How the Apple Watch Solves “The Wearable Dilemma”

It has been well documented that the current crop of wearables, mostly those in the health and fitness category, suffer from a steep rate of abandon after a period of time. Reports last year said more than half of the wearables purchased by US consumers were not in use after 12 months. It seems consumers find the initial experience novel for counting steps, calories, and other features depending on the band, but after a period of time, they lose interest. One of my working theories is these devices also offer little value beyond basic step, counting, heart rate, etc., and don’t help the owner make sense of the data or even evolve in their goal setting. Whatever the case, there is overwhelming evidence the current crop of wearables are not compelling enough for the vast majority of their owners to continue using them. Here is an excellent chart from Morgan Stanley research of US wearable owners and how long they have used the device after a length of time. As you can see, less than 10% of owners still use the device after 12 months.

Screen Shot 2015-04-16 at 8.23.34 AM

My initial thinking around what Apple should do in this category was to nail the health and fitness part since those devices are the ones selling in some volume, with estimates of approximately 20m in 2014 worldwide. So it seemed there was an opportunity and interest. My theory was Apple should release a wearable that was the best health and fitness device and not a general purpose smartwatch/wearable. However, after using the Apple Watch for more than two weeks, I’m convinced this initial thesis of mine was wrong.

I have to admit the health and fitness aspects of wearables have limited appeal to me. More specifically, there isn’t a product with a health and fitness angle that has given me good reason to care about it yet. I like the Workout application on the Apple Watch quite a bit. I do run and train for competition tennis so I do like being able to track set distance or time goals using the app. But the general activity tracking of the Apple Watch, while comprehensive, is not the feature I value the most. Yet I’m certain it will be to my wife.

The broader point in all of this is how the health and fitness aspects alone don’t seem to be a feature compelling enough for the mass market to continue using it. This is where I think the general purpose nature of the Apple Watch is what is going to help it break the current pattern of wearables. In my experience, it is the diversity in the value propositions the Apple Watch offers that makes it compelling enough to keep wearing. If all it did was health and fitness, I wouldn’t keep it on all the time. I’d likely wear it when I exercise but that is all. Because it offers a range of other value propositions from notifications to glances of useful information to health and fitness to apps to the fashion of it, I’m more willing to keep using it. The applications will also continue to expand the use cases making it even more compelling and sticky. It also happens to be extremely comfortable, more so in my opinion than any other wearable I’ve tried, which also makes it easy to keep it on.

When you think about the paradigm shift I mentioned in my Apple Watch review, that of the Watch being an interaction model measured in seconds rather than minutes or hours, it brings up an interesting observation. If i’m only interacting with this product for a few minutes every hour, then why should I keep it all on the time? Here again, it is the convenience of the additional use cases for glance-able information, but also the promise of the diverse value propositions.

On this point, I did notice an interesting new behavior with the Apple Watch I’ve never experienced before with any other wearable. If I take it off during the day to charge, or for any other reason, I miss it.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

54 thoughts on “How the Apple Watch Solves “The Wearable Dilemma””

  1. So basically, it solves the issue the same way any other smartwatch (that is not only a fitness tracker) does ?

    1. No. What he is implying is that the Apple watch is inferior to everything else because now he has to buy everything he has ever owned all over again.

      Quality, craftsmanship, owner satisfaction, and pride of ownership are irrelevant. Any old thing will do the same job – as you have said many times.

      It would be tragic if he actually liked the Apple Watch, because then he would be locked-in and he would lose the option of buying another brand at some point in the future.

      Did I get all that right? Or should I have put up a link showing how expensive cables are?

    2. I’m making a broader point. I’m making a point FOR general purpose wearables, not single / special purpose ones as I originally thought. It is clear a general purpose device is the only thing that can break out of specialized use cases which are not big enough to sustain many players. SO the competition for wearables must now shift to general purpose ones. Which will actually be quite a bit harder for many players.

      1. It’s interesting to see your viewpoint change over the last few weeks.

        My view has also changed a lot over the last few weeks and my watch hasn’t arrived yet.

        I was indifferent as people speculated, mildly interested after the announcement, peak of interest for the first week or so, then mildly apprehensive since the first round of reviews.

        Now I’m starting to wonder if I ordered the wrong one. I think if all of them weren’t showing a June delivery, I’d cancel the black sport and get a blue sport with either a Milanese Loop or a Classic Buckle extra band.

        1. It’s not what it does the others don’t, it is what it does BETTER. And ultimately, if it comes down to apps which drive this farther, then all the unique ones will be on iOS given their customer base.

          I’m curious to see how the competition responds, and I’m very curious if Google does bring Android wear support to iOS. But Android wear UI has to get much better. OEMS I talk to who work with google and wear are extremely frustrated with them. Which is telling.

          1. since have been using the Moto 360 for a long time time I find it a little confusing when you say that Android Wear IU must do much better, because this is exactly what most reviewer said about the Apple watch too, it is buggy and recalls the first generation iPhone,, isn’t that a classic example of first generation issue ?

          2. Its actually not buggy. I acknowledge that android wear will speak to some it just didn’t do it for me. I felt it way too confusing and frustrating.

          3. @benbajarin:disqus ”confusing” or complex are word that has been mostly associated with the Apple watch, which makes me wonder if this confusion that you mentioned has more to do with the fact that as a long-term Apple user, you are more familiar with Apple approach compare to Google giving that my initial experience with these two products after testing the Apple watch at a store seems to be the opposite of yours,

          4. I get what you are saying but Apple watch is not complex but it is very intuitive once you understand the paradigm. With Android wear I felt like I never knew where I was, how to handle or dismiss a notification which came in bursts so I just kept swiping though notifications which got super frustrating. I hope Android wear gets better but IMO its a far inferior UI. Google Now was about the only experience i kept having with Android wear that I actually liked.

            But like I said, each will speak to certain people for different reasons.

          5. It would seem that today Android Wear is speaking to very few people while Apple Watch may have sold over two million in the first couple days. It’s quite a contrast in uptake.

          6. “”confusing” or complex are word that has been mostly associated with the Apple watch”

            The thoughtful, credible reviews I’ve read don’t say this at all. The media hype says this, but I don’t take that seriously, and neither should you.

          7. You used to say the same things too about Smartwatch until Apple made one

            do you remember how dismissive John Kirk and you
            were of the Smartwatch category when you were preaching on the value of an Apple iBand

          8. A year ago? Sure, I probably was dismissive of current smartwatches, because they were poorly designed. And when I say design I mean how a thing works, not just how it looks.

            If the Apple Watch was a piece of junk I’d say so. But it would seem Apple has done a very good job with the watch, better than I expected actually. That said, I never buy version 1 of anything, even from Apple.

            It’s not about us vs them, Apple vs whoever, it’s about whether a device works well or not. If I said some wearable device was confusing or too complex or wasn’t well-designed, I meant it. Doesn’t matter who made it.

          9. how can you be so dismissive of those who review the Apple watch after using it for a while when you haven’t even used yourself?

          10. I trust the opinions of people with good track records. Much of the media has a very poor track record when it comes to reviewing Apple products. If we believe many reviews in the mainstream media then the iPod was terrible and doomed, the iPhone was terrible and doomed, the iPad was terrible and doomed, and so on. But we know now it was the reviews that were flawed, not the products. Some people did nail it though, with positive reviews of the iPod, iPhone, iPad. All reviews are not equal. I have yet to see a credible review that says the Apple Watch is too confusing and complex to succeed. There’s a learning curve, sure, but that was also true of the iPhone.

          11. Well, it is easy to be dismissive of reviewers who are critical of something that customers are over-whelming positive about, such as when Apple reviewers are critical of Google/Android. So, it works both ways in that regard.

            The two things that really interest me about the Watch, the taptic engine and the way to quickly respond to notifications, not just receive glance-able notifications. After having spent three months in NYC, I can tell you that the taptic would have been invaluable for mapping around the city instead of constantly pulling out my phone. Oh, and the option for a Mickey Mouse face.

            Joe

          12. Good point. I was dismissive of a device whose main purpose was notifications as well.

            One thing that I personally feel is very important, is that Apple Watch seems to have placed an emphasis on quick responses. These range from heartbeats to emoji to prepared messages. Therefore, you don’t have to pull out your phone to reply in many cases. This could potentially make a notification-focused device much more appealing.

            Of course Android Wear might already have these features and I simply don’t know about them.

            I just wanted to mention that I recognise that I was dismissive of a notification-centred smartwatch a year ago, and I felt that the additional ability to quickly respond was an important part of my reversing my position.

          13. I agree that familiarity with previous products from the same company will likely be an important factor. I therefore don’t really think that “confusing” or “complex” in the absolute sense are the correct attributes to be looking at.

            Looking back in history, Windows 95 was a huge success and became the de-facto standard in user interfaces (copied by Linux, for example), despite being confusing and complex. The inertia due to familiarity tends to be very strong.

            What actually interests me most is how Apple is trying to explain the complexity to customers. Although I have not yet visited an Apple Store, the way that they display the Apple Watch seems to be very unique for a tech product. Typically, for phones and PCs, fully working devices are on a desk and customers are free to play with them. However, with the Apple Watch, A) the devices that you can try on only go through a prepared demo, B) the table top units, connected to a display, walk you through the features and the UI. It seems as if Apple fully acknowledges the complexity of the device, and realises that customers will not be able to discover its full functionality by simply playing with it.

            If this is what is important, then it follows that Android Wear has to also try hard to explain the features and UI to customers. Doing this without a direct retail store is challenging, and for this very reason, I think it might be a good idea for Google to mimic the “table-top unit” idea and put them in the stores which carry Android Wear devices.

          14. I tried the Apple watch and to my surprise I found it extremely complex and confusing and look much cheaper than i expected,
            and unlike the Android wear which is all about provided you with the right information at the right time when you need it, no one not even the store representative seems to be abbe to articulate what the watch is best for,

          15. I have no reason to doubt your preferences.

            Regarding your conversation with a store representative, it’s possible that they were not trained to answer your question if the following leaked document is to be believed. It seems that Apple is confident that visitors will already want an Apple watch. They don’t seem to care too much about people who haven’t yet been convinced through their marketing and PR.

            http://9to5mac.com/2015/03/03/apple-watchs-retail-sales-pitch-revealed-3-key-features-switch-to-iphone-focus-on-bands/

          16. you’re probably right but the point it even the reviewers (ie) benbajarin or even those who have been the most impressed by the watch such as Horace or John Kirk can’t really articulate what the watch is best for which reinforced my conclusion that Apple probably need the watch far more than consumer do

          17. I agree that Apple has failed to make a clear case, a reason to exist for the Apple Watch; e.g. a killer app.

            On the other hand, I’ve already ordered one. During the past few years, I’ve started to become increasingly annoyed that I have to pull out my iPhone from my pocket all the time. I’ve also subsequently felt that a fitness tracker would fit into my life (I need to get into shape). I’ve also rediscovered the benefit of being able to quickly tell the time, and I’ve started to wear my mechanical watch again almost every day. Interestingly, now my wife always asks me for the time instead of pulling out her phone.

            I feel that the main theme of this article, that the reason for the Apple Watch to exist is not a single killer app but a combination of features, a subset of which each individual customer will find valuable, is very true in my case.

            At the same time, from a marketing and sales perspective, this is a challenging proposition.

            And in anticipation of your response, I think that Android Wear and Apple Watch should be basically the same in this regard. The difference is that of all the tech companies out there, only Apple is capable of quickly convincing mainstream customers to buy, despite the lack of a clear killer app.

            I think that convincing early customers to buy, in Apple’s case, is strongly design and marketing driven. Retaining those customers depends on them finding the personal subset of features that are meaning for them, and this is the role of the representatives at Apple Stores and the usability of the watch itself.

          18. I’m amazed at how many twenty-thirty somethings I see everywhere are wearing watches.

            Joe

          19. Not quite sure if you’re being sarcastic or not, but I see quite a lot as well. And we also have to keep in mind that there are many Apple customers who are forty and above.

          20. Not sarcastic at all. Not only are watches a thing with younger users, it seems big, what smart watch reviewers keep complaining about with smartwatches—they are “clunky”—is a thing, too, even with regular watches. For whatever reason, big watches are in.

            I wish I still had my Mickey Mouse watch, now.

            Joe

          21. “I feel that the main theme of this article, that the reason for the Apple Watch to exist is not a single killer app but a combination of features, a subset of which each individual customer will find valuable, is very true in my case.”

            Exactly right, it is an additive experience of small conveniences.

            “At the same time, from a marketing and sales perspective, this is a challenging proposition.”

            I disagree, this kind of value sells itself to the premium consumer segment, it’s exactly what we’re looking for and why we buy Apple products.

            “I think that Android Wear and Apple Watch should be basically the same in this regard. The difference is that of all the tech companies out there, only Apple is capable of quickly convincing mainstream customers to buy, despite the lack of a clear killer app.”

            This isn’t quite right. The many small differences, the level of integration, the attention to detail and design, the total user experience, this all adds up and the result is that Apple Watch appeals to the premium consumer segment and Android Wear does not. While the value proposition may be similar, one product appeals to the segment that wants that value and the other product appeals to the segment that simply isn’t very interested in that value.

            Android Wear couldn’t sell a million devices in an entire year, and it looks now like Apple sold over two million watches in a day or so.

          22. I think we’ve had this argument before so I’ll add just one thought.

            Apple possibly sold over two million watches in a single day. Now how many of these customers do you think went to the Apple Store and noticed the small differences, the level of integration, the attention to detail and total user experience? I would expect not many, especially considering that stock ran out within the first few hours.

            I estimate that the majority of the two million watches were bought based on the power of the Apple brand. Many customers who have previously used iPhones hold the conviction that any product that Apple produces will have attention to detail and a good total user experience. These customers are comfortable buying an Apple Watch without even seeing one in real life, and probably constitute the majority of customers who ordered Apple Watches on the first day.

            This leads to my conclusion that at least initially, Apple will sell Apple Watches mostly based on fashion and Apple’s pre-established brand power. The actual user experience will strongly affect word-of-mouth and hence mid-term sales, but not the sales on the first day. We cannot conclude that the difference that we are seeing right now, that the Apple Watch is selling more in a day than Android Wear did in months, is due to superior total user experience. We don’t even have enough information to conclude whether the Apple Watch UI is indeed better than Android Wear, or not.

            I do not rule out the possibility that Apple Watch has a better UI than Android Wear. I simply can’t because I have used neither of them yet. I am however quite sure that this cannot be the main factor behind Apple Watch’s two million pre-orders on the first day.

          23. Even in the first launch event the value of small conveniences, the additive experience, was obvious. This resonates with the premium consumer segment, right from the start. There’s no need to try it out in person to understand this value.

            This is where the brand comes in, the Best Customer Segment trusts that Apple got the details right, that the user experience is good. But the value was recognized the day Apple revealed the Watch.

            You’re not quite getting my point, and I may be explaining it poorly. It’s not about whether Android Wear or Apple Watch has a better UI, whether the apps or jobs-to-be-done are similar. It’s much more about the market segment that wants wearables and what they want out of those wearables.

            Wearables in general provide value and jobs-to-be-done that appeal mainly to the premium consumer segment. This segment doesn’t buy Android, it is dominated by Apple. Now, add to that the fact that it is simply impossible for Android to match Apple’s user experience because Android is not vertically integrated, it is not a whole curated solution, which is what the premium consumer segment is looking for (and obviously didn’t find in Android Wear, otherwise sales of Android Wear devices would have already taken off).

            From this point forward I expect Apple’s dominance of the premium consumer segment to grow.

          24. I think what you are hitting on, is how the Android and Android wear appeals to you as more a technical adopter of the product. This is probably why the way Android is oriented, really to be best for those who appreciate the customizable nature of it works well. iOS is quite different and the design language is quite different. I find myself totally confused and frustrated with Anrdoid wear and Watch to have very natural UI for the design language that speaks to me. You felt different. This is just a classic example of how different folks perceive product. The question is which one is the bigger market. Right now Apple’s approach seems to appeal to more on the adoption curve spectrum in developed markets.

          25. benbajarin that’s more of a personal opinion than a real case study,
            i do no doubt the value of the Apple watch and it’s ability to sell well, but if i ask you to tell me what you think the watch is best for in the context that i already have a phone in my pocket, what will be your answer?

            been better or not than android wear as this point is irrelevant since familiarity with either ecosystem will most likely be the key to determine consumer choice.

          26. If you read my review / perspective on the watch then you will know. I don’t have my phone with me, on me, not looking at it all the time, etc.

            The other opportunity for the platform is because of the sensors that can exist on a wearable not possible on a phone. Lots of headroom to grow here which makes the location unique.

          27. It does look like the Apple Watch sold over two million in a day or so while Android Wear sold less than a million in all of 2014. Seems like consumer choice is pretty clear. Now, you can dismiss that by saying it’s just Apple fans, but at some point that argument has to run out and you need to look deeper and consider why Apple products sell very well. Maybe, just maybe, they’re actually good products.

          28. It seems the OEMs you talk to are in a perma-frustrated state. 2 weeks ago they were frustrated about plain old Android. Today they’re frustrated about A.Wear. Hopefully the glasses will never get a relaunch, or you’ll find them frustrated with that too.
            Luckily, Windows Phone OEMs are much less frustrated. Oh wait, who ?

          29. The funny thing is there is a lot of truth in your sarcasm. What Google fails to appreciate is actually how much they need their hardware partners and how much their hardware partners do not like them because they don’t treat them like a partner. This is why companies are trying to go around Google as much as possible, hence the opportunity for Cynagen, and even another smart watch platform besides Android wear.

            I’ve been in meetings between hardware OEMs and Google and you can sense that Google is much less interested in value creation for their partners and only for themselves. This sentiment will end up biting them I believe.

          30. this comment remind me that of a lot of IOS developer that feel the same way about Apple do you think that will end up biting them too ?

          31. Mr. Kenny, Please grace us all with your deep understanding of the concerns felt by “a lot of iOS developer.”

            No links to click whore websites, please.

          32. Nope because they actually make money. They can be frustrated but Apple does actually put some thinking into value creation into the ecosystem. Much more than Google does for sure.

          33. that’s a very biased approach to the situation, because those who make most of the money in the OIS ecosystem are game developer through in-app purchases, Google has done much more for their hardware partner than Apple never do for their developer, and without Google and Android the only conversation these OEM as suggested would have is bankruptcy.

          34. This is simply untrue. I’ve observed first hand this reality for hardware OEMs in their relationship to Google.

            I know OEMs are stubborn and the current ones are not well positioned. But this world from a hardware standpoint is going to look very different over the arc of time. I’m convinced hardware as a service is the way forward for most other than Apple. This is already happening in PCs where OEMs like Dell and HP and Lenovo make only slim margins on hardware but make most their revenue tying services to that hardware. I believe the same dynamics come to tablets and smartphones.

            Also, I advise most the major VCs in Silicon Valley and I can personally guarantee a lot more than game devs make money on iOS. Lots of very good iOS app business out there, they just aren’t the ones most people look for.

          35. Apple’s “thinking about value creation” seems to involve booting competing apps and accessories makers off their virtual and cement stores… are you sure they’re not complaining at last a teensy weensy bit about that ?

          36. It’s *supposed* to be that way. Google pursue their money goal, which requires users so Google have to build apps/cloud that users will like, and incidentally they need hardware to run those apps/cloud on, so OEMs have a chance to ride Google’s coattails.

            Analysts keep saying that Android OEMs can’t manage to differentiate. Yet Android is a wide open platform where OEMs can do *anything* in hardware or software -and sometimes have : pen, laptops/desktops, multiwindows, user/rights mannagement,…- but on the whole, OEMS have mostly succeeded at making very derivative phones and… not updating their OS in a timely manner, if at all: OEMs (as opposed to parts suppliers, which is a bit confusing because some OEMs are both) are mostly removing value from the Android ecosystem… Blaming Google for their failings is easy. T’was my bike’s fault when I crashed too.

          37. This is why the ones who will get this right will do it without Google because they are starting from a different starting point. Current OEMs struggle because all they think about is monetizing hardware. The new ones are coming up thinking software and services first. This is why they are going at it alone or only with minimal Google services because they too need to monetize software and services. So it is actually better for Google for there to be a hardware play, but that ship has sailed.

          38. Which consumer OEM, ever, including PCs so we’ve got 30+ years of data to work on, has ever succeeded in monetizing software and services ?

            That’s why they’re called equipment manufacturers: they do hardware. It’s very blue-collar, kinda boring, there’s little chance of suddenly bubbling up… Works the other way too: when FaceBook tried to co-design a phone, it flopped.

            Even Apple, which is not “only” an OEM, keep stressing that their job is to sell devices. MacOS is free, iOS is free, their office app is free (and I think most of the other ones too ?), their cloud services are mostly free, the margin on their app/content store is below the margin on their hardware… They use those as lock-in tools, and then extract rent on hardware sales.

          39. Exactly. Hence why I have been predicting the massive business model shift we are observing away from hardware. To this point I do not believe the current OEMs are altogether well positioned in certain categories to do this. This is what makes where Xioami can go interesting. Or other brands who are not in hardware yet, who will use Shenzhen as contract manufacturing to make a hardware as a service business model.

            You are exactly right that existing hardware OEMs are challenged. But what I’m not sure your grasping is how easy it is for anyone to make good enough hardware, around phones, and likely PCs, tablets, etc., and become a hardware player using a software or services first mentality. I have been outlining the entire case for this paradigm shift for some time which I believe you have been reading.

          40. Well, the starting point of our discussion was your “OEMS I talk to who work with google and wear are extremely frustrated with them.”. Hence my argument that OEMs have been frustrated for decades, and are actually born to be frustrated if what they want is.. to be not-OEMs, especially when they’ve had decades of failed opportunities to do just that on Windows and Android.

            If we want to move the discussion to the next step of “hardware is commoditized, so now it’s hardware-as-a-service”, I’m not sure I’m fully with you either:
            1- again, unless OEMs successfully reinvent themselves as service companies, they’re not part of that discussion, service/content companies are. In any case…
            2- I see no example of that move actually happening. We may look at Xiaomi, but.. 98% of their income is hardware, and 99% of their profits. Their “but we’re a service company !” sounds to me like the Amazon-ian “profit tap” scam, for now. Speaking of Amazon and B&N, well B&N is down to rebranding Samsung tabs, and, like Xiaomi’s, Amazon’s Fires are quickly put out when they stop offering the best capabilities/price.
            3- Notoriously absent from that discussion are ISPs and Mobile Carriers, who are the quintessential service-with-required-hardware sellers. Yet ISPs never managed to sell package deals (the last successful one was Minitel, before the Internet, back when you could bill for connections, content, and time spent, and give the hardware away for free). Mobile Carriers are having little success with own-brand hardware, and are starting to have issues with package deals (subsidized contracts) that include OEMs’ hardware.

            I don’t see other service providers (Banks ? Health care ? Media ?) being successful at package deals, anymore than my gas station is successful at selling, leasing, giving away a car to me, nor my utilities, my appliances, nor my pet-food supplier, a pet. And for pretty much the same reasons: those devices (don’t tell my dog I called him that) are personal, multi-use (well, or multi-ways to be useless… again, don’t… he’s looking at me weird !).. so in the end it makes no choice to restrict choice to own-brand or a small catalog and alienate users because they don’t like your choice of devices, or to build a mobile-carrier like scheme of subsidies, or financing, then upgrades, then discounts for BYOD…
            I’m sure we’ll see a bit of it, and Xiaomi et al we’ll keep harping they’re not OEMs but service+content providers. The proof is in the income+profit pudding.

          41. I’m sort of assuming you have read all the articles I’ve written on this on the next phase of mobile. It is not CURRENT carriers or OEMS servicing the current 1.8 billion smartphone users where this business model shift will occur. It is with the NEXT billion plus users who come online where this shift will take place. Look at Cherry Mobile in the Philippines for a great example of a model I feel will be duplicated. They are a carrier, who is also a smartphone brand, using Shenzen to drive hardware as a service. I see this happening in parts of China now, hardware as a service, look at LeTV’s offering which they also want to bring to the US. Russia, Europe, Brazil, India, all have models similarly where carriers are getting into hardware again for the most basic offerings for first time users. Their upside is in SERVICES not hardware.

            There is simply no revenue in hardware in this next phase of mobile. This is where I’ve pointed out the challenge to Google will come. Not the current users they service who have more money and are worth something to Google. The problem is that group is not growing, hence the question of growth for the company.

            To understand the point I’m making you have to understand how I break out these phases of mobile and hardware. I separate those online now with higher cost hardware from where the growth with come from. Different business models in the next era, but also where people want to go to grow.

          42. I think we’re utterly agreed on what the OEMs’ situation is. I’m just not sure how that, or how the fact they’d rather be/resent Apple, Google or FaceBook, is news.
            We’ve had the exact same thing with PCs: OEMs occupy a fragile position between contract manufacturing and value-added resellers (or the Consumer equivalent: content/service/ads+graph providers). Sometimes the brand does manage to build a following, mostly they don’t.
            I’m not sure the next 2b change that setup much: I double-checked Cherry’s most expensive phone (BTW, out of their 44 phones, 39 are Android, that ain’t bad), it’s a re-branded Zoppo ZP999… still an OEM phone, the rebranding thing has always been done, for example Orange with ZTE/Alcatel gizmos. LeTV’s story seems very similar to Amazon’s Fire: they have LeTV apps up on the PlayStore,their western devices may even have GMS (I couldn’t find any info either way).
            Looking at it the other way round, OEMs are safe because of the very fact it’s a low-margin, high-volume business. The specialty corps at the high-value-add stage (content, service, ads/graph) have little reason to get into manufacturing and mostly lack scale. Even Apple don’t manufacture their phones.
            I understand many tier-1 OEMs are feeling the pain, because they have gotten used to the nice margins that go with designing and marketing the phones (when successful ^^) in the first world, but few of them have found a way to add actual value apart from making nice devices, and they’ve sure wasted a lot of time/money/effort trying. On the PC side, the value was created by support, service, and upsell.
            I’m not even sure brands are less valuable in poorer countries, though the criteria for that value certainly change. What I’m sure of is that OEMs, even individual phones, will get less interesting to study since they’ve mostly missed their chance while they had pull. Blaming Google for that is like a spoon-maker blaming Escoffier for not being in the restaurant business though.

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