iWatch: It’s About The Ecosystem

Carl Schlachte / February 21st, 2014

When you are as big as Apple only certain markets work because real growth must come in staggeringly huge increments. Only platforms matter—not technologies—because platforms become ecosystems; properly nurtured, they are self sustaining. Witness the iPhone: a radio, a screen, and some processing handed over to app developers becomes a game box, a newsreader, a mail client, an ATM…

Have you ever wondered how a watch was so-named in the first place? When did carrying a timepiece become “pocket watch” or “wristwatch”? The term watch is believed to have come from the Old English word “woecce”, meaning quite literally, “watchman”—it was how the town watchman kept track of his shift. Watches as timepieces were meant to evoke keeping an “eye” on the the town or the camp; guarding against unseen enemies. When it was your turn to be “on guard” you were posted to the watch for a certain period of time. That period of time was measured by the sun, the moon, then a clock tower and eventually in the 19th century, a device on our wrists. The history here is important because it was the function (watching) that derived the form (portable timekeeping) The simple act of telling time, became a platform on which the applications around timekeeping could be implemented. Measuring time was a way of coordinating remote events, calendaring, traveling, a scientific instrument, a navigation tool, and even a weapon of war. You can run a lot of apps on a timepiece.

While everyone has been focused on potential iWatch news: curved screens, iBeacon, Burberry, medical device hires and trademarking of names like iWatch, Apple has been busy building its next ecosystem. Apple picked your wrist because the last two hundred years of market research showed that many of us were willing to put a scientific instrument there. After that it has been an engineering effort to find out just how many useful sensors Apple’s engineers could cram into the space a human wrist afforded without making the wearer look like a dork. Apple jumped with glee when Samsung did huge amounts of public research for them for free with a Galaxy Gear Watch. Apple has seen just about everything that is likely to be a contender and all the competitors are standing around and well… watching.

To build an ecosystem, Apple is going after sensor density on your wrist as a way of truly keeping “watch”. If they are building this thing called an “iWatch” then they are going to gather data about you from your wrist and let a developer community write apps to monetize that dataset. Apple will provide the platform and developers will provide the usability. Apple will take their usual cut. You can bet iWatches will have cutesy “change the clock face” functionality, or text message alerts, but those apps will be sitting over a dozen unseen sensors buried in a liquid metal bezel, looking out from underneath a scratch-resistant sapphire face. Apple will hand out developer tools and a set of APIs that enable the making of medical diagnostic apps a breeze. Apple will have thought through how iWatch data is synchronized and secure; they’ll have modeled app pricing in the forthcoming “iWatch store” and have Jony Ive designed interchangeable watch bands at the ready. Apple will have considered third party peripherals based on protocols on which they intend to collect royalties. Importantly Apple will have decided than an iWatch requires an M7 motion coprocessor in your iPhone. This M7 requirement will force a mini upgrade cycle in iPhones for buyers of iWatches who are “stuck” on an iPhone 4. Ecosystems feed themselves after awhile.

My guess is that if such a device exists Apple will shy away from true “FDA approved” medical apps themselves because liability is a concern. Apple does not want to be paying out in a lawsuit for Uncle Don’s diabetic coma if an app fails to perform for some reason; they will want to punt this problem to the app developers. You thought all those hires they’ve been making with medical device expertise were for apps they were developing themselves? Probably not. Those well paid doctors are Apple’s new medical app evangelism team ready to help you develop your app. That shiny new set of devtools from Apple will have a shiny new indemnity clause in the shrink wrap agreement, so read it closely!

Because it’s a platform, Apple will likely announce it in the spring and tell everyone in the meantime that the iWatch is formally shipping “at the end of the summer”. Tim Cook will show a couple of in-house developed apps to get the creative juices flowing. Mark Parker, Nike’s CEO, will be on stage to demo Nike’s iWatch fitness app, which Tim Cook will gush over being “super excited” to use. Phil Schiller will breathlessly announce that the developer kit is shipping now! Eight hours later Apple will announce over twitter a mind-boggling number of dev kit downloads, and the race will be on. Will Apple make money off of an iWatch? Sure. Will they make a killing off the ecosystem around it? You can bet your life on it.

It’s a platform right? Lets get a jump on what could happen on the wrist that will make this the next must have gadget from Apple. Put in your suggestions and votes in the comments section and we’ll post a follow up “Top 10 Requested iWatch Apps” next week. Here are mine:

  1. AppleTV remote control: I can waive my arm around like a wii remote and control my TV.
  2. [insert your favorite] counter: steps, heartbeats…
  3. Proximity sensor to my iDevice: if I get too far away from my iPad, my watch beeps and buzzes.
  4. Configuration device: any iDevice I touch, knows my passwords, wifi settings etc. (remember they’re stored in the cloud not the watch, the watch is just verifying me).
  5. Child alarm: I buy one for my kids so I know where they are in the mall—look for the ability to link more than one iWatch to an iPhone.
  6. Parent Watch: my elderly parent gets one. I know when she’s up, if she’s getting her exercise, if she’s running a fever, if she’s taking her heart meds…
  7. Credit card: with iBeacon and my phone in my pocket I only need to wave a watch at a pay station…
  8. Heart attack warning: need I say more?
  9. Glucose monitor
  10. 911 emergency beacon with vital stats at the ready when the paramedics show up (if not already there via a phone upload)
  11. Bonus app: Flappy Third. An iPhone game in which a poorly rendered 2D style bird has a broken wing. By flapping your iWatch enabled arm up and down you can help the injured bird fly and avoid pipes. Insanely difficult to play and you look creepy playing it in an airport.

Carl Schlachte

Carl is a serial entrepreneur, having been Chairman and CEO of multiple public and private companies. He is currently CEO of Ventiva, a private thermal management company, as well as Chairman of Immersion (Nasdaq: IMMR ) and a director at Peregrine Semiconductor (Nasdaq: PSMI). You can follow Carl on Twitter at carlsuqupro.
  • jfutral

    This doesn’t sound very sexy, but one problem I would look forward to Apple solving, if this is to be a real device, is how well the iWatch deals with being sweated upon. A lot of people have highly corrosive secretions. Some guitar players can’t get a set of strings to last one gig. A lot of high end watch wearers don’t wear the same watch exclusively. If this is to be a day in/day out device, this will be a problem for many.

    Joe

  • doubter

    I think the whole smart watch idea is like the Segway: a concept in search of a need. We know how that worked out for the Segway.

    • aardman

      Yeah, the Segway flopped because it was never able to attract app developers to its platform and Apple has historically shown the same inability, right?

    • Majipoor

      The Segway is a one-purpose product while the iWatch is a hardware platform able to hold many different apps. These are two completely different beasts.

      • “The Segway is a one-purpose product while the iWatch is a hardware platform able to hold many different apps.”

        There you go again writing as though the iWatch exists and you know exactly what it is.

        conjecture: the formation or expression of an opinion or theory without sufficient evidence for proof.

    • DarwinPhish

      One of the main reasons why the Seqway failed was because main states & municipalities regulators would not license them for roads nor allow them on sidewalks. As Carl points out, Apple will try to stay away from anything that needs regulatory approval.

      • doubter@earthlink.net

        If the regulators banned the Segway they were saying “This is too dangerous and we don’t need it.” In the case of the smart watch, I don’t think anybody will say they don’t need it; it will simply be ignored for lack of interest.

        • Space Gorilla

          A lack of interest? A lot of people said that about the iPhone, and then the iPad. Success isn’t in the ‘what’, it’s in the ‘how’.

    • GlennC777

      If Henry Ford has asked you what was needed I suspect you would have said “A faster horse.”

  • Majipoor

    I think the iWatch is the ideal device to leverage iBeacon micro-location at home because unlike a smartphone, a watch can follow you everywhere every time.

    Apple may build a home automation ecosystem through the MFi Program, in which case Google’s Nest acquisition would quickly become quite old-fashioned 🙂

    • Chris Anderson

      Exactly!

  • meltajon

    My top three:

    * mobile payments

    * identity authentication — kill the password!

    * contextual/predictive interface — basically like Google Now

    After playing with my Pebble for a couple weeks, I’m starting to doubt the need for third-party iWatch apps. In order to get a good look at the screen, you really have to hold up your elbow awkwardly and uncomfortably high. While smartwatches are great for glancing at notifications, fiddling with a smartwatch longer than 3 seconds at a time is just a bad experience.

    Thinking practically, any data input into the iWatch will need to be minimal or passive. All of the magic will happen on iDevices. I totally agree with you — the iWatch will be about the ecosystem, not the iWatch itself.

    • Chris Anderson

      Oh yeah, mobile payments is huge and the iWatch will need an iPhone pair for that.

  • Chris Anderson

    You know, in certain circumstances, the iWatch could receive network / internet data without an iPhone, so long as iBeacons were implemented in fixtures in a store. You see, Bluetooth (upon which iBeacon is but one protocol) has a networking protocol known as PAN (Personal Area Network). If a store, then, has Wifi routers and iBeacons, one could use an iWatch without the need/requirement of an iPhone. Besides, there will be many uses for the iWatch as mentioned, dealing with medical, athletic, and entertainment use cases, where a full network may or may not be required.

    So, mark my words, the iWatch, although it would will be best served paired with an iPhone (to access many more features and premium features at that) will be very useful on its own. Samsung and the other manufacturers did not give this route much thought, but Apple will.

    • “Samsung and the other manufacturers did not give this route much thought, but Apple will.”

      Apple will? How are you so certain? Do you have some sort of insider knowledge?

      • Chris Anderson

        I’m not certain, but I’d place my bets on Apple. Samsung made this tethered smart watch that is not catching on, so there’s one indication. The other indication that Apple can pull it off is that they are gaining a presence in places where public Bluetooth/Wifi access for an iWatch would be necessary. For example, many stores have adopted iPads as point of sale systems, which means they would provide at least one iBeacon with the iPad, and this points towards having iWatches useful as a payment system, as well. This could help to make the iWatch work autonomously.

        Insider information? Well, I’ve worked in the embedded systems industry for over a decade, and I have some insight into how communications, sensors, and embedded systems work best. Couple this with how Apple typically works (the walled garden and all) and one can come up with good guesses. If memory serves me correctly, too, Apple has not exactly messed up in recent years when pushing out new product categories…..

  • Ariel

    Time. Messasging/Voice Response, Vital Signs/Health Monitor. Music. iBeacons/Payments.

    • “Vital Signs/Health Monitor” — How will that work? Will these devices need regulatory — FDA — approval?

  • Evalenzuela

    There are some news about Elon Musk met with Apple, what make me think about a feature to use the iwatch as a car key. You are going to be able to lock/unlock your car and even start it as long as you are wearing your iwatch.

    • Peter

      That’ll work really well for valet parking

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