The Apple Watch will flop. Here’s why
NEW YORK (CNNMoney) — The Apple Watch is going to be a flop. Well, in Apple terms anyway.
Millions of people will buy Apple Watches, because Apple’s enormous, core base of fans will line up for just about anything. At $349 per watch, Apple has to sell “just” 3 million Apple Watches to make it a meaningful product to its balance sheet — $1 billion in sales.
But that’s not the point. Nearly 70% of Apple’s revenue comes from the iPhone, iPad sales are slumping, and Apple needs a new product to reduce its reliance on one core product.
It won’t find that with the Apple Watch.
Apple itself is trying to reduce investors’ expectations for the watch, relegating it to the “other” section of its report, which includes iPods and Apple TVs. So unless sales are through the roof, don’t expect Apple to give away too much about how many watches it has sold.
Here’s why Apple knows the Apple Watch won’t be an instant hit:
It costs $350. That’s a lot of money to fork over for a device that adds a slight bit of convenience. It doesn’t do anything more than your iPhone does — it just allows you to do some iPhone functions on your wrist.
Wearable devices haven’t taken off for that reason: The functionality doesn’t justify their price.
As serial tech investor Fred Wilson predicted earlier this year, “Another market where the reality will not live up to the hype is wearables. Not everyone will want to wear a computer on their wrist.”
That’s why Wilson said the Apple Watch won’t be a “home-run product that iPod, iPhone, and iPad have been.”
Battery life is going to be awful. If the rumors of 10-hour battery life hold true, that’s truly dreadful. That’ll barely get most people through their work day and commute.
The Apple Watch does so much and it’s so small that there’s probably not much that Apple can do to improve the battery. That’s why non-Apple smartwatch makers have decided to give their watches a couple core functions and relegate the rest to the smartphone.
Rival smartwatches might not be as compelling as the Apple Watch, but the battery life at least gets them through a day.
Not everyone thinks it’s as beautiful as Tim Cook does. When he unveiled the Apple Watch last fall, Tim Cook fawned over the beautiful design elements of the Apple Watch.
But there are actually better-looking smartwatches on the market, including the gorgeous Moto 360, which actually looks like a watch. There’s no mistaking the Apple Watch — it’s boxy, fat and, compared to Apple’s other products, it’s ugly.
What’s compelling about it? Do you need to send drawings to your friends to communicate that you want to get a cup of coffee? Do you really want to zoom in and out with a dial to see text on a tiny screen when you have a 5-inch screen in your pocket? Do you need to know your heartbeat while sitting at your desk?
That’s a personal preference, but most people will undoubtedly say, “No way.”
Version 2.0 will be better. Spending $200 on the iPhone is a two-year investment. You know you’re getting something that will be replaced in a couple years, and your carrier will subsidize the cost for you.
With the Apple Watch, you’re spending $350, and you’re stuck with it. Next year, when Apple designs an Apple Watch that does your laundry and your dishes, you’ll need to fork over another $350 or stick with what you’ve got.
More than a few people are going to hold out to see what Apple Watch releases next year.