Is it Time for Apple to Open the Apple Watch to the Android Crowd?

We now know Apple has done well with the Apple Watch and that it outperformed the iPhone and iPad in terms of units shipped during their first 9 weeks on the market. However, they are doing these strong sales with the watch only connected to the iPhone. Of course, this makes sense. If the watch becomes popular and only works with an iPhone, it could cause many users of other smartphone operating systems to switch. Also, it creates great incentives for those who want the Apple Watch to buy or upgrade their current iPhones too. Strategically, this move to have it only work with the iPhone is important during the Apple Watch’s initial roll out.

But I have an interesting question about the Apple Watch’s future. Is it, strategically, a side product to the iPhone to help sell more iPhones or was it created to also be a viable standalone product with its own profit potential and market impact? It is clear that, at least initially, it’s designed to help sell more iPhones and, since the iPhone is Apple’s real cash cow, one could argue it needs to continue to be a side product to the iPhone in order to help boost sales of the iPhone itself.

However, if you listen to the rhetoric from Tim Cook and Jony Ive, it is actually a piece of well-designed fashion jewelry and should be thought of in that context too.

On the surface, this seems contradictory since it would be hard for Apple to push both positions and still do the Apple Watch justice due to its great design and place in the fashion world.

Apple actually has a precedent for supporting other operating systems with mobile devices. When the iPod came out, it only worked with the Mac. It was basically a “side loaded” device in that you had to connect to the Mac to get the music downloaded to the iPod. The iPod sold well but its audience of users was small since the Mac had only about 4% of the PC market at that time. In those early days, it did influence some to buy Macs so they could use an iPod but to really deliver the type of audience they promised the music industry to help save off piracy, Apple clearly needed to expand the iPod’s audience. To do that, they made it work with Windows-based PCs and that is what really made the iPod a mass market hit. Interestingly, they did this so well they basically dominated the market for mobile MP3 players and, even now, nobody has been able to compete with them in the dedicated MP3 player market.

Over time, as the iPhone included all of the functions that were in an iPod, demand for the iPod decreased. Only recently has Apple refreshed the iPod line as there is still interest, albeit small, for a dedicated mobile MP3 player tied to a great music store and app ecosystem. However, if Apple does want the Apple Watch to have a real impact in the marketplace and change the market for smart watches, they eventually need to open the Apple Watch up to those who use Android. A few weeks back, I wrote a piece that suggested Android is the new Windows. For the Apple Watch to reach its real potential as the game changer Apple wants it to be, it needs to have a broader audience than just iPhone users.

But the question is, will Apple do this and if so, when? Put yourself in Apple’s position. The iPhone is a global success that continues to grow and bring a huge amount of cash and profits to Apple, not unlike Windows was to Microsoft in the past. But, unlike Windows, Apple owns the hardware, OS, software and ecosystem which gives them tighter control. More importantly, they also control the channels. The iPhone drives their profits and, with each iteration of the iPhone, they seem to get more and more switchers and followers. But this also presents somewhat of a dilemma in that they have positioned the Apple Watch as a tech and fashion game changer and suggested that everyone will want an Apple Watch. But to achieve that goal I have to believe, at some point, they must make it compatible with Android and perhaps even the Windows Phone if they want the Apple Watch to have the global impact they hope it will have.

My personal guess is Apple will keep it proprietary to the iPhone for at least the first 18-24 months but eventually make it compatible with at least Android in order to help them gain the kind of impact they desire and allow it to be a broader industry game changer. Yes, there will be Android smart watches coming out that could rival the Apple Watch. But even so, if Apple made their watch compatible with Android, I am willing to bet they would get the lion’s share of the smart watch market. Their styling and channel make it hard to compete and the Apple Watch would be a big hit with those users too.

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Tim Bajarin

Tim Bajarin is the President of Creative Strategies, Inc. He is recognized as one of the leading industry consultants, analysts and futurists covering the field of personal computers and consumer technology. Mr. Bajarin has been with Creative Strategies since 1981 and has served as a consultant to most of the leading hardware and software vendors in the industry including IBM, Apple, Xerox, Compaq, Dell, AT&T, Microsoft, Polaroid, Lotus, Epson, Toshiba and numerous others.

111 thoughts on “Is it Time for Apple to Open the Apple Watch to the Android Crowd?”

  1. Over thinking it, the iPhone is here to stay. Of course Apple will milk it to boost phone sales, I would be very surprised if at some point Android if not window phone support was added as it would only increase sales. Ultimately, they need to continue in adding apps and funtionalit to the watch, that will always be the ultimate selling point. How useful it is to the end user.

  2. Tim, doesn’t this scenario mean that Apple will have cooperate with Google, and in return open the iPhone for Android wear ? And whose to say Android wear won’t do well on the iPhone ?

    1. I don’t think so: Android offers everything need to use any smartwatch with it as a baseline as far as I can tell. MS’s smartwatch, Pebble Time offer more functionality on Android than on iOS because of that. So Apple probably don’t need to make any kind of deal with Google to be able to link up iWatches and Android, they just need to want to do it.
      Since the reverse isn’t true, I’m sure non-Apple smartwatches will suffer on the iOS side, androWear included. And that’s before design / brand loyalty considerations.

    2. All they would need to do, as they did when they made the iPod work with a PC is for it to have an Android App for Android phones and tie it directly to the Apple Watch. They would not even have to talk to Google…and it would open Android phones to work with the iPhone. I realize this is blasphemy in Apple circles but as I wrote, the question is whether the Apple Watch was only designed to drive iPhone sales or will it have its own profit center. Depending on Apple’s long term strategic position of the Watch will determine what they actually do in terms of broadening its market.

      1. “All they would need to do, as they did when they made the iPod work with a PC is for it to have an Android App for Android phones and tie it directly to the Apple Watch.”

        I am sorry, Tim, but this is not the same.

        All the PC had to do was run iTunes and transfer the data too and from the iPod.

        The Apple Watch is much more integrated with the iPhone than that. Also a huge amount of the hardware Apple knows is in the iPhone may or may not be in a given Android device.

        So while your point is that Apple circles would refer to this a “blasphemy” the problem is that the integration is too deep for this to be a worthwhile device on Android.

        Of course when the Watch is the Phone then all bets are off.

        1. So is Apple Pay coming to Android? Is the Secure Element of the A-series processors coming to Android?

          The full functionality of the watch is not merely a software issue with an easy port.

          1. Apple Pay doesn’t have to come along for the ride. Just like any developer, Apple can choose what to include/exclude, and of course, there’s always the matter of hardware requirements.

            Let’s say I get hit in the head, and desire an Apple Watch. The presence or absence of Apple Pay may not weigh heavily to me in that decision, being able to use it, otherwise, on my Android phone might be more important.

          2. It would take more than a hit in the head for me to buy a “smartwatch.” But you’re point dovetails into what I wrote: “The full functionality of the watch…

            The primary roadblocks to Apple Watch on Android may not even be hardware. It may be more deeply rooted. Apple has publicly said they want all the privacy-related features (HealthKit, HomeKit, etc.) to happen ON DEVICE rather than in the cloud. Under iOS, Apple can control that.

            On an Android device, with software from anywhere, they potentially lose that control. I have serious doubts that Apple would want to expend the energy to try to migrate those features to Android (and then support them indefinitely).

            Thus it would take a pretty hard headshot for an Android user to buy a watch that primarily told the time, displayed email and SMS messages.

            But then again, I don’t really care. This device category holds little interest to me. And I don’t rent music (or software), either.

        2. All other smart watchs/bands have no issue working with Android (many offering more features on Android than on iOS), so I doubt technical limitations, be they hardware or software, are any kind of hurdle.

          1. Yes, but they are more designed to the Android thing.

            All this would do would be to reinforce the impression with the Android crowd that the Apple stuff doesn’t do anything much differently from Android.

            The point being is that if you run decent hardware with a small subset of what is possible then what you are doing is reducing the value of the integrated platform.

            Without a lot of the hardware the Apple watch would just be another “meh” in a large list of “meh”s on the low end Android hardware.

        3. I understand your point, but I don’t think that it completely precludes the possibility of Apple Watch on Android. There are ways to work around the issue that you raise.

          Regarding hardware fragmentation (Apple not knowing what hardware is available on a given Android smartphone), Apple Watch is compatible down to the iPhone 5 which means that it does not rely on stuff like the “secure element” or Touch ID. It might need the latest Bluetooth and WiFi standards for communications, but I think that this might be all that is required. More importantly though, Apple could simply limit the devices that it supports. For example, it could say that it only supports the Galaxy S6 or the LG G4.

          1. I think you’ve made my point. What is the point in limiting it to only certain hardware. I think even Android with the new release are putting together a minimum spec. But even that’s a moving target.

          2. Well, when Apple introduced the iPhone, they limited distribution in the US to AT&T. In fact, in many countries including Japan and China, Apple did not partner with the top carriers until very late in the game. By limiting distribution to a 2nd or 3rd place partner, they managed to get their full cooperation. Given the power that these top carriers had at the time, it was a very effective strategy.

            Limiting partnerships and distribution is a rather common tactic in channel management.

      2. Isn’t blocking an Apple watch app on the play store enough to stop Apple’s plans ? Or is it a cause for an anti-trust ?

        1. Considering that it’s never been done (other than malware) I don’t think it’s going to happen. Google doesn’t forbid apps, Apple does. Even if Google did, there are other stores available in the Android ecosystem. You can even sideload.

          1. Google did remove AdBlock Plus from the Play store, and it’s certainly not malware.

            As for downloading and other stores – it isn’t a problem, but might be a barrier for enough people.

            Also , i don’t think an a Watch app would be enough to support a watch – a watch has to talk with all kinds of applications . It’s either has to be a system level service, or some library that Apple distributes android app developers, and than again, there’s the question of Google blocking.

          2. I wasn’t aware of the Adblock Plus prohibition, but one example is sufficient, that’s why alternate available stores are important. Multiply that for Apple.

            As far as a single App being sufficient to run the watch, the Android kernel is open. Apple can see what they need to do right there. That non-Google versions of Android exist is proof. They all run Android Apps though.

            Finally, should Google “forbid” the Apple Watch, though there would be no precedent of forbidding a device, they would be just as contemptible, and worthy of scorn. I love watching jerks fight each other and root for neither.

          3. If Google Does says they blocked the Apple watch Because Apple isn’t willing to cooperate with them, i’ll understand.

            Otherwise, such moves could hurt the android ecosystem indirectly , and that’s not a good thing.

          4. See, as purely a consumer, and an ardent believer in what was originally “the PC revolution”, started by Apple, I see that as Google and Apple’s problem to solve, not mine. It’s exacerbated much more, since most these issues are non-technical. The technical issues are generally easier. I flat out don’t care about their interests.

          5. Is it only their interests when Apple colludes with book publishers to raise ebook prices and succeeds? is it their interests when google creates a forum search engine just to kill the competition – and afterwards just kills this forum search engine ?

            I don’t believe so. Actually in many areas , like you say , the technical stuff is easy. But what hurts us consumers a great deal is the business stuff and monopolies, or quasi monopolies.

  3. One of the key Apple strategies is lock-in, and the iPhone-exclusive iWatch helps a lot with that especially if it is a success. The iWatch could be strong enough to be an ecosystem motivator by itself, ie at phone-purchase time, people won’t even consider switching to a phone that’d make them switch their iWatch too.
    From a straight $$ point of view, it would take a lot of $350 every 4-5 year (I’m guessing on both duration and ASP ?) watch sales on the Android side to make up for lost $700 iPhone every 2 year + apps/content + network-effect devices (other iPhones, Macs…) sales on the iOS side. Probably closer to 10 than 5, which means even from a straight revenue point of view, Apple would have to estimate that every 10 watches sold on the Android side cost them no more than one iPhone switch to Android.
    Paradoxically, if the iWatch ends up not very strong, then it probably makes more sense for Apple to let Android owners buy it, that’s a extra net sales at no cost in terms of lost iPhone sales.

    Of course in the real world it’s probably not as clear-cut as that. iWatch might already be losing some sales to iPhone owners who realize it’s means committing to staying with iPhone forever, and choose FitBit/Pebble (soon AndroWear ?) instead. There might be a middle way were Apple degrades functionality when used with Android (assuming functionality is a driver, which I doubt). Etc…

  4. I’ve contemplated this possibility myself. I think it might give Apple more leverage if they forged an exclusive partnership with an Android OEM rather than cooperating with Google. It would also help Apple to work around the Android fragmentation problem if they only had to support a few devices from a single OEM.

    Given how Apple handled the carriers at the iPhone launch, in this scenario, I think it’s more likely that Apple would choose to partner with a second, third-place OEM like LG instead of the market leader Samsung. It would make it much easier for Apple to bully this OEM around and force them to comply with the hardware specifications that Apple dictates.

    1. What if Apple did that with MS instead ? MS must be desperate for any kind of pull thus willing to make lots more concessions, WinPhone is much more of a threat to Android than to iOS, MS did do a solid to Apple decades ago (they gave Apple a few hundred millions and committed to keeping Office/Mac) as opposed to igniting a holy war…

      1. I was thinking about this possibility as well, but I wasn’t sure how it would benefit Apple Watch sales. If I could make the case that Apple would get significant traction by partnering with Windows Phone, then I think it would be a possibility. I thought that going with LG or somebody would be a safer bet.

        Strategy-wise for Apple, I think it is better to get the Android camp fighting among themselves and ignoring Google. Instead of fighting against the whole Android camp, they could partner with a selected few, divide them, and get them fighting each other.

        1. But don’t we have to first gauge Android interest in an Apple Watch? Is the only reason wearables are doing so poorly in a larger ecosystem because they just aren’t as good or well thought out at delivering what people want out of a wearable (thinking in line with what the iPod brought to the MP3 player market at the time).

          Or asked another way, did Android wearables not do as well because they weren’t good enough (at any of the factors, technical, aesthetics, or cosmetics), or because Android owners just aren’t into wearables? If the former, Apple could have a shot. But if the latter then there is nothing for Apple in the Android market, especially if a any portion of Android owners are so to avoid Apple.

          Right now and the foreseeable future (at least next 5 years), unlike the iPod or even the iPad, I think the Watch is more about deeper connectivity to the Apple ecosystem and customer experience rather than a standalone device, even if it could be a stand alone device.

          In terms of standalone device, if battery design improved at any level, what would Apple add? I think it would be more sensors and such that make the Watch more unique and useful for the few stated larger Apple strategies—Homekit, Healthkit, music, and such—rather than cellular data.

          In a larger sense, these strategies become more of Apple’s products than the hardware, giving Apple’s hardware business something to tie into rather than _just_ being a hardware company. I still don’t know how well that will work for them. These kinds of larger topology strategies did not do well under Jobs, but I think this is where Cook and Jobs could be quite different. Jobs was really a “product-in-the-hand and I am user #1” kind of guy. Cook not so much, I think.


          1. At this point, I’m just throwing around some possibilities.

            Two things though;

            Apple is not giving out sales data and the reason they give is that they don’t want to give information to competitors. Why would they do that? What competition do they have in mind? I don’t think that Apple ever worries about Android Wear invading their own ecosystem because theirs is very strong. Instead, I think it’s about Apple invading Android’s ecosystem.

            I’m still not sure why Apple chose to provide Apple Music for Android. They could have chosen to completely ignore Android but they didn’t. Previously the argument would have been that Apple is only interested in those who are willing to pay lots of money, and that Android users tend not to pay. However, given the extremely cheap price of Apple Music in countries like India, it seems to be that Apple is now serious about earning money from regions where iPhone market share is very low and purchasing power is relatively low. The Apple Watch strategy might follow what they are doing with Apple Music.

          2. Apple isn’t giving out sales data because they want to make it as difficult as possible for competitors to figure out what the product mix is, what the popular configurations are. The copycats will come of course, but why make it easy for the makers of knock offs.

            Apple Music I think is about drawing people into the ecosystem, and also about connecting consumers with artists. You need reach for that long term plan. Of course Apple will have to work the kinks out, what they’re trying to do with Apple Music is quite complex. Apple has lots of work to do yet on syncing and storage.

          3. I agree that Apple is trying to make it difficult for competitors, but I have trouble understanding what competitors Apple would need to worry about. I very much doubt that Apple would need to worry about Android Wear on iPhone. Apple can defend its own ecosystem pretty easily. It would be much harder if Apple wanted to succeed with Apple Watch for Android smartphones, and in my opinion, Apple’s secrecy suggests that Apple is going to attempt this harder option.

            As for Apple Music, as I mentioned in a previous comment, what intrigues me is Apple going into differential pricing for content (music and apps). I see that as a sign that they are getting more and more serious about penetrating markets like India. I find this the more interesting possibility.

            Whereas the Mac only made it to 5-10% of households in the US, the iPod penetrated probably something like 80% and made the Apple brand ubiquitous. This was a precursor to the success of the iPhone and the iPad. I would not be surprised if Apple intended to repeat the same strategy in India. With the Apple Music pricing being set as low as the local competitors, this is something that could work.

          4. What I mean about Apple Watch competition is simply that Apple doesn’t want to give away the knowledge of what colors and materials are popular with Watch buyers. Given the unique user experience and value Apple delivers, Apple doesn’t really have competition, they’re playing their own game.

            I think we agree on Apple Music, I do see it as a way to draw people into the ecosystem. But it has to be good. My kids tell me the discovery aspect is excellent, far better than other streaming services. But Apple has long needed work on syncing and storage and it seems Apple Music is no exception. Still, it is obvious Apple will improve on this front.

          5. 1. That’s a good question. I do think Watch will help potential Android fence-sitting switchers (again, primarily the premium segment). I can only speculate, and that poorly, of what competitors Apple may be speaking of and why. Maybe someone from Techpinions could hazard a more educated guess. Maybe in the Insider columns or in the forums. 🙂

            2. I think Occam’s razor applies here. The Android solution was already in place. There are likely a large number of Android users already. Music/Beats is a software solution, not a hardware solution, so little chance of diluting hardware sales, particularly in the market segments most likely to use music streaming in the Android ecosystem, i.e. lower than premium Android users are likely more inline with streaming services than even Apple users. No matter how you package it, there is little “premium” about any music streaming service. The only premium play is in hardware and Apple has that currently pretty well covered. So again another way to appeal to premium Android fence sitters. And Cook is more pragmatic than Jobs. I have no doubt Jobs would have unapologetically cut Android support from the get go regardless of market overlap. That’s not Cook’s style. IMHO.

            Applied to Watch, low-end Android users (the overwhelming bulk of the market share) have no appeal to Apple ecosystem and Apple watch in how they create hardware products.


          6. Siri was on its way to Blackberry and Android when Apple bought it, and those versions got quickly canceled. I think “because it was there” does not explain why Apple is making an Android version of iMusic.
            I think the “foot in the door” + “Cook” explanations are probably closer to Apple’s thoughts.

          7. Other than “it was there” was not the sole reason I laid out (I am a big believer in multilateral reasoning), I do think Siri and Beats are two different products. It’s one thing to make a voice UI more uniquely integrated vs dishing out music tunes that are already available (with the few temporary exclusions excepted) in a multitude of services and distribution methods.

            [never mind the differences between already in the market for a few years vs “on its way”]


          8. I’m convinced Apple has long term plans to enable artists to make money, to directly connect consumers and artists. The opportunity is too obvious. But it will take years, and I think Apple has to wade in slowly, the rights issues are a real mess. With that in mind the more people Apple Music reaches the better for the long term goal.

          9. “Meet the new boss, same as the old boss”-The Who
            I hope I’m wrong, cynicism is an acquired trait.

          10. In the current music industry artists might receive 5 percent of the revenue they generate. Maybe less given the crooked accounting that goes on. Artists often end up bankrupt because they owe the record company more money than they generate. Everything is a cost to the artist that the record company recoups. It would be worth your while to learn more about how the record industry actually works.

            In a direct artist to consumer model within Apple’s framework it would be the standard 70/30 split. Ask any working band or artist if getting 70 percent of the revenue their work generates instead of 5 percent or 2 percent, etc would be “same as the old boss”.

          11. Like I said, I hope I’m wrong. Your position requires trust, of which I am sorely lacking.

          12. Did you not read what I wrote? Apple could completely flip the current revenue share, from virtually ALL the money going to the record company to 70 percent going to the artist.

            My position only requires the ability to do math. It is actually impossible for it to be “same as the old boss” as you wrote, based on the revenue share alone.

            But I’m interested, paint me a picture of how Big Bad Apple screws the artist by letting them keep most of the revenue generated by their work.

          13. I read what you wrote, and it’s very topline and one dimensional. Since you want me to conjecture and don’t have the patience to see how things play out (for better or worse), I’ll offer a couple of concerns.

            Who decides which artists make it? A lot of power will be taken from the middlemen and put into the hands of a much larger middleman. Are you sure they will remain noble? Are you convinced the terms you describe will stay that way?

            But even more important to me, I care about the consumer’s choices and the treatment of the consumer. Today’s middlemen truly, but truly, suck. Why don’t you think there are as many artists with staying power, with creative license and liberty as past generations? It’s because of the “old boss”. Believing the “new boss” will be better, for me anyway, is a leap of faith, of trust. Trust that I don’t have.

            I repeat, I would be delighted to be wrong.

          14. There has only ever been one “boss”, artists have always been indentured servants, there has never been a time when artists were in control. Of course there are exceptions, when an artist becomes successful enough, when an artist is also the rights holder (most artists don’t own the rights to their work), when an artist is more independent and works outside the current system.

            The state of the music industry was as bad or worse decades ago, it is simply a case of ‘the older we get the better things were’. There were cases long ago where artists had creative control and liberty, and there are cases today where the same is true. But it is, and has always been, the exception.

            What we’re discussing is the removal of the boss entirely. Meet the new boss, whoops there is no boss.

            To answer the question of who decides who makes it, the record industry does that for you. Long ago there was a thing called payola. If you don’t know what that is, read up on it. Essentially the labels paid radio stations to play records in order to make them popular. Of course there were other avenues that bribes took as well. Payola still exists, it is just done differently now so it is legal. The current music industry creates successful artists artificially. It is in no way a fair system based on talent.

            Now we come to issue of middlemen, and you’re right, they truly suck. Apple has the opportunity to disintermediate. In a model which connects the consumer directly to the artist, there is no middleman. Apple simply provides the framework which enables the connection. Apple is kind of a dumb pipe in this sense.

            Apple has already been doing this for more than a decade, providing an easy distribution and payment system for music. The only part that needs to change is the ownership of rights and the revenue share paid to artists. Apple pays the rights holder, and in most cases that is the record label.

            But, if it becomes possible for an artist to distribute their music directly to consumers, and get paid for it, and keep 70 percent of that money, that one simple “top line” item is a game changer.

            This model can work right now, but there’s still too much friction in the process. Some artists have done this kind of thing for a decade or more already. What we need is a system with very little friction that connects artists and consumers, and we need discoverability. Apple Music is doing very well on the discovery aspect, and within that framework discoverability is also crowd-sourced. This is a much more fair way of deciding who makes it.

            Add to this the revenue share flip, with 70 percent of the revenue going to the artists the number of artists that can make a living creating music becomes an order of magnitude larger.

            So we can see that your concern of “Who decides which artists make it?” isn’t a concern at all. We would simply move from an unfair artificial system to a fair organic system. And the fair organic system will allow an order of magnitude more artists to succeed.

            This also requires no trust whatsoever. I don’t trust Apple, I trust their profit motivation. It is in Apple’s financial interest to foster a system that encourages great content, since this is a key part of making the ecosystem attractive.

            All we need to trust is that Apple is a for profit company that wants to keep making a profit and growing its ecosystem.

            Oh, also keep in mind that once this kind of system begins to happen, Apple can’t possibly control it. Others will copy it, this will become the new normal. Apple will simply be part of it. But today it is Apple that has the best opportunity to get the ball rolling. Even so, it’s going to take many years.

          15. A truly well thought out response, and we agree on most of it.

            Still, if Apple successfully disintermediates the current middlemen, thus becoming a middleman themselves (with Iovine on board no less), it still requires that leap of faith that they won’t change the rules and not allow “just anyone” into the music store (I think we can agree that won’t happen).

            This is pure conjecture, but also shows how much I don’t trust them. I wouldn’t be surprised if agreeing to not put music on Youtube (for instance) might not be a future condition. I do find your position logical, if a bit hopeful.

          16. If Apple disintermediates the current middlemen, that means there is no middleman anymore, only a framework for connection, distribution, and payment. In the new framework the artist becomes the rights holder, and that takes care of your concerns about conditions. The rights holder has the power. And this naturally transfers more power to the consumer as well.

            Apple would first have to act against its own financial interest, (which we agree is not likely), and also somehow control the rights holders (very difficult, perhaps impossible given that Apple will not be able to control the new system once the old system has been disintermediated). Also keep in mind that Apple cannot exert the level of control you’re imagining on current rights holders. How could they suddenly, magically be able to do it? Add to that the lack of motivation to do so. It isn’t hope that makes me think this, it is pure logic. As I said before, you don’t need to trust Apple, you only need to trust that Apple wants to make a profit.

            I still think you aren’t fully appreciating how significant the flip in revenue share would be. I can understand that of course, people with little direct experience re: the music industry don’t truly grok how much the artists are screwed over and how much money is stolen from them.

          17. See, I see anyone between the producer and the buyer as a middleman. There’s actually a chain of middlemen.
            I appreciate the flip, and f it were to happen, the pendulum may be too far to the artists favor (over the consumer’s), since there will be fewer mouths to feed. Still, I would rather see them get it.
            Like I said, let’s see how it pans out, and it’s good if my cynicism isn’t justified.

          18. You’re imagining bogeymen where there aren’t any. In the direct artist to consumer model there are other parties involved, certainly, but there is no entity *between* the artist and the consumer, that’s the point. We can’t start changing definitions to suit our arguments, you can’t just call everyone that is involved in some way a middleman.

            A middleman is an intermediary who takes control of the goods in question (rights holder) and turns around and sells those goods to the consumer, thereby keeping a portion of the revenue generated by the sale (in the case of the music industry they keep almost all the revenue).

            A framework that allows artists to sell directly to consumers is not a middleman. A cost involved in the support and operation of the framework doesn’t count (Apple’s cut), it still isn’t a middleman.

          19. I don’t see how a store cannot be a middle man. They are the one with direct control of the transaction with the customer, and they are the arbiter of what is carried in a store.
            I see what you described as an “agent”, a more parasitic form of salesman, and still a middleman.

          20. There are many ways a store can be constructed so as not to be a middleman. You’re thinking of a retail store where suppliers enter into purchase agreements and then manage the goods from that point on (making decisions about where to display the goods, how much stock to carry, etc) until the consumer buys the goods. The store is actually the customer as far as the supplier is concerned.

            The way iTunes sells music isn’t like that at all. It is more of a bazaar with enough in the way of rules and structure to allow buyers and sellers to conduct transactions. I realize you want to paint Apple as a middleman (or worse) in this scenario, but that is simply not the case.

            And before you bring it up, if Nashville Pussy can sell the explicit version of their song Keep On F**kin’ through iTunes, we haven’t got much to worry about. Even the sample of the song isn’t censored. I’m sure there are edge cases where some artist had some problem re: censorship, but edge cases are a logical fallacy. As long as the bazaar works at including all legitimate music almost all the time, that’s fine. Mistakes will be made, no system can be perfect. You often say one example proves a point, but again I’ll remind you that is actually a logical fallacy.

          21. Essentially an App Store for music which would be what they wanted in the first place. How the touring circuit and promotion would work, I have no idea, but I strongly suspect that Iovine and Co do.

          22. Something like that yes, but with far less in the way of rules, since content is much easier/safer when it comes to user experience. Plus the artist would be the rights holder, so Apple can’t exercise much control, even if they wanted to. But I doubt they want much control, it isn’t necessary re: content.

            On the touring/live event side, I’m intrigued by how much experience Apple is gaining putting on live events, especially their music festival.

          23. Exactly. I think it’s reasonable to take Apple’s claim at face value that music is in it’s DNA, etc and they’re trying to rescue music, but for artists rather than distributors. Like the iTunes Store, it’s about services and content rather than an attempt at profit, which may or may not come, but the music industry (again artists, not the parasites that bleed them dry with no clue for revival), is in dire straights and needs a jump start stat.

          24. Agreed. I think about my kids (all musicians) and the possibility of them actually making a living with a very small fan base. That only becomes plausible if they can keep 70 percent of the revenue their music generates, AND in that model they never sign away the rights to their music.

          25. Yes, it might be that Apple Music is available for Android simply because Beats was also available for Android.

            However, what interests me in this regard is that Apple Music is $2 in India as opposed to $10 in the US. This is apparently the same price as local music streaming services in India. They are also bringing differential pricing to Apps so some iOS apps are now available in India for 16 cents, which is a strategy that Google Play has yet to follow. It appears that Apple is using differential pricing of content as a strategy to penetrate developing countries.

            The way I see it, Apple seems to be investigating various ways to enter developing markets with low disposable income. I would not be surprised if Apple Watch for Android was one of these.

          26. Some other things to keep in mind. Actual available catalogue in each country, and the licensing variations in each. Sometimes it just costs more to distribute music (whether the same artists or recordings, or different) in one country than another. That is one area that the EC continues to wrestle with since agreements don’t cross borders. And how much of the catalogue available in the US is the same in India, or vice versa.

            Maybe that addresses everything or not, I don’t know. But I am sure it is a major factor. The percentages may be the same, but the industry costs may not.


          27. Yes, I’m sure that it is an important factor. I’m not aware of how much iTunes music downloads cost in India, before Apple Music, but at least in Japan, iTunes downloads were priced differently for the same tune than for the US. For music and for video content, differential pricing has been the norm for a long time.

            What has been interesting for me at least, is that mobile app pricing (via App Store or Google Play) has not used the differential pricing model. Instead, the same prices have been applied globally, with minor adjustments to accommodate exchange rate fluctuations. Considering the very different income levels in each country, this is a disastrous situation marketing wise, and creates the incentive for rampant pirating, which is exactly what we are seeing.

            What we have been seeing is that whereas music and video industries have been aware of the marketing issues of applying a single global price, Apple and Google have not. Android OEMs have sold cheap smartphones in developing countries, but Google has not recognised the need for cheaper apps. If I was working in a local branch office, tasked with increasing Google Play sales, I would be pounding HQ for this. I would be demanding that they introduce differential pricing, or otherwise give up on selling apps altogether. I would consider HQ’s stance as either boneheadedness or negligence.

            Now interestingly, we are seeing Apple beat Google to the game in introducing differential pricing to the App Store.

            So to summarise my too long comment, in terms of Apple Music, yes, differential pricing is probably a result of how music labels market their content globally. However, for apps, the pricing options are under Apple’s and Google’s control, and the mistake of applying a single price globally is their fault. Apple apparently is starting to fix this. Google isn’t yet, despite being the preferred OS in developing countries.


          28. Re 2. I think Apple A) feared that heterogeneous families would choose a cross-ecosystem supplier (Spotify…) B) think that in the long run, iMusic is a foot in the door (hey did just spend billions getting it, so they must think it’s important) that might sway some phone buyers, especially if they make their Android app sucky (which they should have no problem doing: iTunes/Safari Windows anyone ? :-p)

          29. Regarding Apple Music: It’s clear that Apple has a large play in motion , with regards to the content(music/video/books/news) business. Many of their latest acquisitions deal exactly with that[1].

            My guess is: The media business cannot work optimally on a single platform.Apple already tried. So they had to make this move.

            The watch is different. It could work as is.


          30. True, but given that Android users are generally very hesitant to pay for content compared to iOS customers, in terms of revenue, I would guess that adding Android to Apple Music will only increase revenue by 20% at most. Hence I don’t think that Android will significantly add to the media business, at least in developed countries. This is a very different situation from when Apple released iTunes for Windows and opened the door to Windows users.

            That is why I tend to think that Apple views Apple Music for Android as a strategic play in order to penetrate markets like India in the near future.

          31. Sure , i agree. For Apple the media business is not about money. You can even say the App business isn’t about money. They are strategic assets.

            Being limited to a single platform is a weak move: It lets android’s content ecosystem lock-in users in a variety of ways , it splits the power in the industry into more hands, and it gives Google revenue which it can invest in Android – without the big benefit( i.e. control distribution of important media assets).

            So this prevents all that. But its very bad for consumers – do we need another monopoly ?

            So i hope it fails.

          32. Hold on, picking up the pieces of my mind after it exploded! 😉

            Okay, almost there…

            How in the world is the more participant diverse, unmanaged, ecosystem more of a monopoly than the closed off, fully integrated and controlled ecosystem? Once you’ve crossed the iOS gates, you’ve entered a true monopoly. The saving grace is non-dominant market share, you still get to not enter the gates. Should iOS “win” it rolls all possible monopolistic behavior under one roof.

          33. “Should iOS “win” it rolls all possible monopolistic behavior under one roof.”

            Not really. Having a “monopoly” on your own product is barely half of “all possible ‘monopolistic’ behavior under one roof”.

            The reason MS was found Monopolistic and abusive, was not because they had two products called Windows and Explorer. It would not be because it places both of those on its own product, the Surface, even if it were to the exclusion of other browsers. It’s because it dictated to OEMs with threats and leverage that they had to take Explorer and make a prominent desktop link to it or they didn’t get Windows, etc.

            Google is in a similar position to MS: it can and does dictate to Samsung et al how they must do this or that to get certain services; and how they cannot make both Android clone phones and Android phones (just as MS made it difficult for PC OEMs to use Linux).

            Since Apple doesn’t supply OEMs, then it simply does not “roll all possible monopolistic behavior under one roof”. It cannot.

          34. Apple does supply OEMS. What do you think the iOS Developer Agreement is? They can also block any accessory from utilizing their patented dimensions, and ports.

            Still, Anti Trust law is not about protecting other companies, per se. It’s about protecting competition on behalf of the consumer. Should Apple “win” and gain dominant share in mobile (>90% let’s say), it would have monopoly share AND be behaving anti-competitively. Remember, it was the lesser transgression that brought MS into hot water, the bundling of Internet Explorer, and they didn’t even have an “App Approval Process”.

          35. What’s interesting, is that the consumer still appears to “win” as iOS is developed and grows. So, I don’t see any monopolistic tendencies of iOS as particular concerns for the consumer in the future…

            “Compatibility” is what MS was selling. In the end, it comes down to selling one product: Windows.

            In effect, Apple isn’t selling iOS, it is selling a number of hardware products of its own. It enhances the value of these through its developer relationships.

            Whatever the relationships Apple has with individual developers, Apple is still providing more variety of app and ecosystem (through jobs to be done and depth of application, rather than number of copies of one app).

            This is because Apple is going for “depth”, and “value”, versus “compatibility”. The breadth follows, because both consumers and developers appreciate the value provided by the platform. Apple’s App stores will remain the most diverse, with the greatest variety of deeply specialized apps.

            Thus, iOS creates a virtuous circle, not a negative one (as has been the case with MS, Google, Android, etc.)

            Furthermore, it will be seen that the splits between OS X, iOS, Watch OS (not to mention kits like homekit, healthkit, etc.) will provide the consumer and developer alike more depth, variety, value and options than MS’ unified Windows approach, or Google’s lowest common denominator / whatever approach.

            You focus on depth, you get breadth. You focus on breadth, you get a shallow muddy puddle.

          36. How does any of that protect competition as per antitrust laws?
            How can I choose not to deal with Apple post purchase? Or only deal with them as it suits me, the consumer.

            As we have this conversation, Apple is a convicted price fixer, so please ease up on the “virtuous circle”. No one company should have the level of control (should it win) over individual users.

            I remind you (maybe) that the original AT&T was broken up.

          37. …Apple is a convicted price fixer, so please ease up on the “virtuous circle”.

            Are you saying that you didn’t purchase your Mac Pro because of the much repeated iPod “halo effect?”

            The above comment assumes the sense-of-humor you’ve displayed in the past still operates on Mondays.

      2. “(they gave Apple a few hundred millions…)”

        Amazing how just seven words always gets two facts wrong: 1.5 is not exactly a “few”; and getting non-voting stock which was later sold at a profit is not exactly “gave” (neither did it exactly “save” Apple from bankruptcy).

        1. Amazing how some people can contribute nothing but nitpickpicking over meaningless details.
          Sorry, it was $150m, I remembered $450m, my bad.
          As for the “giving” part, I stand by it, at the time given Apple’s state and trajectory, hope of ever making that money back, let alone a profit on it, cannot possibly have been a factor.
          If you’ve got anything constructive and/or of substance to contribute, that would be a nice change ?

        2. Now now, don’t “nitpick” about details. Just accept that Microsoft saved Apple. It didn’t have anything to do with antitrust. That’s not the droid you’re looking for. Maybe Apple can return the favour and buy ActiveSync, etc, and let them keep their precious (windows).

  5. I don’t think the next iteration of the Apple Watch will follow the iPod’s footsteps by offering “compatability” with another operating system specifically. I believe the next version of Apple Watch will have its own custom 3G chipset enabling it to be divorced from an iPhone. This means no tethering to any phone. Think of a web based iCloud configuration tool that sends push instructions to the Watch. If you configure your Watch with an iCloud account and there’s no tethering… You’ve got your Android compatability without having to eat at the dog’s breakfast table.

    1. You still need some way for apps to push notifications to the watch, ie a phone-side app. This can be done right now with no change to/collaboration from Android (just look at what Pushbullet can do on a Windows desktop: push notifications, send/receive texts, files, ..).
      Apple could do the same right now over Bluetooth, wifi, and indeed 2/3/4G. There needs to be a will though.

    2. “…without having to eat at the dog’s breakfast table.”

      Never heard that phrase before.

  6. Apple Watch is another building block for the Apple Network of Things. Android compatibility may come as a result of the Watch becoming a standalone product (as Chris Marriott already pointed out), but I don’t see this as a priority for Apple. Apple is focused on a specific kind of user experience which resonates with a specific segment. I don’t see them deviating from that path.

    1. Many Apple products are independent but it’s the symbiotic relationship between everything that makes Apple hardware/software unique.

      You could own an iPad and a Galaxy S6 but you’ll never achieve the synergy of an iPad and an iPhone. And the same will be true for the Apple Watch if/when it becomes an independent product. While you may be able to download apps and check your heart rate iMessage will remain restricted to Apple products.

    1. Actually, it may be better on Android, since those deep hooks into YOUR music would be missing. Right now, more than a few people’s libraries have been totally messed up by Apple Music.

        1. It’s also the dangers of single source, kind of like inbreeding. Google matches songs too, so you don’t need Apple Match at all, and it’s separate.

          1. All true. The endless me-too battles waged between tech companies will always ensure that people will have things to buy.

            Personally, I’ve had a 30+ year professional and consumer relationship with Apple and its products. I have an arms-length trust in their motives and services.

            I have less-than-zero trust in the data-mining operation that lies in the heart of Google.

            While I use some of Apple’s “single-source” exclusive services (FaceTime, for one), most of what I require is from third parties; Apple is just my choice of platform. The creative nature of my professional and semi-professional work have always been well-served by Apple’s products. And so far, Apple has given me no reasons to consider any alternatives. If I’m “locked in,” its because I’m satisfied. The future is always uncertain.

            But then, I’m not the kind of person who needs to buy every new tech thingy just for the sake of owning it. I need to be convinced of the actual value and mindful of any risks before I plunk down cash.

          2. No quarrel friend. Even I just dropped $4K on a Mac Pro, but that was because I want to have an OSX based computer available, and there’s no Mini that they can sell me that I would use.

  7. “Apple actually has a precedent for supporting other operating systems
    with mobile devices. When the iPod came out, it only worked with the

    I’m afraid your thinking on this is completely backward. In 2003, Apple was a tiny company struggling to have relevance. Their brand didn’t have much salience outside the computer/tech sphere, and in the computer sphere, only an extremely tiny percentage of people used macs, most of them to do professional work on mac-only or formerly mac-only apps. Basically there was no apple ecosystem back then, no reason beyond better UI and better product aesthetics to buy any apple products.

    Apple badly needed to expand their market, their customer base, their everything. Declaring that “hell froze over” and releasing Itunes for Windows gave them the leg up they needed to gain mind share and customers who would never contemplate buying a mac computer. And after only a few years of selling Ipods to the entire population instead of only to Mac users, they were able to leverage that cross-platform compatibility of their music products into a huge increase in mind share and brand awareness, a huge jump in the salience and relevance of their brand. Cross platform itunes was what created the Apple ecosystem and created the magnet that started to draw people into Apple’s orbit.

    Today, Apple is the largest, most powerful technology brand in the world. They make a supermajority of the profits in every category that they choose to enter. Everyone in the world knows what apple is and those who can afford it lust after Apple’s products. All of the factors that made making Itunes and ipod cross platform a good idea are now blowing in the other direction. At this point, making their watch cross platform, thereby surrendering the synergy of their ecosystem and weakening the magnetic pull that draws people into buying Apple products, would be the stupidest thing they could possibly do.

    1. True, and I agree that putting Apple Watch on Android does not make much sense in general. However, there are markets where Apple is still weak, and most notably, these are the developing countries where only a small portion of the population can afford Apple devices. Apple, to ensure that it will continue to be as relevant tomorrow as it is today, must make sure that it will capture market share as the middle class grows in these countries.

      When we attempt to predict Apple’s strategy for the future, we have to keep this in mind. Instead of evaluating the strategy based on the world as it is now, we have to do so based on the world as it might be 5 to 10 years out.

      Essentially, it boils down to this. Would opening up the Apple Watch to Android benefit Apple’s position in India, Indonesia, Vietnam, Thailand, Brazil, etc.? Is there a threat of alternative smartwatches gaining popularity in these countries and creating a lock-in effect which would jeopardise Apple’s prospects in the future?

      Of course, there is still a lot to be learnt. For example, we don’t know if $400 for the Sport will be low enough to attract Android users in developing countries (it’s very likely that it is not). Apple will collect this data.

      My understanding is, and this has been significantly strengthened by the differential pricing they are applying to Apple Music ($2) and Apps (16c) in India, that Apple is very open to adapting its ecosystem to the realities of developing markets. Apple is very serious in doing everything short of creating low-cost, compromised devices, to gain traction in the markets of the future.

      1. I think you’re overlooking the key part of Apple’s strategy – look at China, where they have had very low market share for a long time but are growing enormously. They aren’t growing in China because they’ve created a lower cost product or because they’ve compromised the magnetic pull of their ecosystem. They’re growing there because of the desirability of their brand.

        As long as they can continue to maintain their company as the most desirable, aspirational brand of tech devices in the world, there’s no need for them to compromise the synergy of their ecosystem. The only thing they need to do is to continue to cultivate their brand image in the minds of the middle classes of the world. And arguably, reducing the synergy of the ecosystem, such as making their watch function with non-Apple phones, would result in a reduction in the desirability of their brand.

        In short I think lock-in of competing devices is the wrong way to be looking at this. Apple has already, without fanfare, made an android switching app, designed to make it simple and easy to switch away from android to Apple phones. Rolex doesn’t have to worry about whether or not anyone else in the world makes a watch that could lock in that

        1. Each country is unique and what worked in one country will not necessarily work in another. It is impossible to know what will work in each country without deep analysis, but what we do know is that Apple has tried hard to make iPhones affordable in India by selling outdated models for longer than in other countries. Furthermore, we know that Apple Music in India is 1/5 of the US price, and that they are starting to sell iOS apps starting from 16 cents. Contrary to what you say, Apple *is* reducing prices in India to match the reality there. Apple India does not seem to agree with your strategy of simply cultivating their brand image.

          1. I wonder about financing or installment payments. The end of subsidies was long thought to be a Very Bad Thing ™ for Apple. But quite the opposite has happened with a move to paying for devices over the length of a contract. Much the same way people in the first world who can’t really afford something like a BMW still own one by leasing it, turning an expensive purchase into affordable monthly payments. Perhaps Apple has plans along these lines, especially for developing nations.

          2. I have no idea.

            As far as I understand it, subsidies and instalment plans are notoriously complex and are different depending on country. I briefly looked up instalment plans in the US, and I couldn’t understand how it worked. Even in Japan, I have difficulty understanding the instalment plans that we have.

            I also have some doubts about the ubiquity of credit in developing countries. I tend to think that easy credit is a first world thing, and countries which still maintain old values (which is true still to some extent in Japan) are more cautious.

            So really, I’m not in a position to discuss credit in developing countries, but my sense is that old values would tend to hold that back.

          3. I’ve long thought Apple should facilitate payment plans, but you make a good point about developing nation culture, could be they don’t want this kind of arrangement and it simply would not work.

          4. Yes, they’ve been offering $300-ish phones in China and India for a while now by keeping the oldest generation around for an extra year. They’re a global company and thanks to sites like ebay it’s possible for someone to buy their lowest cost phone and resell it elsewhere, so they’re limited as to what they can do in BRIC by what makes sense for them to do in wealthier regions like the US and EU. Which is why they’ve stuck to simple things like continuing to sell older generation hardware, rather than something more liable to backfire like introduce a special “poor people’s iphone.”

            At some point, if their growth curve starts to flatten out, I think they’ll cut the price of the base current model phone to $500, which would push the 3 year old BRIC model down to $200. But that won’t happen until their internal forecasts say that the long term profit will be greater with a lowered per phone profit.

            Aside from issues of hardware integration, I really don’t see them finding it strategically sensible to make the watch cross platform like the ipod was cross platform. Like I said, things are different now than they were in 2003.

        2. Ben’s a smart guy. So are you and Naofumi. There are obviously arguments for both sides, but it could simply be the glass of iced water for those in hell that Steve offered with the iPod and iTunes. It may not be possible for at least another gen or likely two, but it might be a more affordable way for the less fortunate to learn about the Apple alternative since the iPod is fading into the night and there is desperate need to stay connected now.

  8. Who exactly is the user that cannot be easily swayed to switch to an iPhone but at the same time is quite interested in an Apple Watch?

    I can’t imagine those people being numerous enough that Android compatibility would be prioritised higher than device independence, at which point said compatibility would be moot.

    Although the analogy used mights seem fitting at first glance, comparing the actual circumstances reveals massive differences.
    People didn’t want to switch from Windows to Mac for the sake of the iPod because it’s ridiculous to buy more expensive hardware to get access to less software that’s mostly incompatible with everything you have for the sake of a single purpose accessory.

    The costs and benefits of switching from Android to iPhone and Apple Watch are not even comparable with the costs and benefits of switching from Windows to Mac and iPod twelve years ago.

    1. Android doesn’t need the Apple Watch. They have their own models, and more are coming. Presumably Apple might want to reach a larger audience.

      The right thing, is what many commenters here have said already. If possible, make the watch independent of the phone. This does bring up a stinker though… If it’s done before a years availability of the first generation, Apple would have milked customers by not coming out with that version first.

      1. I find the suggestion that the second generation watch will be independent to be hilariously optimistic.
        Spend just a few minutes thinking about what that would require and it will be clear why it will take a long time.

        1. Agreed. Apple Watch as an independent device is years away, and I suspect the Watch will always be more powerful as part of the Apple Network of Things, you’ll get more out of it as a dependent device.

          1. It may not need to be entirely independent. It won’t be as useful as with an iPhone, but it could still borrow data and gps from the host, as well as notifications, sms, etc. stuff that’s already coming with OS 2.

  9. Oh. You mean Apple is going to put iOS on Android Phones? Not gonna happen. The Apple Watch is an experience that is integrated with Apple devices. It cannot achieve the same experience with Android. For example, will Apple add Siri to Android?

  10. Yes, there will be Android smart watches coming out that could rival the Apple Watch.

    It’s not like there aren’t any today…

        1. Lag will be gone in 2 months with Watch OS2. But when will Moto 360 actually catch up in design, materials, UX, service, apps, security, payments, health metrics, and such?

          Sure, the 360 will sell millions if it’s good enough with killer pricing wars driving out most of the profit. Sales start at $65 for V1 and $165 for V2.

          OK. 360 shows promise. I don’t see it getting in the same league for 2 years though.

          1. Lag will be gone in 2 months with Watch OS2

            They said the same about Watch OS1 so whatever

            But when will Moto 360 actually catch up in design, materials, UX, service, apps, security, payments, health metrics, and such?

            It does have good design (even better IMO), uses the same materials, Google Wear has good UX (don’t know what you’re on about) , Google services are pretty darn good, it does have health metrics. The only thing missing is payment, but I’m not really keen in paying with a watch, what a stupid concept. So I don’t know what the hell you are talking about.

            wars driving out most of the profit

            As a consumer, I don’t care about profit. At all.

            I don’t see it getting in the same league for 2 years though.

            Same league? There’s nothing to catch up to mate, what are you on about?

          2. Agreed. Except you’re lying to yourself.

            You’re saying that Watch OS has better UX while admitting there’s lag. You say difference in materials where there is none. You keep mentioning “catch up”. Catch up to what exactly?

            You make no sense.

  11. Interesting. Apple has over 90% of all mobile profits, continues to outpace their nearest competitor Samsung by ridiculous margins and per Cook the iPhone had one of its the strongest Android-conversion rate ever…but you think Apple should open up the Apple Watch to Android?!

    Been hittin’ the sauce Tim?

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