Happy birthday Watch
Wristly Apple Watch Insider’s Report #46
April 26, 2016
As we just passed Apple Watch’s first anniversary, it would not be an understatement to say that Apple Watch has been under massive duress in the overall tech and media echo chamber during the last few days and weeks. The vast majority of commentators has decided to focus on the “less than iPhone” levels of commercial performance and essentially negate all the capabilities of what many of its early owners still continue to think is a very good v1 and which continues to garner top satisfaction marks with our panel.
Needless to say, we are eagerly awaiting WWDC in June to potentially (hopefully?) hear more concrete plans and info on v2 of the hardware and v3 of the OS, including what we assume will be significantly improved performance as well as more open API access for third-party developers.
Meanwhile, I recently started reading Steve Jobs’ well-known biography by Isaac Walterson. It’s partially a trip down memory lane for me as I first landed in Silicon Valley in 1989, but as it relates to Wristly, I have recently been struck by the potential parallel between Apple Watch and the iPod more so than the overall market sentiment to compare it to iPhone.
Indeed, as the book describes, the iPod was conceived and authorized once it became clear to Steve that the world was going to shift from a PC/Mac centric task-oriented universe to a broader “digital life” universe where the PC/Mac was to become the epicenter and workhorse around which many other tools and “gadgets” would connect and contribute. In Steve’s mind, these first gadgets included cameras, camcorders and other music players. Thus was the beginning of the iPod, which truly was the predecessor of iPhone.
The iPod Analog
Now, about 15 years later, the smartphone (iPhone) has obviously stolen the spot that used to belong to the PC/Mac as the center of the personal computing universe. If you haven’t yet, please take the time to read Benedict Evans’ “The smartphone is the new sun” post on the topic. (Link here). Yet today we are also in the early days of the next wave of the post-mobile era that many have called the Internet of Things which extends to all wearables including smartwatches as well as all other Cloud IT-connected sensors and devices.
In this new metaphorical world, Wristly’s take is that Apple Watch, more so than the smartphone, becomes the primary personal interaction control point. In that process, the iPhone over time will get relegated to only the more complex and involved tasks. This is no different from what has been happening over the last several years to the PCs with the rising usage of the smartphone. In hindsight we know that 2011 marked the “peak” PC era — 10 years after the first iPod and 4 years after the first iPhone.
From that perspective, Apple Watch and other smartwatches become even more strategic and important for the future of personal “computing.” With Apple Watch we have now fully entered the post-mobile era and its future is bright.
From a market and media standpoint, it is therefore also appropriate and insightful to compare and contrast Apple Watch’s early traction to the early days of the iPod instead of the iPhone.
In that context, it is helpful to remember that in its first year Apple managed to sell “only” 500,000 iPod units, compared to a PC market of the time of 150,000,000 units. This is a relative market size of less than 0.3%! It also took the iPod a whole four years to reach 10M units sold. Regardless of which market research firm or analyst you believe, Apple Watch has already surpassed this number, and will likely end up closer to 15M by the end of the first 12 months of sales.
When one contrasts Apple Watch’s 15M units sold so far, to the projected global sales of 1,2B smartphone units in 2016, we see a Watch relative market size of over 1%. This is three times as large as the relative market size for the iPod when compared to the PC in its first year. So happy one year anniversary Apple Watch! On behalf of the 2,500+ Wristly panelists, may we wish you many more years of success!
One year-in and 93% are still satisfied
Last week marked the fourth time we measures Apple Watch satisfaction in its debut year. Our original July 2016 rating measured Apple Watch satisfaction at 97%, even higher than the original iPad and iPhone. That rating has now slightly decreased to a total of 93% satisfied users in April 2016 with roughly equal numbers stating to be either “Very Satisfied” or “Satisfied”.
Somewhat in accordance with media reports, as we plot the four ratings on the chart above, while the number of satisfied users has remained very high, we do notice a small decrease of the aggregate number of satisfied owners and a more visible shift from “Very Satisfied” to simply “Satisfied.”
88% wear it all day every day!
And if we add those who state wearing it most of the day on most days, we have an aggregate of 96% regularly wearing their Apple Watch.
72% do not miss what they used to wear before
When we ask them how much they miss wearing what they used to wear before on the wrist, the large majority state it’s a non issue. Only 7% of those who used to wear something before “miss it a lot.”
63% would even turn back home to retrieve it
Decrypting the satisfaction data
Tech “Insiders” pulling the satisfaction rating down
Women who like it, like it significantly more
Tech evaluators and gift recipients are the most demanding (and the least impressed)
Older generations have a higher appreciation for it
Apple Watch is still not valuable enough even for some satisfied owners
This value perception is not influenced by income
And is consistent across models purchased
Looking ahead
The higher the satisfaction, the higher the likelihood to upgrade to the next Apple Watch
We also see significant gender differences in probability to upgrade
Almost equal purchase intent across the two primary models
More of those who will upgrade state that they will acquire a more expensive model
Market momentum is growing
Since last fall, we have asked our panel a few times how many sightings of other Apple Watches they noticed “in the wild.” This month’s reading is significantly higher than January’s reading. Back then, 31% of the panelists reported not seeing a single one in the prior week vs only 21% this month. Conversely, only 9% had reported seeing 5 or more other Apple Watches then, and this number has doubled to 18% now.
Yet 22% know someone who stopped using one
Finally, 22% of our panelists know at least one person who has stopped wearing Apple Watch. Our next step will be to reach out to these people and update our “Dissatisfaction learnings”.
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