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Is Apple Planning The Smartest Move Into the Luxury Segment Of The Wearable’s Sector?

July 14, 2014 | About:
Eshna Basu

ICRAOnline

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Apple (AAPL) is all set to revolutionize its tech offerings by making a smart move into the niche product category of making intelligent watches that several of its loyal followers are still skeptical about. This smart timepiece, dubbed as the ‘iWatch’, could earmark Apple’s latest technological feat of devising a smartwatch instead of a smartphone having high-end features. Indeed, this strategic move comes after the management’s growing concern regarding slow iPhone and iPad sales growth in the U.S. market.

Also, this release could mark as its sole game-changing weapon following the heels of Samsung (SSNLF), Sony Corp. (SNE), Motorola and LG Electronics Inc. -- all of which have brought similar devices that tech-watchers felt did not induce any mass adoption wave. In such a pre-dominating scenario, what would be the future of Apple’s iWatch? What are the key attractive points that could add an ace up Apple’s sleeve amidst fierce competition? Let’s dig deeper to get to the ultimate crux.


The Apple iWatch concept, Source: Flickr.

The Manufacturing Highlights
Certain reliable sources have discussed on Apple’s collaboration with Taiwan’s Quanta Computer Inc. for mass production of its first smartwatch which will hopefully start production by this month and be commercially released by early October this year.

This production move serves as a boost to Quanta, as its chief focus has been primarily on manufacturing iPods and laptops for Apple till now -- both product lines currently experiencing a downward trajectory. Apple expects to ship nearly 50 million units within the first year of its release, though such initial estimates could be subject to later modifications. On similar lines, Quanta is accounting for completion of at least 70% of the final assembly of Apple’s iWatch which is presently under its trial production.

Exhibiting Superior Features to Existing Smartwatches
Right now, smartwatches are niche products having limited customer appeal. Apple can easily change that if it offers a device with features people did not even know they want. Apple recently recruited a “secret –development dream team” to guarantee its newest smart device was kept hidden from public as long as possible before the original release. The company has poached talent from various hi-tech companies to build its talent-pool for making this device.

The iWatch is expected to be sleeker than the boxy Samsung Galaxy Gear or Sony Smart Watch. As Apple has invested massively in bringing top executives onboard, this is indicative of the ultra-modern features possible in its iWatch that could create immense appeal among Apple fans.

This May, Apple acquired LuxVue, a power-efficient LED company aimed at improving the battery longevity of the iWatch when compared with its immediate peers. The company is targeting a battery life of four to five days, something which makes it a chief contender to Samsung Galaxy Gear which has pronounced battery flaws.


Source: Flickr.

Apple has also hired top designers from Nike’s (NKE) FuelBand division and other medical device companies, indicating that the watch could feature several biometric sensors. A recent report even claims that the iWatch could feature at least 10 different sensors for tracking health and fitness data, an exclusivity that differentiates it from Samsung or Sony’s smartwatches. The iWatch would be loaded with iOS8 and have an in-built Healthbook app for supporting powerful health-tracking features like tracking calories burnt and distance travelled, keeping a tally of weight loss/gain, measuring blood pressure, heart beat, and glucose levels. Also, the iWatch is slated to offer multiple screen sizes to its customers.

Such upgraded features speak highly of the words stated by CEO, Tim Cook, in the Wall Street Journal’s technology conference last year where he foretold the promise held in the wearable space for companies having compelling solutions. He further stated --“There are lot of problems to solve in this space. It’s ripe for exploration. I think there will be tons of companies playing in this space.”

Possible Sticker Price
Apple has forever aimed to be a market honcho in the high-end market. While Google (GOOG) intends to flood the market with cheap Android smartwatches, Apple hopes to cater to the affluent class interested in sleeker, pricier incredible features in its iWatch, which is yet to be launched.

Nevertheless, though the actual price details have not been released till date, experts are estimating it to be similar to Galaxy Gear 2 hovering around $300. Indeed both these companies would have an uphill battle soon after the launch.

Last Word
Despite clear strengths, Apple will surely face severe competition from cheaper device makers when it launches the iWatch. However, there is plenty of room for companies co-existing in this space as predicted by Research firm On World that forecasts smartwatch shipments to touch 330 million by 2018. This move of Apple might prove to be its smartest technological drive in this decade.


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