Is the Apple Watch a Winner or a Harbinger?

Melbourne Herald Sun, Thursday August 13, 2015


After the fabulous, hugely rewarding success of the iPhone and iPad, at first glance the Apple watch seemed an obvious step to take outside of Apples’s computer space. The clever little wrist accessory is in effect a tiny computer with many of the bigger machines’ capabilities. And it is an Apple so how could the passionati resist. Sure enough they were queuing outside the Apple shops the days before it was launched late in April.

If 4.2 million sales in three months looks successful you’d be right. But the question becomes one of sustainable growth versus "harbinger" sales. Remember my article last week about "harbingers of failure"? I’d been pondering the iWatch in the back of my mind as I wrote it. Now one of the world’s most celebrated marketers is saying it out loud.

Al Ries is author of the classic marketing book Positioning. The battle for your mind, for 43 years the central tenet of product development. His critical glance can stop major corporations in their tracks.

He sees four problems with the Watch (why do I always want to call it the iWatch? Perhaps because that's what it should have been called.) Firstly because it is an accessory, not an independent device.

It does not replace your phone - in fact you have to carry your iPhone in pocket for it to use its telephony features. Dick Tracy it ain't. Ries' advice is, "Instead of developing a new accessory to enhance the performance of the iPhone, develop a new brand for people who don't want to carry an iPhone."

Secondly they were not the first in the category - and not different enough to be able to create a whole new category for itself, the "smart watch". This would be the classic positioning move to make.

Thirdly, like me he's unhappy with the brand name, Apple watch. He sees it as a brand extension name that's likely to produce modest results. Like Heinz mustard, Campbell's tomato juice, or Red Bull cola. But perhaps there is some new advance yet to come from the secretive halls of Cupertino which will truly deserve a new name?

This brings us to the fourth problem. The range. Apple succeeded with one dazzling product at a time. Remember the excitement of that first iPod? The hysteria of the first iPhone in its sparkling ceramic whiteness? Or the blank simplicity of the iPad? "Less is more" Steve Jobs seemed to be saying.

But Tim Cook, the new God of Apple, thinks differently. The watch has 38 different models. Prices range from $499 in the Sports range, to $799 - $1679 for Apple Watch to over $14,000 in the Editions range. The likes of Beyoncé, Kanye West, and Karl Lagerfeld are seen prancing in the costly models.

All very well, you can pay a lot more for a fancy watch. But will a Rolex or a Patek Philippe become obsolete in five years or less? Remember the mumblings coming from behind the walls at Cupertino. Who knows what's next on the agenda?

Is the new Apple watch going to be the harbinger of a whole new category of smart watches - or is it an ominous harbinger of failure?

If Al Ries is not so sure, I'd be getting nervous: "No one knows whether the Apple watch will become another iPod, iPhone or iPad. But if history is any guide, the odds are not good." And he warns the still-huge, still-wealthy company: "Tim Cook is not following the game plan devised by Steve Jobs."

ray@ebeatty.com;