I have been using an Apple Watch for a couple of months now. A lot of people ask me why I feel it is necessary to have a screen on my wrist, and I certainly get why some would see it as a massive distraction. You have to be selective with your notifications. Generally speaking, I find it very useful, though not necessarily invaluable.
But every now and then I come across a new use case and think to myself, "well this is pretty cool." I recently discovered that you can use it for boarding passes, which means one less thing in your hands at the airport. And this week I've been using it while snowboarding, which is helpful if you're trying to manage a WhatsApp group chat and you don't want to take your phone out on the lifts.
The numbers also suggest I'm not alone in finding utility. Here are Apple's sales numbers from Neil Cybart of Above Avalon:
Apple has sold more than 90 million Apple Watches to date with 29 million sold in calendar year 2019. With an average selling price of more than $400, the Apple Watch is bringing in $12 billion of revenue per year, and that total is growing by 30% per year. After taking into account upgrade trends, the number of people wearing an Apple Watch has crossed 65 million. Based on my forward projections, the Apple Watch installed base will surpass 100 million people in 2021.
In Neil's view, the Apple Watch is indeed one of those paradigm shifts in computing. It is taking over tasks that our phones used to do and it is allowing for entirely new use cases. Neil cites three important features. We are now able to (1) seamlessly track/monitor aspects of our health, (2) intelligently receive small bits of information, and (3) augment our surroundings ("contextual awareness.")
For more on why the Apple Watch is / could be fundamentally changing mobile tech, click here.
At the beginning of this year – January 2nd to be exact – Apple revised its earnings guidance, downward. It was the first time in 15 years that the company had to do this.
Tim Cook’s letter to shareholders, which can be found here, focuses a lot on China and its “economic deceleration.” But M.G. Siegler of 500ish Words believes that a greater pivot could be underway. His piece can be found here. It’s a good read.
Firstly, Apple’s current growth period is probably over. And secondly, the company is likely going to need to diversify away from high margin hardware/software sales and continue to grow its Services business (something that Microsoft has, ironically, already done).
Here is an excerpt from M.G. Siegler’s essay (Apple’s Precarious and Pivotal 2019):
