Lighthouse effect: Why the industry is so concerned about the success or failure of the Apple Watch

Apple Watch has been released for nearly 100 days, and there are various data forecasts about its sales. However, since Apple has integrated Apple Watch into other businesses, it is difficult for the industry to know the real sales data of Apple Watch. Despite this, the industry has recently given pessimistic or optimistic conclusions based on different sales data. So why is the industry so concerned about the sales of Apple Watch? What impact will its rise and fall have on the industry?

First of all, there is the impact on Apple itself. That is, there is a concern that the initial sluggish performance of Apple Watch will affect the future development of the entire company. However, we believe that this concern is unfounded. From the fact that Apple did not list Apple Watch as an independent business and did not disclose sales data in the early stage, Apple itself has made preparations for the possible sluggish sales of Apple Watch. Even optimistic sales will not have a substantial impact on Apple's revenue and profits. Because according to the most optimistic sales forecast in the industry, Apple Watch only accounts for 4% of the weight affecting Apple's stock price. More importantly, the latest statistics from market research organization Canaccord Genuity recently showed that the iPhone, which supports Apple's business (including stock price), accounted for 92% of the profits in the global smartphone market in the first quarter of this year, reaching a historical high.

As we all know, during this period, Samsung, HTC and other manufacturers have released their own flagship phones, and related Chinese manufacturers have also released flagship models that focus on cost-effectiveness, but none of them have had a substantial impact on the iPhone. This shows that in the smartphone industry, Apple is already unrivaled. In addition, what makes Apple worry-free about the future is that there are rumors that the next generation of iPhone is already in preparation for production, with an estimated output of about 90 million units, and the price may be higher than the current iPhone 6, which means that the status of the iPhone as Apple's core business has not decreased but increased, thus laying a solid foundation for the future development of Apple Watch or continued trial and error.

Let's look at the impact of Apple Watch on the industry. This impact is mainly reflected in the form and development model of wearable devices. The industry knows that the launch of Fitbit, a wearable device manufacturer specializing in smart bracelets, has been well received, which seems to have found a breakthrough for the explosion of wearable devices that the industry has been thinking about. However, given that many manufacturers have launched smart watches before, such as Samsung, Pebble, Lenovo, LG, Sony, etc., and their sales have been tepid, at least these manufacturers hope that Apple Watch can break this dullness with the influence of Apple's brand and market, and then drive the sales of smart watches as a wearable device form, and even popularize them.

From the perspective of development model, there are two factions in the smartwatch market, namely the minimalist faction represented by Pebble (focusing on simplicity, practicality and function) and the multifunctional faction represented by the Android camp that follows the application model of the smartphone ecosystem. That is, it focuses on the competition and application of the ecosystem (mainly the number of applications). Another issue is the relationship between smartwatches and smartphones, that is, should smartwatches exist independently from smartphones or rely on smartphones as an appendage? These are all things that the industry hopes to be guided by the success or failure of Apple Watch.

Mentioning the relationship with smartphones brings us to the final brand extension effect that the industry is concerned about. That is, since smart watches are currently closely related to smartphones, can manufacturers with a certain brand influence in the smartphone market gain some success in the smart watch market? From the industry's estimates of Apple Watch sales and the comparison with iPhone shipments, this brand extension effect is quite limited. This seems to remind related companies that smart watches and smartphones are two completely different brand perceptions for the market and users, and the correct market positioning and experience of smart watch products themselves are the key to success.

To sum up, we believe that the reason why the industry is so concerned about the success or failure of Apple Watch has little to do with its impact on Apple itself, but rather the hope that it can play a "lighthouse effect" in the industry. However, from the current perspective, this effect of Apple Watch is far from being realized. This also reflects from one side that wearable devices (such as smart watches) are still in the stage of crossing the river by feeling the stones. It is far more important to calmly think about its application model (including Apple) than simply judging success or failure by shipment volume.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.