Will A Watch Help Spawn New Start-ups?

During the unveiling of the much anticipated iPhone 6 and iPhone 6 plus, very few people knew about the unveiling of Apple's Watch. For simplicity and due to many Apple products, lets put an "i" in front of "Watch." Apple's iWatch is soon to be released sometime early this year. Already, some people are speculating that it will be a flop or that it won't sell as well as it was once thought when unveiled. However, others are convinced that it will sell and that it could be the next form of billion-dollar start-ups. Morgan Stanley is also quite optimistic as well:

Contrast that with the predictions of many pundits that the watch will flop, or sell only modestly. Others, like the analysts behind a Morgan Stanley note from November, are so optimistic they project the watch will sell 30 million units in its first year, increasing Apple's value by more than 10% and adding more than $50 billion to its market cap.

Furthermore, Apple has already released the "software development-kit" to several companies back in November of 2014. Of course, those companies were picked by Apple, with Facebook and Twitter having to be the most obvious ones. However, based off of what was unveiled and displaying what the watch can do, it is the apps that remain to be seen and how companies will develop these apps. Its possible to see new apps being developed and possibly becoming a billion dollar business.

In my opinion, I think that this will be interesting to see how things pan out. I find it hard to determine whether if this watch will be a flop or not. I base this off of two different perspectives. The first that it could be a flop because, people may not be ready for an interactive watch as this. We already interact with our phones since they are miniature computers that can do everything that we need to do to communicate. So what is the point of having a watch that can do as much? This would make the application development a waste of money. The other perspective is that the watch will do well since that it is a new technology that could be the next step to communicate like James Bond (who wouldn't want to talk into their watches like Mr. Bond?). Additionally, developing new applications for a watch could have limitless abilities by possibly helping you find the item that your looking for at a store; think of it as a homing device.

Fellow monkeys, what do you think about this "iWatch?" Do you think that it will be a flop or a gold mine for app developers to become a billion dollar business? What about the apps themselves, do you think they will be useful or not? What about the optimism from Morgan Stanley? Seems that they would recommend this as a buy due to the added valuation of the product. Or are they too excited?

Quote is from Monday, January 12th, 2015 WSJ article under "MARKETPLACE" section.

Comments (19)

Jan 15, 2015 - 1:21am
Punchey, what's your opinion? Comment below:

Looking at your last paragraph, I think you summed up the "smart watch" idea. The first group of people who think it will be a flop don't think its pragmatic, particularly given the overlap with existing Apple products. The second group thinks its cool, plain and simple. It is a matter of how well they can market to this second group of people (not to mention the lack of smart watch sales by other companies is in indicator people are not in it for its current applicability).

I don't see the practical reasons for them to exist and I think they look ridiculous, but I also believe it will be a runaway success due to Apple's marketing prowess.

Jan 15, 2015 - 2:42am
Red3, what's your opinion? Comment below:
Punchey:

The first group of people who think it will be a flop don't think its pragmatic, particularly given the overlap with existing Apple products.

I'm part of the first group. If we look at the mobile technology platform we already have the phone, tablet, and laptop, all of which replace the stationary desktop PC. Their functionality is primarily based on being able to surf the web.

Smart phones substitute laptops while tablets fall between the phone and laptop. How exactly will the iWatch fit into this ecosystem? Can it replace the iPhone? If all the iWatch can do is show notifications like email and text messages without the ability to respond, it's fairly useless. iWatch = 21st century pager

>Incoming Ash Ketchum, Pokemon Master >Literally a problem, solve for both X and Y, please and thank you. >Hugh Myron: "Are there any guides on here for getting a top girlfriend? Think banker/lawyer/doctor. I really don't want to go mid-tier"
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Jan 15, 2015 - 2:04am
N0DuckingWay, what's your opinion? Comment below:

I think it'll be regardless. However, I think that this will be more notable in the short term as a bellwether for the smart watch industry. If Apple can't make it work, nobody can, and vice-versa.

"There's nothing you can do if you're too scared to try." - Nickel Creek
Best Response
Jan 15, 2015 - 8:19am
DickFuld, what's your opinion? Comment below:

I'll buy one and let you know what I think. The thing that Apple is doing that is very smart is the large array of straps that you can get. Most people won't want to have a watch that is the exact same as everyone else's. Not to mention the fact, that despite what the WSO consensus is, the average person doesn't give much of a shit about having an expensive mechanical watch as a status symbol....this thing probably will be a status symbol for plebes. For other basic electronic watches that cost $50 - 200, the iWatch will be a good alternative.

My guess is that there will be features that will seem necessary to many people a few years down the road. Things like heart and step monitoring are obvious, but I'm pretty confident there will be many more. Battery life is likely to be the biggest deterrent initially.

The future is almost always better.

Jan 15, 2015 - 9:41am
Addinator, what's your opinion? Comment below:

Probably the same deal as their other products, restricted supply up front which generates a buzz and sells huge numbers. It will be a hit, regardless of whether there are usable features or not. People will get one just to say they got one. It's a faux status symbol, which as Fuld pointed out, matters. Same as when people with Iphones look down on those with anything else.

I think you got to the more important point, however, when you mentioned software developers. Let's not kid ourselves, what will make or break this is whether third party developers can come up with creative uses for the hardware supplied. Developers, and apps, are what matters to Apple products. They buy the land, build a gorgeous building on the outside, put in the plumbing and then let the other guys come in and build out the inside.

Jan 15, 2015 - 9:50am
Going Concern, what's your opinion? Comment below:

The watch is pretty idiotic imo. Why would you need an iWatch with a tiny ass screen if you have an iPhone, doesn't make much sense...unless of course the three nanosecond difference between glancing at your wrist and glancing at your phone screen is crucial. The only reason people will buy it is because they want to seem hip, which will then become self-fulfilling.

Jan 15, 2015 - 9:57am
NESCAC, what's your opinion? Comment below:
Going Concern:

The watch is pretty idiotic imo. Why would you need an iWatch if you have an iPhone, doesn't make much sense...unless of course the three nanosecond difference between glancing at your wrist and glancing at your phone screen is crucial

This. My thing is that all of their devices literally do more or less the same thing. A phone can do more than a watch, and is just as convenient. While not everyone has an iPhone, I don't think Android/other smartphone users will buy an iWatch for what it can do or even for the faux status symbol. A lot of those people don't like Apple on principle so it's unlikely they switch camps. But at the end of the day it ultimately boils down to what it can do, how third party developers can take advantage. Maybe the watch is waterproof and you can take selfies while you're scuba diving and then instagram them or some shit...I don;t know..but you get the idea.

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Jan 15, 2015 - 10:42am
Punchey, what's your opinion? Comment below:

I think everyone is in consensus that the watch will sell, so to answer the question by OP: yes, I am sure several start-ups will be targetting the iWatch and some will make money hand over fist (but most will fail).

From an app developer's perspective, I see this as a phenominal opportunity as there are certainly different types of watches warranted by a differently used / worn piece of equipment. No one is going to being playing Candy Crush on their watch, and with the apps that I have on my iPhone I see that they would have very little use on my wrist. Existing apps won't make any more money but this effectively brings a new market in the app space which, provided there are good ideas, I am sure will do just fine.

Jan 15, 2015 - 5:11pm
Mr.BananaB, what's your opinion? Comment below:

As I got back from work, I turned on the "Closing Bell" on CNBC and they were talking about the watch and what it may bring. I was only able to catch a few thoughts, but from what I understood, its a split still. As for myself, I am leaning a little more towards that the watch will be a success and be a success for software developers. As Fuld pointed out, the watch does open up for medical uses for heart rate monitoring. While the watch could be a success, it is another step forward in technology that can be used in another industry besides for personal use. That in of itself could allow software developers to create new ways of monitoring or find new uses for other industries. As for marketing, Apple knows what they are doing to make it a big hype. Sure, it is a easy marketing ploy, such as limit the amount of units made or purchases, but it has worked.

When life hands you lemons, make lemonade
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Jan 17, 2015 - 9:04am
AY01, what's your opinion? Comment below:

I recommend buy. Apple is by far the best electronic consumer brand because they understand the customers to a deeper degree vs. other companies. This is the true hedge of Apple in the market. The iWatch will be a slow but very steady scalable market player. The wearable technology market is still in its growing infancy even with the iWatch but developers have already been developing the apps as you pointed out since the November timeframe. This is a new VC market but the best comparable is health wearables and those are rapidly taking off. No matter what financial factors we look at you always have to remember that Apple simply does not enter into a product line without a very fundamental and deep understanding of the market. It enters to win and creates an entire ecosystem built with a core unit in mind that allow it's other revenue generating platforms to succeed. One of the problems with the iWatch is that the pricing is a little stand offish to a group of consumers. It is not like the current pricing models of the iPhone or the iPad so just like the first iPhone only those that can afford it will buy it. With all of this said the nest that the iWatch builds will allow growth of wearable technology.

Si Vis Pacem Para Bellum
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Jan 21, 2015 - 11:52pm
Mr.BananaB, what's your opinion? Comment below:

In regards to the ecosystem, Apple also has what is called iBeacon. This will allow the watch to pinpoint where you are at in the store within centimeters, providing that the store is appropriately equipped. InMarket, which already as 32 million subscribers, has been able to market the iBeacon technology into stores. Originally, InMarket was used as a form of reward programs. However, with this technology, InMarket has the technology to do "store-mapping" which will pinpoint you in the store. Additionally, the store can also pinpoint your whereabouts in the store as well. This would be useful for companies to gain data on what are the most highest trafficked area. Basically use it for sale promotions and new products.

When life hands you lemons, make lemonade
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Jan 22, 2015 - 12:21am
AY01, what's your opinion? Comment below:

The motherload has been tapped! It's truly a marketeers data dream. Are you insightful as to what software Apple is using to connect all of those data points? In a way it is scary to think that end users will provide so much data easily but it is the natural path.

Si Vis Pacem Para Bellum
Jan 18, 2015 - 5:53am
JohnBrohan, what's your opinion? Comment below:

its gonna flop. Nearly all the other "smartwatches" have fell on deaf ears in the last 2 years. This isn't like with the iPhone, where other smartphones (Blackberry, Palm, Samsung BlackJack, or those Nokia ones) were pretty popular in the mid 2000s, and Apple had something they knew they could replace. Quite frankly, this smartwatch business is them caving to Wall Street analysts and talking heads who needed something to rave about.

Jan 18, 2015 - 7:44am
DickFuld, what's your opinion? Comment below:
JohnBrohan:

its gonna flop. Nearly all the other "smartwatches" have fell on deaf ears in the last 2 years. This isn't like with the iPhone, where other smartphones (Blackberry, Palm, Samsung BlackJack, or those Nokia ones) were pretty popular in the mid 2000s, and Apple had something they knew they could replace. Quite frankly, this smartwatch business is them caving to Wall Street analysts and talking heads who needed something to rave about.

This could be more like the original iPod. MP3 players were not very popular until the iPod came out, which was an incredible success. That being said, there is a zero percent chance that the iWatch will have anywhere near the impact for Apple that the iPod did. That was the beginning of the beginning of the resurgence of Apple.
Jan 22, 2015 - 12:53am
Blank999, what's your opinion? Comment below:

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