6 Core Beliefs Behind the New 'Apple Watch'

CUPERTINO, United States — For more than three years, Jonathan Ive, the mastermind design guru behind iconic Apple consumer electronics products, from the iMac to the iPod to the iPad, has secretly been working on a wearable technology device — the Apple Watch — together with a team of 17 designers at Apple's campus-like headquarters in California's Silicon Valley.

Given the notorious secrecy that surrounds Apple's new product launches and the company's track record of transforming entire product categories, members of both the fashion and tech tribes have been eagerly waiting to see what Ive and his colleagues — including former fashion executives like Paul Deneve — have developed; and to decode Apple's thinking behind what is its biggest new product launch since the game-changing iPad and the first for the company under the guidance of chief executive Tim Cook, who replaced Apple's visionary founder, Steve Jobs, after his death in 2011.

On Tuesday morning Pacific time, the Apple Watch was finally revealed in a live keynote presentation led by Cook and containing a video presentation by Ive. BoF goes inside the launch to explain the new wearable device and how Apple hopes to turn the product into another global blockbuster.

Keynote presentation unveiling the Apple Watch | Source: Apple.com

Interestingly, the Apple Watch is not a single monolithic device, but rather a set of modular options which offers consumers a greater degree of both aesthetic and functional personalisation than any Apple product in the past: two different screen sizes, several options for strap materials — including rubber, stainless steel and leather — and a range of six different metallic finishes, crafted from custom alloys, for the core watch casing and face, which is made with sapphire crystal, the strongest transparent material after diamond.

These options are grouped into three different collections. While the Apple Watch Sport, will arrive in stores in early 2015 and sell for $349, more luxurious options are in the pipeline, including some available in 18-karat gold. Apple Watch Edition, the most expensive collection, could sell for thousands of dollars, though Apple has not yet revealed its price or delivery date.

So why all the fuss about a new watch anyway?

While still in its infancy, the wearable technology market is widely thought to be the next major technology battleground and is expected to ramp up rapidly. ABI Research estimates that around 7 million smartwatches (only one type of wearable device) will ship by the end of 2014, up from 1 million in 2013. According to Forrester Research, Apple alone could sell 10 million units of its Watch next year. Others are even more bullish. Morgan Stanley estimates first-year sales in the range of 30 million to 60 million units. Meanwhile, the investment bank Cowen predicts the overall wearables market will reach $170 billion by 2020.

Given these numbers and the fact that, when it comes to wearables, consumer adoption will largely depend on the stylistic merits of these devices, it’s no wonder that the fashion industry has finally taken notice.

This fashion week is shaping up to be "the season of wearables." In the last few weeks alone, Opening Ceremony has unveiled a luxury smart bracelet dubbed 'MICA' (My Intelligent Communication Accessory) developed in partnership with Intel; Tory Burch has launched a collaboration with FitBit; Intel has announced a second consumer brand partnership, this time with watch juggernaut Fossil; and, today, Samsung's Gear S smartwatch made an appearance on the Diesel Black Gold runway.

If many of these collaborations seem to reflect superficial and short-term thinking, Ive and his team, on the other hand, think of Apple as an ideas company based on a foundational set of beliefs put in place by Steve Jobs, who had a knack for transforming emerging consumer electronics categories. Here are the six underlying beliefs behind the new Apple Watch, which form the foundations of the company’s strategy for igniting and dominating the rapidly emerging wearable technology market, just as the iPod did for music, the iPhone did for smartphones and the iPad has done for tablets.

1. PERSONALISATION IS CRITICAL

With the Watch, Apple is launching a personal fashion accessory that people will actually wear on their bodies. Far more than a phone or a tablet, a personal accessory is, well, personal. Hence, Apple has designed its Watch to reflect a wide variety of individual user needs, profiles and preferences, both in terms of aesthetics and functionality.

The Apple Watch is actually more like a framework or series of products than a single product. Whereas, previously, Apple’s new product launches have centred around single monolithic models (some of which were later extended, as in the case of the iPad Mini or iPhone 5C), the Apple Watch debuts with a dizzying range of aesthetic and functional options, resulting in millions of possible permutations. There are three different Watch collections, set to be released over time: Apple Watch Sport (entry level with rubberised bands), Apple Watch (a version with higher-end finishes and options) and Apple Watch Edition (the highest-end line, which comes with 18-karat gold casings, as well as leather packaging and charging units). Of course, there are also the two different screen sizes (38mm and 42mm), thousands of customisable homescreens (from a Yosemite timelapse to the classic Mickey Mouse watch) and several options for straps, in a wide range of colours and materials, including rubber, stainless steel and leather.

2. THE ‘CROWN’ IS THE NEW MOUSE

When Apple introduced the Mac in 1984, it also introduced a consumer-friendly version of a revolutionary new way of navigating a computer screen, something that we all now take for granted: the graphical user interface (GUI) and mouse. Similarly, when Apple entered the crowded (and largely unsuccessful) market for MP3 players, it introduced the idea of an intuitive trackwheel to scroll through albums and songs. For the iPhone and the iPad, there was multi-touch. But, on the small face of a watch screen, multi-touch wasn’t a viable option. So, Ive and his team went back to traditional watch designs, reimagining the winder as the Apple Watch’s primary form of navigation. By clicking and turning the ‘crown,’ users can magnify, zoom and shuffle between various options. Not only is this a smart way of solving a specific technical challenge, but it’s also an elegant nod to classic watch design.

3. IT’S ABOUT HEALTH, HOME & MOBILE PAYMENTS

Health, home and mobile payments form the key pillars of the new device. Healthcare is a massive industry. And healthy living is powerful and fast-growing lifestyle trend. With the debut of Watch, Apple is making a major move into the health-monitoring space pioneered by devices like Jawbone Up, Nike Fuelband and Fitbit. But like the myriad MP3 players that came before the iPod, many of these devices are now gathering dust in sock drawers. Apple’s device aims to change this. It features two circular sensors and two circular emitters on the back of the watchcasing, entirely visible to the user, which, along with the accelerometer, GPS and Wi-Fi functionality of a companion iPhone, can provide and let you share (with a doctor or personal trainer, for example) an intelligent picture of your daily activity. And with Apple’s HealthKit, a toolkit that allows software developers access to activity data, the potential for new medical applications is immense. If there was a thirty percent chance you could live longer by using health apps on an Apple Watch, would you think about using it?

Apple is also betting that Watch will become a remote control for the growing range of Internet-enabled devices — the so-called ‘Internet of Things’ — in the home and beyond. Apple’s HomeKit is a developer toolkit that could let third-parties create apps for controlling things like thermostats, garage doors and video entryphones.

Critically, the new Apple Watch will also incorporate near-field communication (or NFC, the technology used in London Transport’s Oyster cards or contactless bank cards, for example) to enable easy mobile payment. With Apple Pay, which also launched today, Apple's stated vision is to replace the wallet. Indeed, with hundreds of millions of credit cards already on file, Apple could well become the definitive mobile payment system.

4. LEVERAGE APP ECOSYSTEMS

Apple Watch will ship with two built-in health apps: the Activity app, which monitors calories burned, daily activity and sitting patterns and the Workout app, which is geared towards more measuring more robust exercise. But much like the iPhone and iPad, the ultimate success or failure of Watch will be determined by the millions of apps built on top of the platform by third-party software developers and other ecosystem partners, from health care companies to home appliance makers. In this sense, the future functionality of Watch remains to be written.

5. EMBRACE MULTI-TIERED PRICING AND CUSTOMER SEGMENTATION

Pricing has been the source of much speculation about the Apple Watch. While full details have not been released, it seems Apple will take two different approaches to pricing, each at different ends of the spectrum.

At the entry-level, we know that Apple Sport, to be released in Spring 2015, will cost $349, well above the cost of the devices marketed by players like Fitbit (around $100) and Jawbone (around $150). This is consistent with the approach Apple has taken in other categories and consumers have clearly shown their willingness to pay a premium for the company’s superior design and user-experience.

As for the higher-end Apple Watch Edition — designed to go toe-to-toe with entry-level luxury watches, prized for their brand heritage and craftsmanship — a price has yet to be set. But one gets the sense that Apple will take a value-driven approach to this space, making Watch a no-brainer complement to an existing watch (or collection of watches). I’m betting on a price point north of $1000 for the highest end Apple Watches in 18-karat rose and yellow gold.

6. A NEW PRODUCT CATEGORY REQUIRES NEW SELLING SPACES

The entry-level Apple Watch Sport will be sold online and in existing Apple Stores around the world. But can Apple really expect to sell a luxury-priced Apple Watch Edition in crowded stores staffed by personnel in blue t-shirts and khakis?

This year, Apple hired Angela Ahrendts, former chief executive of Burberry, to lead the company's retail division and it will be very interesting to watch how Apple's retail model begins to shift to adapt to a wider assortment of products, with varying needs in terms of sales support and customer interaction.

A complex and multi-layered product like the Apple Watch will require more sales training in order that sales associates can inform customers of their various options, and help them make the best decisions based on their own needs.

Don’t be surprised if the company rolls out a unique selling environment that lives up to the Apple Watch Edition product — maybe a luxury Apple Watch shop-in-shop or standalone unique high-end tailored to support the new product.

IMPACT ON TRADITIONAL FASHION & LUXURY BRANDS

So what impact will Apple Watch have on traditional luxury timepiece and fashion accessories players?

Having seen and touched Apple Watch in person, I think traditional Swiss luxury watchmakers can rest easy — for now. While the design of Watch is leagues ahead of every other wearable tech gadget on the market — and there are features which make it very luxurious indeed — the Apple Watch face itself is heavier and clunkier than one might expect. So, the device may, at first, be more of a complement to traditional luxury timepieces, which are not only beautifully crafted, but carry and convey the symbolic value of their brand heritage.

Apple Watch is likely to be worn as a daytime device, or a device worn when engaging in sports, while classic timepieces are still worn on more formal occasions. A smartwatch like this also requires charging (yes, there is another Apple charger to contend with) and so the watch can’t practically be worn at all times like a classic watch, which doesn’t need charging.

That said, this is just the beginning for the Apple Watch and like its iPod, iPhone and iPad predecessors, I’d expect the product to evolve significantly over time. While Apple may never beat out traditional watchmakers on aesthetics alone, if, one day, the functional value of wearing Watch becomes so appealing (and addictive) to consumers, it could well win the war for limited wrist real estate.

For vast swathes of young people under the age of thirty, Apple’s challenge is different. Today, this demographic rarely wears watches at all. Their first instinct is to look at their mobile phones to check the time (and accomplish other tasks). Apple will need to convince young users that there is value in wearing something on their wrists in the first place. Apple is hoping that by positioning their new smartwatch as a companion device to the iPhone, enabling users can scan emails, answer phone calls and check their calendars without having to fish out their mobiles, the Watch will naturally mesh into young people’s lives.

What's more, just as the iPod, iPhone and iPad created a whole new leather goods category dedicated to carrying tech accessories, I would also expect a similar mini-industry to sprout up around the new Apple Watch. Might traditional luxury brands like Hermès, Gucci or Louis Vuitton create their own straps or accessories for Watch?

Watch this space. Apple has just completely changed the game.

Imran Amed travelled to San Francisco as a guest of Apple.