Clémence de Bréchard Yasmine Maâninou Oumaima Hadi Lisa Brugheat
In this new phase of mobility, wireless and mobile technology expand our real world beyond simple smart devices, creating new digital worlds. Through this change, IT leaders and vendors are challenged by new privacy and security threats from new technology sources.
It’s no wonder that Apple is trying to operate a breakthrough in this market through its latest product: the Apple Watch. No one can deny that so far Apple is not doing so well in the smartwatch industry. However, the company is persistent in trying to pave the way for its product and increase its market share.
The Apple Watch is a wearable smartwatch that allows users to accomplish a variety of tasks, including making phone calls, sending text messages and reading email. Apple released the Apple Watch on April 24, 2015.
The watch’s Handoff capability allows users to start a task on the Apple Watch and finish it on their iPhone. For example, users cannot compose an email on the watch, but they can ask the Siri digital assistant to write an email and it will transfer the process over to the iPhone. Another feature useful to enterprise users is called “Glances”, delivering quick bursts of information aggregated from apps found on the user’s iPhone, which users can customize and access by swiping up on the watch face.
Developers can create or modify existing apps specifically for the Apple Watch with “Watch Kit”. Most of the current apps from Apple are refactored iPhone apps such as messaging — however, some native apps have been developed specifically for the watch, including “Activity”, “Workout” and “Camera Remote”. Third-party apps include a social media app for Facebook and apps for airlines and hotels that allow the user to check in through the Apple Watch.
A little bit of History…
The goal of the Apple Watch was to free people from their phones and make wearable technology for the wrist.
Apple was aware that watching a screen had become a vital need for people. They wanted to provide this in a more human way.
Rumours surrounded an Apple-developed wearable back as far as 2011, which conceptualized the device as a variation of the iPod that would curve around the user’s wrist, and feature Siri integration.
In April 2014, Apple CEO Tim Cook told The Wall Street Journal that the company was planning to launch new product categories that year, but did not reveal any specifics
On September 9, 2014, during a press event where the iPhone 6 was also presented, the new product was introduced by Tim Cook as “the next chapter in Apple’s story” with a video that focused on its design.
In comparison to other Apple products and competing smartwatches, marketing of Apple Watch focused more on advertising the device as a fashion accessory. Apple has also, in particular, focused upon its health and fitness-oriented features, competing against dedicated activity trackers.
Are smart watches a life-changing technology?
A disruptive technology is a technology that changes the way we do things. It usually costs less than old products and it allows company to quickly penetrate new markets. A disruptive technology always seems less useful to the consumers when it is introduced. But with time those technologies are likely to steal a lot of market shares and to replace the current technologies.
We believe that the Apple Watch is not a disruptive technology because it doesn’t really change the way we do things in other words it doesn’t disrupt people’s behaviour.
Who uses the apple watch?
We believe that the principle areas of application of the Apple Watch are first and foremost joggers who wish to carry their smartphones easily while doing their morning run with their sports’ and music apps. Although running apps are already very successful, a smartwatch would make the run easier for the jogger because he wouldn’t have to take his phone out of his pocket to check his running data. He can know anything we wants to just by looking at its wrist.
Secondly, there are the technology lovers who are always eager to discover and purchase the latest hip thing. Having a smartwatch shows people that you follow the latest trend. Just looking at the queues outside an Apple Store on the day of a new product’s launch, we can see that many people would do anything to purchase the Apple watch.
Furthermore, one could suggest that business men and women are also drawn to use a product such as the Apple watch because it is more practical and enables a fast interaction within the company which means more productivity. Apple Magazine has proven that by 2018, five million people will have enterprise-confidential information on their smartwatches. Even if this would make the company more vulnerable, it can be argued that once the company takes the plunge, it will experience a rise in productivity due to speed gains in internal communication. Moreover, workers would be happy to have a smartwatch and therefore be grateful to their company.
Lastly, we think that the Apple watch could also interest shopaholics because it eases e-shopping. Just by looking at your wrist and opening a shopping app, you can buy anything you want.
The industries involved in the Apple Watch technology are the Consumer goods industry, the Telecommunication, IT and Media industry and the Electronics industry.
How did Apple come with the idea of the Apple Watch?
S curbs illustrate the typical evolution of technology, for incremental innovations, as well as for radical innovations (when a new and superior technology becomes viable).
The first stage of our curve is the clock. Then there is the regular watch, the first iPhone, the iPhone 6 and then the Apple watch. The Apple watch appears to be the last improvement when it comes to smart-watch industry.
This product is still in the fluid phase because even if the Apple Watch will probably become the leader when it comes to the smart watch design (since Apple is a leader in smartphone design and consumers trust and love them
But the limits of the Apple Watch are clear. The first limit is the price because the Apple Watch is still expensive, just like any new product and more generally any Apple product. The second limit is the technology itself because the Apple Watch is using computer software.
Is there a dominant design or is a dominant design on the horizon?
There are several types of Smart Watches. Apple created one. But Sony, Samsung and also Huawei have also entered the market. All the watches look pretty similar. Apple however is different because the design of the Apple Watch looks like the design of their smartphones and this design has proved to be appreciated by consumers.
There is no dominant design but we believe that Apple can implement its design in the market. How come?
In the past, Apple has shown creativity when it comes to the design of its smartphones and has received a great deal of acceptance with consumers. Therefore, it would not be a surprise if the Apple Watch was to become the dominant design of smart watches. Consumers trust and love their design concept, it is easy to recognize and easy to use. Moreover, the market is in their favour. More and more people own iPhones, so there are more likely to by an Apple Watch if they want to buy a smart watch.
How does Apple’s marketing strategy explain its weight in the market?
Porter’s Value Chain addresses the economic logic of why the organization exists in the first place. It lists all the activities that create value for the final consumer. The more value an organization creates, the more profitable it is likely to be. And when you provide more value to your customers, you build competitive advantage.
When it comes to understanding why Apple is dominant on the market, one just need to look at the value chain. Marketing and sales is the core competency of Apple and what adds value to the final product. The packaging and the conception of the interface are well studied to correspond to the brand’s image: simple, sober, effective operating system and product design. Everything is made to reinforce the idea of a “ritual” when a customer is buying an Apple product: the packaging is making him/her wanting to open it, everything is well tidy, the surface is exploited as best as possible not to waste space. There is always a teasing part before a product is out, everyone knows if a new product is about to be revealed. Then there is a huge advertising campaign, using all kinds of medias possible (from huge billboards to magazines or TV). The pricing positions the product in the high range, and is justified by the quality. Apple sells the product to Apple stores and other specialized stores.
Finally, after-sales support and insurance policies permits the customer to get his/her product repaired or replaced in exchange of a certain amount of money. Without this policy, the product is guaranteed for a whole year.
Apple’s mission in terms of technology is to provide the best quality products using the latest available technologies. Apple seeks to always be the first company offering such innovations, with other brands following afterwards.
Over the years, Apple has developed an entire ecosystem of suppliers who support business operations. Their goal is to obtain stellar products and at a cost that represents the best possible value to the customers and shareholders.
Who are the main competitors?
The leaders of smart watches are not the ones you might imagine. With 23% of market shares, Samsung remains the leader of the sector in 2015. Following the South Korean company, Lenovo/Motorola have 10% market share and LG is the third leader with 7% market share.
Concerning the leaders who created and captured value, we cannot say that Samsung created the value. Seiko Receptor was the company that created the first connected smartwatch in 1990. Samsung didn’t produce its own watch in 1998.
All the leaders we mentioned earlier captured value, but did not create it. They took an existing innovation and adapted it to create their own product.
What are the strengths and limits of the apple watch?
The Apple watch clearly has a relative advantage compared to a regular watch. The Apple watch combines a simple watch and a phone. With all these features, the Apple watch manages to remain quite small on a wrist and trendy.
Compared to previous smartwatches, the Apple Watch offers almost everything other Apple products offer. Moreover, its design is more attractive and the watch is lighter.
The Apple watch is compatible with our habits because it makes life easier. It does not go against existing values, it improves them. Even if there is a huge debate on the repercussions of technology on our daily life, the Apple watch goes along with our values and beliefs, it does not disrupt them.
The Apple watch, like all Apple products, is very intuitive and easy to use. Within a couple of minutes, you can have access to any features the product offers. Any generation can use this watch.
One of the inconveniences with Apple Watch is that you cannot try it properly. Of course, you can go to any Apple store and try it for a few minutes, but you cannot have a sample. So the trialability factor is something the Apple watch lacks.
The observability factor is quite high because you can see people with the Apple watch anywhere in the street, in shops, in everyday life. While giving everybody a sample smartwatch would be difficult, providing smart watches for a trial period would not be such a bad idea. We are convinced consumers would be seduced by the product and keep it, and this would improve the reputation of the Apple watch.
How can Apple penetrate the market even more?
The first application identified of the Apple watch comes from its ability to be portability.
Sporty people are the first ones concerned to the Apple Watch: they are the early adopters of the product since it fulfils their need of carrying their phone while practicing and it allows them to use some sport apps more easily.
Their compelling reason to buy this equipment lies in the fact that the bracelet allows them to carry this connected object with the same features as a smartphone everywhere without holding it.
One should note that many business men and women are sporty people, so they might tend to use the apple watch on a daily basis for their morning jog.
The second application identified when it comes to the Apple Watch comes from its ability to facilitate and boost interactions.
‘Shopaholics’ will be impacted a lot because they need to be able to pay for their purchases wherever they are and the Apple watch comes with a system of payment called the Apple Pay which simplifies a lot of transactions. A new survey backs that up, revealing that 61% of US Apple Watch owners have used the mobile payments service with the wearable.
Commuters will also see the way they travel simplified: their transport subscription can be already uploaded on their Apple Watch.
The third segment identified is the group made of executives. Indeed, they need to optimize and maximize their activities all day.
Concepts and theories viewed and discussed in class