AAPL - Apple Inc.

[SmallCap]

Just thinking about the Apple watch.

 

My first thought when looking at it is that while I think apple as they often do has done a better job then anyone else in this space, that I still wouldn't be likely to buy one or to wear one.

 

I should mention that I don't currently wear a watch and don't really want to go back, but then again I didn't want to carry a computer around with me everywhere but the smart phone made it so compelling that I now do just that.

 

but while we will see just how useful this device is and I expect that usefullness to grow I see two significant problems.

 

1. Battery life and charging.

O, great, now i have another charging cable to keep track of and take with me, please end this madness.

Apple hasn't released any data on the battery life, people suspect that it won't go more then one day on a charge and others suspect that with usage it won't even last a day. Try having to charge your watch twice a day.  Also as Apple typically does they don't allow you to open the back to replace your battery, which should be fine because we all know that battery life never degrades over time (the internet really needs a sarcasm font)

 

2. using this watch outside in the sunlight.

If they have fixed the sunlight/screen issue then this alone is an incredible breakthrough, my guess is not. So the one place that I am most likely to want to use this device (outside) is the place where I still can't see the screen.

[ni-co]

I think Ben Thompson has it exactly right – there is a problem with the whole Smart Watch product category that Apple hasn't solved, yet:

 

Now it’s very fair to note that the biggest difference between the introduction of the iPod, iPhone and iPad as compared to the Apple Watch is that Steve Jobs is no longer with us. Perhaps the long introduction was simply his personal style. But the problem is that the Smart Watch needs that explanation: what exactly is the point?

 

To be clear, the hardware looks amazing, and I love the Digital Crown. It’s one of those innovations that seems so blindingly obvious in retrospect, and Cook was spot on when he noted that you can’t just shrink a smartphone UI to the wrist. But that was exactly the problem with too many of the software demos: there were multiple examples of activities that simply make no sense on the wrist.

 

http://stratechery.com/2014/apple-watch-asking-saying/

[Liberty]

http://ben-evans.com/benedictevans/2014/9/10/iphone6

 

How much of an impact will these new iPhones have on that segment? There are a bunch of reasons why someone would buy a high-end Android rather than an iPhone:

 

1. Their operator subsidies an Android but not an iPhone - this has now ended, with Apple adding distribution with all the last significant hold-outs (Sprint, DoCoMo, China Mobile)

2. They don't particularly care what phone they get and the salesman was on more commission to sell Androids or, more probably, Samsungs that day (and iPhones the next, of course)

3. They have a dislike of Apple per se - this is hard to quantify but probably pretty small, and balanced by people with a dislike of Google

4. They are heavily bought into the Google ecosystem

5. They like the customizations that are possible with Android and that have not been possible with iOS until (to a much increased extent) iOS8 (more broadly, once could characterize this as 'personal taste')

6. They want a larger screen.

 

Splitting these out, the first has largely gone, the second is of little value to an ecosystem player and nets out at zero (i.e. Apple gains as many indifferent users as it loses) and the third is small. Apple has now addressed the fifth and sixth, and the massive increase in third-party attach points means that Google's ecosystem (and Facebook's incidentally) can now push deep into iOS - if Google chooses to do so.

 

That is, with the iPhone 6 and iOS8, Apple has done its best to close off all the reasons to buy high-end Android beyond simple personal preference. You can get a bigger screen, you can change the keyboard, you can put widgets on the notification panel (if you insist) and so on. Pretty much all the external reasons to choose Android are addressed - what remains is personal taste.

[roundball100]

I think Ben Thompson has it exactly right – there is a problem with the whole Smart Watch product category that Apple hasn't solved, yet:

 

Now it’s very fair to note that the biggest difference between the introduction of the iPod, iPhone and iPad as compared to the Apple Watch is that Steve Jobs is no longer with us. Perhaps the long introduction was simply his personal style. But the problem is that the Smart Watch needs that explanation: what exactly is the point?

 

To be clear, the hardware looks amazing, and I love the Digital Crown. It’s one of those innovations that seems so blindingly obvious in retrospect, and Cook was spot on when he noted that you can’t just shrink a smartphone UI to the wrist. But that was exactly the problem with too many of the software demos: there were multiple examples of activities that simply make no sense on the wrist.

 

http://stratechery.com/2014/apple-watch-asking-saying/

 

I happen to wear a (dumb) watch.  People around me who have chosen to NOT wear a watch are constantly asking me the time.  People who have a smartphone dig into their pockets, check the time on their phone, and put it back in their pockets.  This seems somewhat inefficient.  People also take their smartphones out frequently to check for messages - is the watch more convenient for that?  This is aside from health/fitness related stuff.  Anyway, the future will answer these questions, but I'm not sure I'd totally dismiss the convenience/functionality of referring to something already on your wrist.  Of course if you're holding your Starbucks in the same hand, you don't want to turn your wrist too quickly ...

[rkbabang]

Anyone notice that Apple appears to have discontinued the iPod classic?  I guess it was inevitable, they haven't updated it in years.

 

RIP: The Apple iPod, 2001-2014

 

[Palantir]

Yep, it's not a product people update every two years....and it lasts forever unlike their iPad which seems to slow down. ;)

[Liberty]

Looks like demand is strong:

 

http://recode.net/2014/09/12/larger-iphone-6-plus-sells-out-amid-strong-demand-for-apples-latest-crop/

 

An Apple representative said that the overnight sales of the new iPhones set a record, though Apple did not say how many have been sold.

 

“Response to iPhone 6 and iPhone 6 Plus has been incredible with a record number of preorders overnight,” Apple told Re/code.

[ni-co]

I think Ben Thompson has it exactly right – there is a problem with the whole Smart Watch product category that Apple hasn't solved, yet:

 

Now it’s very fair to note that the biggest difference between the introduction of the iPod, iPhone and iPad as compared to the Apple Watch is that Steve Jobs is no longer with us. Perhaps the long introduction was simply his personal style. But the problem is that the Smart Watch needs that explanation: what exactly is the point?

 

To be clear, the hardware looks amazing, and I love the Digital Crown. It’s one of those innovations that seems so blindingly obvious in retrospect, and Cook was spot on when he noted that you can’t just shrink a smartphone UI to the wrist. But that was exactly the problem with too many of the software demos: there were multiple examples of activities that simply make no sense on the wrist.

 

http://stratechery.com/2014/apple-watch-asking-saying/

 

I happen to wear a (dumb) watch.  People around me who have chosen to NOT wear a watch are constantly asking me the time.  People who have a smartphone dig into their pockets, check the time on their phone, and put it back in their pockets.  This seems somewhat inefficient.  People also take their smartphones out frequently to check for messages - is the watch more convenient for that?  This is aside from health/fitness related stuff.  Anyway, the future will answer these questions, but I'm not sure I'd totally dismiss the convenience/functionality of referring to something already on your wrist.  Of course if you're holding your Starbucks in the same hand, you don't want to turn your wrist too quickly ...

 

I don't disagree. It's more about wanting the Watch to do too much. This watch is not about "saying 'no' to a thousand things" which is what Apple used to be great at under Jobs. Thompson's critique is brilliant IMO. He makes his point even better in this podcast episode: http://stratechery.com/2014/tim-cook-introduced-watch-exponent-episode-017-lets-end/

 

 

[Liberty]

https://www.apple.com/pr/library/2014/09/15Apple-Announces-Record-Pre-orders-for-iPhone-6-iPhone-6-Plus-Top-Four-Million-in-First-24-Hours.html

[TorontoRaptorsFan]

I ordered an iPhone 6 on Monday. My 4S is on it's last legs. The battery barely lasts.

The Tim Cook appearance on Charlie Rose was excellent. It's very reassuring to know Cook will be at the helm for many years to come.

[rkbabang]

"18-karat version of the Apple Watch could cost around $1,200"

http://techcrunch.com/2014/09/12/the-gold-apple-watch-could-cost-as-much-as-1200

 

[fareastwarriors]

US banks race to gain Apple Pay card advantage

 

 

 

http://www.cnbc.com/id/102004770?trknav=homestack:topnews:16

[Liberty]

Interesting post by Gruber on the Apple Watch:

 

http://daringfireball.net/2014/09/apple_watch

 

I wonder what the margins would be on a $5,000 gold watch? :)

[innerscorecard]

I think Gruber is roughly right on his price guesses for Apple Watch. I was most shocked during the keynote when Apple announced that Apple Watch would start at $349 - that seemed way too cheap.

 

But then I read comments on tech sites and on /r/apple, and I realized a lot of people were complaining that $349 was too expensive! I'm glad that these comments are usually a perfectly contrarian indicator.

 

One problem that Apple has had is that the products are too cheap, and the market can bear more. I like that while other vendors in Apple's market's are racing to the bottom, Apple has the pricing power to either maintain its prices or increase them.

 

 

[txlaw]

Ars Technica review of iOS 8:

 

http://arstechnica.com/apple/2014/09/ios-8-thoroughly-reviewed/

[GregS]

Brainstorming question for the group:

 

For Apple Pay, Apple has smartly decided to embrace credit card companies in its roll out.  This should help the program gain traction.  But if Apple Pay does gain widespread adoption, would Apple be able to move in and capture more of the profits in payments?

 

If Amazon could pull this off, this is exactly what they would attempt.  This may have been the point of the Fire Phone.  Amazon would undercut the margins and gain share.  I'm not sure if this is Apple's M.O., and my ignorance of payments prevents me for understanding whether and how they could do this.  Thoughts?

[KCLarkin]

I'm not sure if this is Apple's M.O., and my ignorance of payments prevents me for understanding whether and how they could do this.  Thoughts?

 

This is not Apple's M.O. and probably not in their best interest. From a Game Theory perspective, this is not the only game. They will need to partner with cable companies, content companies, etc in the future. If they gain a reputation for burning their partners, their ability to innovate in the future will be harmed.

 

This IS Amazon's M.O. and that is one of the big reasons why Amazon would have a very hard time creating a product like Apple Pay. Everyone can see what Amazon is doing to book publishers. Nobody wants to be the next victim.

[GregS]

This is not Apple's M.O. and probably not in their best interest. From a Game Theory perspective, this is not the only game. They will need to partner with cable companies, content companies, etc in the future. If they gain a reputation for burning their partners, their ability to innovate in the future will be harmed.

 

This IS Amazon's M.O. and that is one of the big reasons why Amazon would have a very hard time creating a product like Apple Pay. Everyone can see what Amazon is doing to book publishers. Nobody wants to be the next victim.

 

These are excellent points, thank you.

[dwy000]

For ApplePay, what's the view on the ability for a payment platform to take off when it's only accessible by like 30% of the public (less internationally)?  I would have thought that to get a retailer to pay a couple of hundred $'s for a new terminal, they would want to make sure it can be used by all customers.  It would seem that a PayPal or other hardware agnostic provider would have a huge advantage in rolling out a similar system because it can be used by everyone.

[rkbabang]

For ApplePay, what's the view on the ability for a payment platform to take off when it's only accessible by like 30% of the public (less internationally)?  I would have thought that to get a retailer to pay a couple of hundred $'s for a new terminal, they would want to make sure it can be used by all customers.  It would seem that a PayPal or other hardware agnostic provider would have a huge advantage in rolling out a similar system because it can be used by everyone.

 

See the discussion about American Express.  Why do merchants accept it even though the fees are higher?  Because the customers who use it are wealthy and spend more.  If you are a merchant you do not want to inconvenience iPhone owners.

[gfp]

I believe the NFC reader the retailer would buy works with other NFC platforms as well as ApplePay.  The retailer wouldn't be purchasing an ApplePay-only reader.

 

For ApplePay, what's the view on the ability for a payment platform to take off when it's only accessible by like 30% of the public (less internationally)?  I would have thought that to get a retailer to pay a couple of hundred $'s for a new terminal, they would want to make sure it can be used by all customers.  It would seem that a PayPal or other hardware agnostic provider would have a huge advantage in rolling out a similar system because it can be used by everyone.

[Liberty]

I'm writing this from my iPad Air  on iOS 8. Very nice so far!

[fareastwarriors]

Tim Cook Interview: The iPhone 6, the Apple Watch, and Remaking a Company's Culture

 

 

 

http://www.businessweek.com/articles/2014-09-17/tim-cook-interview-the-iphone-6-the-apple-watch-and-being-nice

[Liberty]

Tim Cook Interview: The iPhone 6, the Apple Watch, and Remaking a Company's Culture

 

 

 

http://www.businessweek.com/articles/2014-09-17/tim-cook-interview-the-iphone-6-the-apple-watch-and-being-nice

 

Off-topic, but has BusinessWeek fired its entire graphic design team? What's up with this?  ???

 

http://images.bwbx.io/cms/2014-09-17/timcook_315x420.gif

[KCLarkin]

For ApplePay, what's the view on the ability for a payment platform to take off when it's only accessible by like 30% of the public (less internationally)?  I would have thought that to get a retailer to pay a couple of hundred $'s for a new terminal, they would want to make sure it can be used by all customers.  It would seem that a PayPal or other hardware agnostic provider would have a huge advantage in rolling out a similar system because it can be used by everyone.

 

This is the key question. But in Toronto, a very large portion of terminals seem to have NFC already. I assume when the US goes to Chip-and-Pin, all those new terminals will come with NFC support.