Can Apple Watch 2 reignite the wearables industry?

Apple hopes its time has come

When it comes to Apple there’s facts, FUD and opinions, but one industry watcher with a good reputation of getting things right, KGI analyst, Ming-chi Kuo, thinks there’s not one but two new Apple Watch models coming this year.

Same design

Following so soon after a Digitimes claim that Apple Watch 2 manufacture had begun with a tidal wave of new and existing users apparently prepared to snap up millions of the new designs within weeks, news of two new models should be of interest.

  • Model one: With a thinner display, the high-end Apple Watch 2 will boast the same general design, and will include GPS, a barometer and a faster 16nm processor, manufactured by TSMC.
  • Model two: With some updated components the second model will be the same as the current edition, but potentially at a new entry-level price.

However, if you are waiting for your Apple Watch to become truly smart, the analyst warns that a model featuring built-in LTE support won’t appear until next year. In 2018, the analyst predicts health sensor and function improvements and FDA approval to appear, along with new hardware designs.


In a sense, what’s being proposed here for Apple Watch 2 is a good example of the kind of incremental innovation that characterizes the growing business ecosystem of Apple Corp. There remains a huge disconnect between the reality of the way the company works and the way public and media thinks it works. In part this may have been due to the presidential, banner-waving role the media surrounded Apple’s legendary co-founder, Steve Jobs.

"The world thinks we delivered [a breakthrough] every year while Steve was here," Apple’s SVP Internet Affairs, Eddy Cue, told Fast Company. "Those products were developed over a long period of time."

It’s also the software

What we don’t yet fully understand is how Apple plans to maintain Apple Watch. For me the challenge is that when customers pay up to $20,000 for a product many will not want to replace it every year – and they will still want to feel they have got what they expect out of their investment. We all know mechanical watches are kept and bequeathed for decades, and while it seems unlikely tech gadgets can match that kind of longevity, value must be maintained at some level.

That’s where Apple’s software improvements become so important. We already know many of the key software features to look forward to in watchOS 3, including major performance improvements.

Together the software enhancements should go a long way towards reigniting interest among customers who may have stopped using their Apple Watch, while rewarding those who continue to do so. The upgrade should also enhance the second user value of existing Apple Watch models, enabling existing users to sell or gift their current models to make way for new editions.

The biggest question will be how well supported these devices are in three, four or even five years. Will they still run a current and secure OS, or will they be yesterday’s tech toys to be tucked in the old electronics box at the bottom of the closet?

I’ve a feeling Ming-chi Ku’s statements suggest a three or four year life cycle for these devices, but it will be interesting to see if this proves correct. Meanwhile Wristly’s recent claim of 94 percent user satisfaction gives the company a strong foundation on which to grow.

Time’s up

It remains to be seen if the new models will be sufficient to reignite Apple Watch sales. The world’s leading smartwatch has already become sufficiently iconic key competitors can’t fail to note its existence in their own patent filings.

However, with IDC reporting a 55 percent decline in sales, Apple will be hoping recent Nextworth data proves accurate, prompting a major upgrade session in its key FY 2017 first quarter.

All the same, it remains unknown if Apple Watch 2 and watchOS 3 will reignite the wearables industry. I remain convinced that the full extent of the potential of the product family won't be realized until an LTE-supporting model appears.

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Copyright © 2016 IDG Communications, Inc.

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