Is Apple Watch a game changer?

Global Business

Apple Watch FILE – In this Sept. 9, 2014 file photo, the new Apple Watch is modeled during a media event in Cupertino, Calif. Apple CEO Tim Cook has hinted the wearable gadget will be as game-changing as Apple’s revolutionary iPhones and iPads, which have become indispensable accessories for millions around the globe. (AP Photo/Marcio Jose Sanchez, File)

No one can argue that Apple has changed the way people live their lives. The company’s iPod, iTunes, iPhone and iPad have shaken up music, phone and computer markets worldwide. Is the Apple Watch going to be able to do the same?

Mark Niu filed this report from San Francisco.

Is Apple Watch a game changer?: the debut.

Is Apple Watch a game changer?: the debut.

No one can argue that Apple has changed the way people live their lives. The company's iPod, iTunes, iPhone and iPad have shaken up music, phone and computer markets worldwide. Is the Apple Watch going to be able to do the same? Mark Niu filed this report from San Francisco.

Apple CEO Tim Cook announced the new Apple watch at an event in San Francisco.

Highlights:

  • On an average day, the battery is expected to last for 18 hours.
  • The entry-level aluminum model, called Sport, will be aimed at fitness enthusiasts. It will cost $349 for the smaller and $399 for the larger model. There will be choices of colors and bands.
  • The stainless steel edition will start at $549 and go up to $1,049 for the smaller model, depending on the selection of watch band. The larger model will range from $599 to $1,099.
  • The luxury model with 18-karat gold , which will be available in limited quantities at select retail stores, is priced at $10,000.
  • The watch is charged with a magnetic charger that clicks into place when it’s near the back of the watch.
  • The watch can be used for making hotel reservations at Starwood Hotels and unlock your room door.
  • You can also pay for your groceries using Apple Pay which has been integrated into the watch.
  • Other features include making and receiving calls, getting a boarding pass notification and calling Uber.

The stakes are big for Apple CEO Tim Cook: the watch is the first brand-new Apple product to be launched without legendary co-founder Steve Jobs. But the market is awash in smart watches that have gained little traction. Here are three reasons the Apple Watch will finally move the needle in the smartwatch industry — and three reasons it might not.


Max Wolff, ChIef Economist, Manhattan Venture Partners on the new Apple watch

CCTV America interviewed Chief Economist at Manhattan Venture Partners Max Wolff to talk more about the new Apple Watch and the future of the company.

Max Wolff, Chief Economist, Manhattan Venture Partners on the new Apple watch

Max Wolff, Chief Economist, Manhattan Venture Partners on the new Apple watch

CCTV America's Michelle Makori asked the Chief Economist at Manhattan Venture Partners Max Wolff some questions about the Apple watch.


WHY IT WILL CHANGE THE GAME

MORE FEATURES THAN RIVALS: Along with email, texts and phone calls, Apple says its watch will present news, health readings and other notifications in creative ways that can be read at a glance. It will have a heart rate monitor and accelerometer, and an internal motor that can signal the wearer with a subtle “tap” on the wrist. And Siri and Apple Pay will be built in. Apple is working with outside companies to create more apps; Cook has talked about using the watch as an electronic “key” for hotel doors or even cars.

A POWERFUL BRAND: The world’s biggest tech company has a reputation for quality and a direct conduit to customers — it operates more than 400 retail stores around the world. And it has deep pockets to spend on advertising — it is showcasing the watch this month with a sleek, 12-page insert in Vogue and other fashion magazines.

APPLE’S TRACK RECORD: This wouldn’t be the first Apple product that revolutionized a market where rivals had struggled to break through. Other companies made digital music players before the iPod, smartphones before the iPhone and even tablets before the iPad. Most of those products failed to catch on until Apple made devices so appealing they set new standards and created new demand, said Forrester Research analyst J.P. Gownder.

OR NOT

WHAT’S THE NEED?: Most smartwatches — including Apple’s — only work with a smartphone nearby, so you can’t swap one expensive gadget for the other. “What we’ve seen is that it’s not obvious why people would want a smartwatch,” says Gownder. A recent Forrester survey found some respondents didn’t see a reason to buy one because they already owned a less-expensive fitness band or a full-featured smartphone (although it also found Apple fans ready to buy the new watch).

CONSUMERS NOT EXCITED: You can already buy smartwatches made by giant tech companies like Samsung, Sony or LG, or from a tech startup like Pebble, that track your heart rate, show you email and deliver other online services to your wrist. None of them have really caught on. Only about 5 million smartwatches were sold worldwide last year, according to market researchers at Strategy Analytics. By comparison, Apple sold 74.6 million iPhones in just the last quarter.

PRICE AND OBSOLESCENCE: Many of today’s smartwatches sell for $200 or less. Apple plans to sell three models, starting at $349, but Piper Jaffray’s Gene Munster predicts the average buyer will pay $550 for a watch and extra, interchangeable bands. Apple’s high-fashion “Edition” model, made with 18-karat gold, is expected to cost thousands. While affluent consumers might pay that for a watch they can wear for years, or even hand down to their children, it’s a lot of money for something that could become outdated if Apple releases a new model every year or so — as it does with smartphones.

But even the iPhone didn’t become a mainstream blockbuster in its first year, notes Creative Strategies analyst Ben Bajarin. Of the Apple Watch, he says, “people need to understand more about what this product is, and what it does, and I think that will evolve over time.”

WHAT WILL IT DO?

— Show email, texts and phone calls, news, health readings and other notifications. They will be customized for the watch, so you won’t simply see what’s on the phone.

— An accelerometer will count steps you take, and an internal motor can signal you with a subtle “tap” on the wrist. There’s also a heart monitor; it’s not clear yet what heart rate readings you’ll get during exercise and rest.

— NFC wireless technology will to allow you to pay-with-a-tap through Apple Pay at participating retail stores and restaurants.

NOTE: Although some features may work without your smartphone nearby, you will need an iPhone 5 or later model in close proximity for full functionality.

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WHAT APPS ARE IN THE WORKS?

In September, Apple said several apps are in development. One would open your room at Starwood hotels. Another would help you find your BMW in a crowded parking lot.

It’s not yet known what apps will be rolled out with the April launch. But the success of Apple Watch could ride on what apps are in store to extend the watch’s functionality.

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HOW LONG DOES THE BATTERY LAST?

The watch likely will need to be recharged nightly, just like the phone.

Some fitness trackers can last for days without a recharge, but full-featured smartwatches typically last a day or two at most. What’s not known is how well Apple Watch will be able to last even a full day under heavy use.

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HOW MUCH WILL IT COST? WHEN CAN I BUY IT?

Apple has said the watch will start at $349 for the base model. There will be three different lines: aluminum for fitness enthusiasts, stainless steel for everyday wear and luxury 18-karat gold. Each line will come in two sizes and offer a variety of wristbands. The luxury edition might cost several thousand dollars, in line with other high-end jewelry. One question is whether Apple will let you keep the expensive casing and swap internal components as they are upgraded.

Apple will likely give a specific release date on Monday, along with a list of initial markets outside the U.S.

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THE DIAL

One thing that sets Apple Watch apart is the control you’ll get by turning the dial, known as the digital crown. Many rival smartwatches have buttons that do little more than turn on the screen and make menu selections. With Apple Watch, you’ll be able to turn the crown to zoom in and out. You can get a closer view of a map that way, for instance. You’ll probably still need to touch the screen to slide the map around.

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HOW WELL WILL IT SELL?

On the low end, Piper Jaffray’s Gene Munster estimates 8 million Apple Watches sold in the first nine months they are available. Forrester Research has predicted 10 million and Strategy Analytics is calling for 15 million.

By comparison, only 5 million smartwatches, from all makers, were sold last year, according to Strategy Analytics.

Apple sold about 5 million iPhones and almost 15 million iPads in their first nine months on the market.

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BEYOND THE WATCH

— There might be an update on Apple’s plans to replace iPhoto with a photo app similar to what’s found on iPhones and iPads.

— A new Apple TV streaming device? It’s been years since the last hardware update, though there’s speculation an announcement would instead involve Apple’s role in a stand-alone subscription service from HBO.

— Apple got a streaming music service when it bought Beats last year. When will Apple integrate that into iTunes?

— Might announce additional features or car models with Apple’s CarPlay, which lets drivers control iPhones with voice commands, a touch on the steering wheel or a swipe on a dashboard display.

— A larger-size iPad in the works?

Report complied with information from The Associated Press.