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Why would Apple want to make an iWatch?

Why would Apple want to make an iWatch?


Signs point to wearables becoming the Next Big Thing

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One year ago — almost to the day — the Wall Street Journal broke the news that Apple was testing an 8-inch iPad. In July, just days after Google’s announcement of the Nexus 7, it reiterated that a "smaller" iPad was coming. Those rumors, of course, foretold the launch of the iPad mini late last year.

With these reports, Apple is sending a message

Yesterday, it was The New York Times’ turn: Apple is now said to be "experimenting" with a "watch-like device," WSJ quickly corroborated the story. These reports, and the timing of them, are almost surely no coincidence; the public relations departments of many companies engage in a dark art, feeding carefully-selected bits of information on unreleased products and initiatives to publications under deep cover in an effort to set the tone, to correct misinformation, and to drive the conversation. It’s a game that Apple is widely understood to play.

As its schizophrenic stock swings in the breeze, Apple wants us — and more importantly, weary investors who are frantically searching for Cupertino’s next iPhone- or iPad-like hit — to know that it’s trying to untap the value in new markets where it doesn’t currently operate. There’s no better place than Wall Street’s newspaper of record to start spreading the news.

But what does Apple really stand to gain from making a wristwatch?

Put simply, evidence is growing that this is the Next Big Thing in consumer tech. "This is going to be a very large market and is developing much faster than most people comprehend," says MetaWatch’s Bill Geiser, a watch industry veteran with a long stint at Fossil on his resume. "I've long believed Apple would launch a smartwatch, so this comes as no surprise."

Evidence is growing that this is the Next Big Thing in tech

The blockbuster demand for Pebble’s Bluetooth-connected e-paper smartwatch on Kickstarter is only the latest indication that the watch isn’t dead, that people haven’t given up on strapping something to their wrists in a modern world where every cellphone tells the time — it’s just that the watch is now expected to do more. Nike’s wildly popular FuelBand is another example: it marries the smartwatch with an emerging trend toward personal health analytics and the "quantified self." At Best Buys around the country, you’ll find Jawbone’s Up; it doesn’t have a display, but it’s another example of technology going back onto the wrist after the advent of the time-telling cellphone could’ve killed the watch’s chance for a comeback.

Poor battery life and a lack of comprehensive support in iOS have limited the capabilities of the few smartwatches that have launched so far, including Pebble and Geiser’s MetaWatch. But if anyone has the resources to fix those problems, it’s Apple: the company’s unprecedented $137 billion war chest could go a long way toward new display technologies, chips, and fabrication techniques that make the category more practical for real-world consumers, just as the original iPhone’s capacitive touchscreen made full-touch smartphones livable for the first time. WSJ also reports that Apple’s massive manufacturing partner Foxconn is investigating a number of techniques for making wearable devices more power-efficient, attracting the attention of multiple Foxconn partners.

Arguably, an Apple entry could have the same effect on the industry that the iPod did at its introduction: it could take the smartwatch from a cottage industry, a niche, to an explosive market led by a must-have product.

There's still an opportunity for outsiders

There’s already evidence in the company’s products that this is happening. The iPod nano, for instance — which attracted so much attention as a makeshift watch that Apple added watch faces to later models — recently morphed into a larger rectangle that’s no longer appropriate for the wrist, possibly making room for a true smartwatch in the lineup. Recent Apple devices have started incorporating support for Bluetooth Low Energy, which sips a fraction of the power of a traditional Bluetooth connection. And iOS 6 added support for Bluetooth’s Message Access Profile (MAP), allowing connected devices to dig into the iPhone’s text messages for the first time. Smartwatch makers have also discovered other rudimentary "hooks" in iOS 6 for notifications that could hint at even better support for smartwatches in future versions. (Whether Apple will keep those hooks to itself or offer it to everyone who wants to make a smartwatch, though, is anyone’s guess.)

While an "iWatch" could be a massively successful product for Apple, Geiser notes that there’s still an opportunity for outsiders to get a piece of the pie. Wristwatches are often considered deeply personal fashion statements — jewelry, even — and that may not play to Apple’s strength: though an iWatch would almost certainly be a beautiful, high-end product, offering dozens of styles isn’t really part of the company’s playbook. "Smart wearables will quickly become functional fashion accessories. Fashion accessories are, by definition, forms of personal expression," he says.