Has Apple just supercharged the smartwatch category? After months of anticipation, the tech company’s chief executive officer Tim Cook introduced the Apple Watch to the world Tuesday, along with two new iPhones, including the larger-screen iPhone 6 Plus, and a new Apple Pay payment system. Cook described the smartwatch, which will start at $349 and go on sale early next year, as the “most personal device we’ve ever created.” It’s an introduction with a good bit of fashion flair, one higher-end version features rose gold detailing, that marks Apple’s official arrival on the fashion scene.
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That makes for another extremely well-funded, design-savvy and logo-oriented competitor in the accessories space. The question is whether Apple’s marketing savvy and brand reputation will be enough to beat out more accessories-focused brands like Swatch group, which is due to unveil its own smartwatch next year, or even hip celebrities like Will.i.am, who is plotting his own smartwatch introduction for 2015. Wall Street certainly seemed to be taking a wait-and-see approach to Apple’s moves Tuesday. After shares initially soared 4.5 percent on the releases, they slid back to close down 0.4 percent at $97.99.
Alex Blanter, a partner in A.T. Kearney’s communications and media and technology practice, said the decline had “more to do with the huge build-up of expectations around the product’s release rather than the product itself. Remember, with previous releases by Apple, the stock has tended to rise until the day the product is announced, and has fallen on the day of the announcement. This release seems to be following a similar pattern.” “Apple’s entry into this space is good news — for now,” Blanter said. “If you look at the wearables market — specifically smartwatches — it’s been crowded but not penetrated. If you look at total number of smartwatches that have been sold versus iPhones or iPads, there are very few people who have them.”
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He pointed to Samsung, Motorola and Intel getting into the space — but even though Apple’s release of the Apple Watch had such high expectations, there isn’t yet a competitive thread to these devices because the market is so immature. And the Samsung Gear range has been seen as somewhat of a disappointment, failing to ignite the excitement that its smartphones have and that caused Apple to introduce a larger-screen version of the iPhone. Blanter argued that more players would lead to more innovation in the space. “Everybody is still trying to figure out how to make a smartwatch a truly must-have device, rather than an interesting and curious novelty,” he noted.
Motorola, for instance, revealed its first smartwatch last week, the $250 Moto 360, and it was touted as a modern timepiece where design came before the technology. Like Apple, Motorola took its time in entering the wearable category. “We realized that rather than designing the watch around existing technology, we should really take a step back and breathe and figure out what design we think it should be,” Motorola design director Dickon Isaacs told WWD last week.
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Or as Will.i.am told WWD last month on the launch of his eyeglass line ill.i Optics in talking about the wearables category, “When you have things you put on your body that have tech in them, you need to design them the way you would design things that didn’t have technology in them. That’s why we’re starting with the aesthetics, like the glasses. Then we will put the tech in it, but all the while, let’s start building the tech. You have to work in two silos: tech and fashion. All the while you know they are going to marry.”
Apple Launch Smartwatch by womenzmag