This Sep., Apple Event does not just double down with Apple Watch SE 2nd gen., but also triple down with Apple Watch Ultra. How is Apple reinventing “the watch” for a better future? Then, what is the next big thing for smartwatch?
To complete you
For now, It’s not about if smartwatches will replace smartphones. Rather, it’s about when smartwatches are the better device than smartphones for the moment. Smartphones have replaced many devices in our life, e.g. cameras, music & video players, etc, including watches. While most legacy devices are gone for good, watches have been making a successful comeback in a “smarter” way, e.g. Apple Watch in 2015. Since 2017, the renaissance became clear because there are a few key moments in daily life, smartwatch users may get by without their smartphones. Also for the first time, Apple shipped more watches than the whole Swiss watch industry in Q4. Sure, there will always be niches for classical watches. But, the smartwatch is obversely the mainstream. Soon, the smartwatch will be “the watch” when people refer to it.
To complete others better
The net sales of Wearables, Home & Accessories is $8B according to Apple FY22 Q3 report. Even though it’s still far behind iPhone’s $40B, it’s bigger than Mac or iPad as each is about $7B. Apple shipped 8+M watches with a 26% market share in Q2 2022. To grab more land, Apple not only to double down but also to triple down this year.
1. Apple Watch SE
Starting from $249, the 2nd gen. of SE will get more users into Apple’s walled garden. The Family Setup lets family members stay in touch with Apple Watches even without their own iPhones. This is especially appealing to parents to connect with their young kids. Also, if you won’t “buy your mom an iPhone”, you can at least buy an Apple Watch SE 😉.
2. Apple Watch Ultra
The Ultra will increase the margin by capturing the upsell opportunity & eating into the athletic niche that Garmin & etc. used to dominate. The trend of their market share declining will continue. A strategic pivoting has been already overdue, and it’ll only get worse from now on. Furthermore, the Ultra will go with users to the places smartphones can not, and increase user moments with Apple. Which opens doors for new computation & connection services.
Digital disruption of healthcare
Apple has become “a service company” too. In Q2, Apple services net sales is almost $20B, or 24% of the revenue. Apple services may start to sell more devices & retain users. But, they have grown into super lucrative businesses. Apple is replicating the same magic with Apple Watch.
Fitness+ may be interesting, but Health has a huge potential. In short, Apple is becoming the superpower of personal health & safety monitoring in real-time & all the time. Besides keeping eyes on your heart, blood oxygen level, cardio fitness & fall incidents, new Apple Watch 8 can also take your temperature & call for help at a crash. Such mass dataset is “the new oil” of personal healthcare can drive a new wave of innovations & applications. While Apple keeps growing and expanding, any competitor is already a few years behind.
Full Disclosure
The opinions stated here are my own, not those of my company. They are mostly extrapolations from public information. I don’t have insider knowledge of those companies, nor a whatever expert. Up to you to take it with a grain of salt or two 😉.
