Monday, March 21, 2016

State of the Apple Watch - What Woz said

Apple enters "the jewellery [sic] market", but not with the approval of Woz

On this morning of another highly anticipated Apple announcement, speculation surrounds a new, smaller iPhone and a new iPad. And perhaps something having to do with the Apple Watch. For example, see "Apple to unveil iPhone SE, iPad Pro, new Apple Watch tomorrow" - where "new Watch" in the headline actually refers to "latest Apple Watch bands" in the text.

Creating value with watchbands just "does not compute" for Apple co-founder Steve Wozniak, who took on his disillusionment with the company's current approach in a Reddit Ask-me-anything last week. Woz covered lots of ground including the FBI/Apple encryption battle, but summaries (like the UK Wired story, displayed above) tended to focus on his criticism of the company for pursuing product differentiation via aesthetics.
I worry a little bit about - I mean I love my Apple Watch, but - it's taken us into a jewelry market where you're going to buy a watch between $500 or $1100 based on how important you think you are as a person. The only difference is the band in all those watches. Twenty watches from $500 to $1100. The band's the only difference? Well this isn't the company that Apple was originally, or the company that really changed the world a lot.
One can argue with his opinions, and even see him as too "old school" and not really understanding modern economics and marketing. But his thoughts took me back to what could be thought of as the very first "smartwatch", the HP-01, introduced in 1977, about the same time the two Steves were just getting Apple Computer off the ground. Hewlett Packard was still essentially an instrument-dominated company back then, with a leading position in high-end electronic calculators. Taking on the design and production of a "calculator in a wristwatch", as stated by founder Bill Hewlett "because he wanted one", at least as legend has it, met with enthusiastic efforts by the engineering teams, seeking to follow the company's driving culture of making "technology contributions".

When the product launch was in the works, marketing teams in the company recognized that while it was an easy product to explain, it was unique as compared to anything else HP sold. So it needed a sales channel, and the one that made sense consisted of fine jewelry stores. HP built a sales force to take the HP-01, priced at between $450 and $850, to this new-to-HP group of retailers. (The price ranged was based on appearance and the metallic finish used on the several models.)

The product did not succeed in the market, and was long gone before I joined the company in 1981. The folklore surrounding it had not disappeared, however, and the technological feats involving integration and miniaturization, as well as the marketing feats involved in opening a new sales channel.

All that glitters? This gold HP-01 (pictured in an HP Journal article) is clearly the $850 model
So having a great deal of cultural overlap with the original Apple and its co-founder, Steve Wozniak, my view is that the Apple Watch itself is a huge technology contribution already, with more and better anticipated for the future, if not today. As far as all the aesthetics and luxury-goods pricing, I get Woz's drift!

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