there was precedent.

        Not so with smartwatches. Smartwatches have much less fertile ground laid out in front of them. They will have a much harder time proving their utility. All things being equal (which they aren’t of course), adoption will naturally be much slower.

        Reply

  3. Improving performance should be relatively easy in the second generation Apple watch. The current watch uses 28-nm technology. Updating to 14-nm would be an easy win for performance and battery life. I don’t know why Apple was so conservative with the first gen technology but I hope that they make a big leap for the next version.

    Reply

    1. Not only does the current AW use 28nm tech, but the SoC is based on Apple’s A5 SoC. Moving to 14nm and having the SoC based off an A9 Soc would drastically improve performance.

      Reply

      1. There is 32 vs. 64-bit to consider. I doubt they will use an A9 but likely some improved 32-bit ARM core. I think it is possible to get the 64-bit ISA improvements in a 32-bit design.

        Reply

    2. “I don’t know why Apple was so conservative with the first gen technology”

      Because they were already using up most of the available capacity of 14nm production for Iphone cpus?

      Reply

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