If you have read comments by Apple execs about the Apple Watch, you will notice their main target audience are people between the ages of 25-45. Actually, from a marketing standpoint, Apple will say the Apple Watch would be a great product for everybody, which is very true. But, as with most companies these days, the prime audience for many products takes aim at this 25-45 demographic. In the world of tech, a key reason is that when it comes to technology, this age group has the earliest adopters among it. Those at the upper end of this group had PCs and were dedicated video game players growing up and technology has been a part of their culture from their youth. Those at the lower age range are more tech literate than most of their parents.
One key thing about this group is they do not wear watches. The smartphone is the way they find out what time it is. Contrast that with baby boomers and seniors who have worn watches since their teen years. In my case, I got my first watch from my grandmother when I was 10 years old and have worn one every day since. This is not a trivial issue for Apple.
Getting the 25-45 demographic to buy an Apple Watch may be one of the greatest marketing challenges Apple has ever taken on. The good news is our research shows the interest in the Apple Watch by this age group is very high. Of course, Apple must convert interest into purchases of the Apple Watch, which may take a powerful ad campaign and word of mouth from those in the age group who have already bought the Watch in order to make this happen.
On the other hand, baby boomers that have worn watches all of their lives and have adopted PCs and tablets in large numbers could also be a solid demographic for the Apple Watch. Indeed, early research suggests many in the 40 and older group have been early purchasers of the Apple Watch and we have even seen high interest among senior citizens, too. But there is one demographic we are seeing I don’t think Apple or any of us could have anticipated.
Although what I am about to share is anecdotal, it has forced us to dig deeper into another age group that may also be an important target for Apple sooner than later. My son Ben, who is co-founder of Tech.pinions and a principal analyst at Creative Strategies, ordered the Apple Sport Watch for his wife and his 12-year-old daughter. On Friday, when the first Apple Watch’s shipped, it was delivered to his house but, since the family were out during the day it could not be delivered since someone had to sign for it.
Consequently, it ended up back at the main UPS depot in San Jose and Ben had to go and get it Friday evening when he got home. He was coming from meetings in Napa and did not get to UPS until about 8:00 PM. UPS usually closes at 6:00 PM on Friday but, because of the Apple Watch, this hub stayed open to take care of any customers who might want to pick up their Apple Watch that could not be delivered. He found at least 125 people still in line and about 90% of them there to pick up an Apple Watch. What he observed was very telling. At least a dozen parents received the package and handed it to their child. Ben observed that most kids were late elementary or Jr. High age.
Ben’s decision to get an Apple Watch for his daughter was two-fold. First, as professional researchers, we wanted to get first hand feedback from a younger demographic that we have always seen as important users of technology. In fact, we put out some of the earliest research about iPads being used by kids under 5 when most people were thinking tablets had little value for small children. The other reason is she is about to go to a school a 45 minute bus ride each way and he wants to be able to keep in closer touch with her through the day since she will be quite a distance from home. Her iPhone will be left in her bag on silent so the Watch will ensure she doesn’t miss timely messages from home.
Our early research suggests a demographic of 10-16 may actually be a powerful target audience for the Apple Watch. One thing we have observed is a lot of kids in this age group carry smartphones now. While I personally think 10-12 may be too young for a smartphone, teens have had smartphones for years. In fact, they pretty much live on them today. Include a smartwatch in their mobile lifestyle and it adds another dimension to their communications with their friends and it would not surprise me if this younger demographic becomes a major one for the Apple Watch. While we believe this teen demographic is interesting, we know from our research the highest interest levels in the Apple Watch are from the 25-45 age group.
One area Apple has put a lot of emphasis on, unsurprisingly, is the design of the Apple Watch. This is a key area for the 25-45 demographic. They are very fashion conscience and design will be an important factor if and when they choose to buy an Apple Watch. That is not to say design is not important for other groups but I think this is one of the reasons Apple has put so much emphasis on design since this is so important for the 25-45 year olds.
As a researcher, this will be one of the areas we will be watching very closely. Although we suspect there will be a good adoption cycle for the first year, it will take Apple convincing the 25-45 year olds to buy an Apple Watch in big numbers if Apple is to grow their smartwatch market. But convincing this group that has never worn a watch may be one of the greater market challenges Apple has tackled in some time.
I agree with the thesis that you lay out, but I have one question. You mention,
I actually question this. I have looked around my neighbourhood which is a suburb of Tokyo, and I see at least half of the men in your 25-45 age group wearing watches. I have also seen research in Japan for the 10-50 age group that shows 75% owning at least one watch, and half wearing it more than 5 days a week. Although I would agree that wristwatch usage has lessened with the popularisation of mobile phones, it still seems to be a very significant. I would hardly say that “they do not wear watches”.
My personal experience is that if you use public transport, then you have to make sure that you’re in time for a bus or a train. This means that you want to check the time while walking to the station, or even sometimes running. A watch is much, much more convenient for this. This is a major reason why I tend to feel uneasy when I only have a phone to tell the time.
Maybe people have stopped wearing watches in California because they drive in their cars all the time. Maybe in areas where public transport is more common (and runs on schedule), it’s more usual for people to still wear watches. There are many possibilities.
I would very much welcome more data on your key assumption that people don’t wear watches anymore.
The survey that I referred to above is a simple Internet survey and the link is below (contents in Japanese). I can give a simple explanation if you wish.
http://www.marsh-research.co.jp/mini_research/mr201407watch.html
My sense is that many analysts are severely underestimating wristwatch usage, maybe because they drive cars to work, and as a result, the market potential for the Apple Watch is much much larger than what analysts are predicting.
Naofumi,
Your comment is inherently obvious. However, sometimes the obvious needs to be pointed to!
Thanks.
But then you have to look at the cities in the US. I have recently spent a great deal of time in Chicago and NYC where my observations bear out Naofumi’s. And a lot of the companies I work with tour to universities all over and I have to say that, again, the number of young adults wearing watches always surprises me. Maybe a rural vs urban thing? idk.
Obviously, I do not have the data people like Tim and companies like Creative Strategies has at their disposal. Just my observation.
Joe
I would have to agree. I see a lot of watches being worn among the business people I deal with, from 30-ish to 60-ish age range, men and women. Easily more than half.
In the US the data shows that less than 25% of people in the 18-43 demographic wear watches. In many countries where they have great mass transportation, watches are more common. In the US that is true people in NYC where we see more people with watches there. But the impact of most people now carrying a cell phone or smartphone where the time is always available has made these devices much more common as the source for telling time.
Is there any indication if that <25% is an upward trending number? Even at that figure, that seems to me still pretty substantial.
Joe
It is substational but compared to 80% of people in the 43-65 age group it is relatively small. There has been little upswing in the 18-43 age group over the last 5 years so it will be interesting to see if smart watches will change that.
Thank you for the data point. Very interesting, particularly the huge contrast with 80% figure for the 43-65 age range. Although the report that I saw does not directly show usage by age group, I saw no evidence of such a large difference in the data for Japan.
One other piece of information I would be very interested in is what negatives people feel about wearing watches. Are watches uncomfortable? Do watches leave an ugly suntan mark? Are they worried that they might hurt their baby?
One thing I’ve noticed in the Apple Watch reviews is that they unanimously praise the bands for how comfortable they are. The display tables in the Apple Stores where they let you try the watches on, also seem designed for the sole purpose of seeing how they look and feel on your wrist (the devices you get to try on don’t even work). A lot of effort seems to have been directed towards alleviating the fear that watches may be uncomfortable.
One problem I had with the Nike Fuelband was that it was very very uncomfortable when typing on a laptop. The Apple Watch, at least with the sports band, is amazing in that it isn’t uncomfortable at all when doing this. The curves on the Apple watch are also very soft and I think it’s unlikely that they would hurt you baby’s soft skin. I feel that a lot of the design decisions of the Apple Watch were made, not only for the aesthetics, but for comfort and to address the reasons why people might stop wearing them.
One comment regarding the teenager age group.
Is it a coincidence that this age group, even in California, ride on the bus to school (mass transport), and have their days full of meetings (classes) where they have to show up on time?
I think, maybe not.
As Horace says, the Watch market is not just people who wear/wore watches, it’s people with wrists and at this stage, certain iPhones.
That’s always been kind of obvious for me. I’d actually remove the iPhone restriction too.
Having said that though, the percentage of people wearing watches right now is a data point that will likely affect short term sales. In the long term, I agree that it’s probably irrelevant.
I’m wondering it it’s a generational question, or a personality one. Watch equipment rate, like fashion sensitivity (the two are probably linked), seems age-independent. Even notifications dependency seems individual-based, past the teenager/young adult phase.
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