Apple (NASDAQ: AAPL) is expected to announce more details about the Apple Watch, its first wearable device, at a media event later today. While the company has detailed some basic information about the watch, it has not given a full range of prices or a detailed explanation of the device's battery life. Moreover, Apple's task will be to convince a skeptical public that they need a smart watch in the first place.
Apple's event kicks off today at 1 p.m. Eastern Time. The company first announced the device in September, and has said it will begin selling the watch next month.
According to unnamed sources at 9to5 Mac, which has a good track record of predicting Apple product details, the Apple Watch should be able to handle five hours of "fairly heavy" application usage and won't run out of battery during a typical day of mixed active and passive use. However, users will still need to charge the watch overnight. Further, the watch will have a "Power Reserve Mode" that can be used at any time to cut optional services to preserve as much of the device's core functionality as possible.
Another big question mark is price. The watch will come in two different screen sizes, roughly 1.5 and 1.65 inches, and different models built in stainless steel, aluminum or 18-karat gold. Users can also purchase different wrist bands. The introductory Apple Watch Sport model will cost $349. "The price points are going to be the key focus point," Citi analyst Jim Suva told Bloomberg.
A recent Wall Street Journal report, citing unnamed people familiar with the matter, said half of Apple's initial first-quarter production order of 5 million to 6 million units is being set aside for the entry-level Apple Watch Sport model. Additionally, the mid-tier Apple Watch is expected to account for one-third of the units, while the high-end Apple Watch Edition featuring 18-karat gold will ship in relatively small numbers in the first quarter. The report added that Apple plans to start producing more than one million units per month of the high-end model in the second quarter.
Citi's Suva said the next price point might be $550 and then $950. However, many analysts think the 18-karay gold edition could fetch much more, anywhere from $5,000 to $10,000.
The Apple Watch is expected to go on sale in the U.S., but Apple has dropped hints that it will be available in Europe, China and other markets. Citing unnamed sources with direct knowledge of the matter, Reuters reported that Best Buy, of the largest sellers of Apple products, may not get the watch at launch time, though the company declined to comment on the situation.
Other large retailers, including Macy's, Saks 5th Avenue, Bloomingdales and Barneys, said they had no immediate plans to carry the watch, according to Reuters, while Target and Nordstrom, along with all the major carriers, declined to comment on their plans.
"Apple is being cautious. There are too many unknowns around how this product will perform," Gartner analyst Van Baker told Reuters.
A big unknown is how Apple plans to market the watch and who it will ultimately be aimed at. The Journal reported last month Apple had to cut back on its ambitions for the Apple Watch, especially in terms of its health monitoring capabilities. When Apple started developing the watch around four years ago the company wanted the gadget to be able to measure blood pressure, heart activity and stress levels, among other metrics, but Apple was forced to abandon the technologies for the initial Apple Watch because some of the technologies did not work reliably and others were too complex.
As a result, the report said, Apple executives were struggling to define the purpose of the smart watch and why a consumer would want or need to buy one. Apple executives have focused on trying to define the Apple Watch as many things: a fashion accessory; something that can make mobile payments; a companion with Siri, Apple's digital personal assistant, to offer information and deliver notifications. Apple declined to comment ahead of the event, according to the WSJ.
"It's always been in tech, but Apple is now fundamentally a lifestyle company," Creative Strategies analyst Ben Bajarin told the WSJ. The Apple Watch, as a fashion-focused product, is the "culmination" of that transition, he said.
Yet Apple, for its all its brand power, still needs to convince the market a smart watch is worth buying. "Enthusiasm for smart watches has been relatively low, suggesting the wearable tech sector needs a 'magic' product to spark adoption," Cathy Boyle, senior mobile analyst at eMarketer, said in a statement. "Apple Watch is best positioned to be that product, given the device's close association with the iPhone and the size of the iPhone user base--one in four U.S. consumers regularly uses an iPhone."
"But smartphones already offer a convenient way to check the time, access the web and apps, and increasingly pay for products," Boyle noted "So, to succeed with a smart watch, Apple needs to create a compelling use case for the device, a feature set that offers far more than simply saving consumers the few seconds it takes to pull a smartphone out of a pocket or purse."
For more:
- see this 9to5 Mac article
- see this WSJ article (sub. req.)
- see this Re/code article
- see this CNET article
- see these two separate Reuters articles
- see these two separate Bloomberg articles
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