The Smart Watch Distraction

So the latest Fall iGasm happened yesterday. If you could actually watch it through their constantly breaking stream, two new iPhones were unveiled as well as the Apple Watch. If you don’t know about them or the details, I honestly don’t know how you found this blog because you clearly live under a rock with no Internet.

I always tend to take the piss out of these events and the press fanboys that hype them up both because it’s fun and because you can clearly see the Apple bias that still exists in many places. The press who attend these events are hand-picked by Apple and they’re people who tend to play ball and not badmouth the company very often. Those that do get blacklisted. It’s a well known practice and it’s pretty gross but it’s also the norm right now.

We got two new phones that are mostly just spec bumps, including features that Android phones had years ago. The iPhone 6 that is $299 with a two year contract is getting features that my nearly year-old Nexus 5 has and I got it for $300 with no contract. Yeah, I will take pleasure in snickering at that. Oh, they also took away the 32GB model, the one most people wanted. We also got Apple Pay, an NFC-based payment system (which Android has also had for years) and it came right on the heels of the iCloud hack that exposed a bunch of celebrity nudes, something not even acknowledged or apologised for during the show. So basically, a company that can’t even keep people’s photos secure now wants your most sensitive financial information? Sadly, most people will probably sign up for it anyway.

I’ve always said that the important thing about Apple press events isn’t what they say, it’s what they don’t say. Like most companies, they love to publicly gush about their successes but when something doesn’t work out for Apple, they tend to just say nothing and hope the press ignores it (which they usually do.) Last year’s two big revolutions were going to be 64-bit processing capability in the new iPhone and iPad and iTunes Radio. Not a peep was mentioned about either which in Apple’s world, means these were both duds that no one cared about. You don’t need 64-bit processing for the latest free-to-play scum game (which is all that’s succeeding on mobile right now) and no one cared to leave Spotify. Clearly, the failure of these two initiatives didn’t hurt Apple financially this year but it’s quite telling nonetheless.

The real big news though was the Apple Watch, something which met with a surprisingly tepid response, even from people who were going mad for the iPhone 6. Apple’s smart watch watch is certainly not the first one but many said that because it’s Apple, this will be the one that gets it right. However, we got very similar reactions to this that we got to the various Samsung watches they rushed to get out well before: “It’s too expensive. It’s too bulky. Who needs this?” Combine that with it requiring the iPhone 6 (which much like Samsung’s offering, is a complete bullshit move to sell more phones), a $349 price tag when you can buy the high-end iPhone 5 for $299 (admittedly with a contract) and a release date of next Spring (see first reason) and a lot of people were like “That’s it?”
The level of “meh” I saw right away surprised me but this is ultimately what I expected and like the Samsung and other smart watches before this, I expect it to be a dud. Why? Simply put, smart watches are the attempt by an entire industry to distract us from the fact that they’ve run out of ideas and are trying to keep their unsustainable level of profits growing. It’s why Samsung keeps making more smart watch models, even though all their other ones were failures and it’s why Apple wants in on this.

When Apple brought the smartphone revolution to the mainstream with the iPhone 3G, seemingly massive leaps were being made with each new yearly smartphone iteration. Huge improvements in speed, usability, capabilities and feature sets were hitting and every new version of a phone brought with it something you had to have. The problem is the industry burned that bridge too fast. We’ve now reached a point where they’ve run out of stuff to put in new phones. Newer models are a bit faster, maybe have a bit better screens, have some tweaks to the operating system, maybe are a bit thinner (and they’re running that ability out fast) and that’s kind of it. There’s rarely something that is such a revolutionary feature, it demands an upgrade. Much like PCs, smartphones have already become commoditised, where what a lot of people have is good enough and upgrades are just too expensive to do for minor improvements that are unlikely to affect you. People are also realising that smartphones aren’t enough to replace their PCs and when most of what you do is check e-mail, text, use social media and occasionally play the popular free-to-play game, you really don’t need state of the art tech for that.

This problem has already resulted in a severe drop in tablet sales and while smartphones aren’t going to experience as big a drop because they tend to get beat up more easily, a similar thing is coming. Until R&D catches up with some revolutionary new features, people just aren’t going to replace their phones as often. Apple, Samsung et al. know this and their stop gap answer is a new product category: Wearables, which includes things like watches. Their hope is that if they can make a new must-have gadget, they win on both fronts because not only do they convince you to buy another expensive new toy, they can get you to pair it with the expensive smartphone in your pocket, which they also happen to make. If they can make smart watches a hit, they win on two fronts.

Here’s the thing though: Smart watches are solving a problem no one demanded a solution to. With the exception of some people and the fashion conscious, smartphones have largely replaced watches. Why do you need an expensive time piece on your wrist when you can just check your phone? Furthermore, who is going to pay $350 to solve this problem by buying a device which is just an extension of the other $300 device that’s inches away in their pocket?

Of course, the answer is that these companies are trying to build in additional features to make it “more than just a watch.” Things such as fitness tracking and specialised apps which make it do stuff you can’t get anywhere else. The problem is, these are still all things your smartphone can do already and does anyone really want to pay $350 for a fancy pedometer or an inaccurate heart rate monitor? I have a FitBit Force that costs $100, is a perfect pedometer, it syncs its data to my existing smartphone and hey, it even tells the time if I want! People who are really into fitness already have other stuff they’re tied to and almost all of it cost a lot less.

Rather than just admit they moved too fast and that the explosive sales and profits smartphones generated was a bubble market that’s unsustainable at current levels, Apple, Samsung et al. are trying to create a new market to distract people away from that and which will hopefully bring in enough money to offset the decline in phone sales until they can get that next “must have feature.” It’s a distraction, them trying to go to the person going “Why do I need an iPhone 6 or a Galaxy Note 4?” and saying “Hey! HEY! Look over here, it’s a new gadget and it’s awesome and you should buy it because it’s NEW!” I don’t know if people are being sold though.

People only have so much disposable income and that’s being squeezed more and more every day. They already have smartphones and tablets and are realising they can’t afford to pay hundreds each per year just for incremental upgrades. The thing is, they also are realising they can’t afford to spend $350 on a cheaply made smart watch (seriously, $350 can get you a Hell of a nice proper watch) for the same reason and now have a third device that requires upgrades on a regular basis.

Tablets are basically enlarged smartphones but the difference is they’re bigger and last longer, meaning that they allow you to easily do things for long periods that would be impractical on a phone. Smart watches are the exact opposite, they’re expensive devices that have a much smaller screen and so much less processing power that they can only do a handful of tasks, many of which require tethering it to your phone anyway. So really, what’s that making better? What problems are these devices actually solving that the smartphone didn’t already solve? That’s the question I’m asking and based on what I read yesterday, it’s what a lot of others are asking too.

I have zero interest in a smartwatch from Apple or anyone else, as does everyone I’ve talked to. We’ll see how the Apple Watch does next year but everyone else who has tried this has not met with success. Apple’s had numerous small failures peppered among their epic success the last few years but I wonder if this could be the first high-profile failure for a company that’s clearly starting to flail about and lose focus in a post-Steve Jobs world. Rather than trying to invent new product categories no one asked for and that their own devices rendered obsolete years ago, I think these companies should slow down and accept that smartphones will continue to do well but the explosive initial growth was just that. Like all industries, those growth curves ultimately flatten out and while there’s still lots of prosperity to be had, it’s going to be a lot more measured.

Oh who am I kidding? This is the world of publicly traded companies. Reasonable growth and expectations are not what Wall Street demands. If the Apple Watch is a failure, it will still be considered a smarter move than just accepting that the honeymoon is over and it’s time for the smartphone industry to start living in reality again. Investors don’t like reality.