Apple Watch Series 4 to Drive Strong Upgrade Cycle

When I first saw the new Apple Watch presented at the Steve Jobs’ Theater I immediately said it would drive a strong upgrade cycle, and now we, at Creative Strategies, have brand new data from a study we conducted across 366 current Apple Watch owners in the US the week leading up to in store availability. The study was an international one that cut across several geographies touching a total of 557 consumers. For this article, I will focus on the US data only.

Our panelists were self-proclaimed early adopters of technology with 64% of them owning an iPhone X. Eighty-Four percent of the people who answered our online questionnaire were men, very much in line with the average composition of the early tech adopter profile.

Apple Watch Served its Base Well from the Get-go

Our panel owned a good mix of models: 41% has an Apple Watch Series 3 with Cellular, another 13% owns an Apple Watch Series 3 Wi-Fi only, and 15% has a Series 2. What was a surprise, considering how early tech this base is, was to see that 30% still owned an original Apple Watch.

One might argue that maybe the reason why these users are still on the original Apple Watch is that they are not very engaged with it. The data, however, says otherwise. While they are not as engaged as Apple Watch Series 3 owners they share their love for the same tasks: decline calls, check messages and check heart rate. The most significant gap with owners of more recent Apple Watch models is in the use of Apple Watch as a workout tracker. Here original Watch owners lag Watch Series 3 owners: 62% to 76%.

Satisfaction among original Apple Watch users is also strong with 93% of the users saying they were satisfied with the product. While 93% is a lower satisfaction number than Watch Series 3 with cellular at 99%, we need to be reminded that the original Apple Watch was introduced in 2014. Satisfaction at 93% for a four-year-old product is quite impressive.

When we reached out to a few panelists to ask why they did not feel compelled to upgrade so far, they mentioned that software updates and battery life kept them happy and that it would be a change in design and compelling features that will drive them to look at a new model. In other words, the original Apple Watch was still serving them well.

Strong Intention to Upgrade

Apple Watch Series 4 seems to hit both upgrade requirements for original Apple Watch owners as 76% say they plan to upgrade with 41% who have already pre-ordered while another 32% plan to do so in the next three months. When asked to select the most compelling new features that made them interested in upgrading and the faster processor was mentioned by 80% of the original Watch owners. This was followed by the bigger screen (75%) and the ECG (61%).

Apple Watch Series 3 owners are the same but with different priorities. The larger screen is the most important driver, followed by the faster processor and the ECG. The intention to upgrade is also more cautious with 29% saying they are planning to upgrade (54% already having preordered) with some users being concerned about using the old bands on the new model and some uncertainty on which size they would prefer.

Early Tech Users find Gifting Difficult

We have discussed before that early tech users seem to find gifting new tech hard and Apple Watch owners on our panel are precisely like that. When we asked if they were planning to buy the new Apple Watch Series 4 as a gift only 26 percent said they were. This is despite Apple Watch commanding a Net Promoter Score of 72 among panelists. Among the users who are planning on gifting Apple Watch, 51% will give one to their wife, and another 16% will give one to a parent. When asked which features are motivating the purchase for someone else, four stood way above everything else: larger screen (49%), ECG (45%), and faster performance and fall detection (both at 39%).

Among those intending to gift, 22% already preordered and 48% plan to buy within the next three months.

The Apple Watch User Base is Deep into the Ecosystem

Probably the most fascinating finding of this study is to see how entrenched in the ecosystem Apple Watch users are. While many could see Apple Watch as an accessory, I firmly believe that users who are looking at it as an essential tool to manage their day and their ecosystem of devices and services are the ones who get the most return on investment. Not surprisingly, multi device ownership across the panel is quite high: 88% owned an Apple TV, 75% owned Air Pods, 71% owned a MacBook Pro, 67% owned an iPad Pro, 44% owned an HomePod.

Early tech users are a window into the future, which is why it is so valuable to study them. While the time to turn from early adopters to mainstream users might vary, I think this ownership data best illustrate what Apple is working on when it comes to its user base. I have been saying for years that Apple cares more about selling more products to the same users than just expanding its overall market share in one area. As Apple moves more into services, it will be the combination of products that are present in a household that will drive engagement and loyalty and build an audience for life.


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Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

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