“Apple Inc. (NASDAQ:AAPL) may not be able to release the iWatch this winter as previously reported,” writes International Business Times. This seems to be what everyone is reading into recent news on the topic.
Let’s face it, there are already several so-called smartwatches on the market. Two years ago gottabemobile.com reported on these:
- Fossil Metawatch
- Sony LiveView
- I’m Watch, and
- The inPulse BlackBerry Watch
(Not to mention the iPod Nano with a strap)
Now we also have, or will soon have, the following:
- Pebble E-Paper Smart Watch
- Neptune Pine
- Sony SmartWatch
- MetaWatch
- Martian Passport
And according to a report by the Verge, Microsoft Corporation (NASDAQ:MSFT) is testing a “Surface Watch.” This would presumably run some form of Windows Phone 8. It is rumored to interface with the Surface tablets. Of course, this could be up in the air now given that Microsoft Corporation (NASDAQ:MSFT) has just taken a staggering $900 million write down on the Surface RT tablets. The reception has been so bad, that the future of the product must be in question.
Most of these run some form of the Android operating system by Google Inc (NASDAQ:GOOG) (which is also rumored to be working on a smartwatch). Android is the most common mobile phone operating system, and is free, so it is a natural choice for many vendors. Google Inc (NASDAQ:GOOG)’s objective here is to make revenue off the advertising driven by such devices.
For the most part, the smartwatches are designed to communicate with the user’s smartphone to make calls, tell you the weather, etc. Typically, they provide some limited internal functionality, but provide more advanced computations and cellular communications only when tethered to your smartphone.
There are rumors, however, that Microsoft Corporation (NASDAQ:MSFT)’s may have its own LTE cellular capability. While a smartwatch would be a secondary product for the massive software company, it really needs a big mobile win in order to counteract the enormous failure of its tablet offerings if it wants to remain relevant in the new “post PC” world.
Google Inc (NASDAQ:GOOG) is also struggling somewhat in the mobile word. Obviously Android is a big win, but its Motorola acquisition is only increasing its losses, dropping $14.11 billion in the second quarter, versus $11.81 billion in the same quarter last year. It needs to keep its hand in the mobile advertising pie as consumers increasingly go to apps to service their needs rather than search engines, and both Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT)’s WP8 feature other search engines.
The future
“Smart watches will be the most important new product category in consumer electronics since the iPad defined the market for tablets,” said Chris Jones, Canalys VP and Principal Analyst.
Their recent report claims that sales of smartwatches will jump from an estimated 500,000 this year, to 5 million in 2014 – growing tenfold as a new generation of devices from Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Samsung and others are launched.
Apple behind
It is known that Apple Inc. (NASDAQ:AAPL) has filed for the “iWatch” trademark in several countries, so the rumors of the product seem to be valid.
So with all this commotion, why are people predicting that Apple Inc. (NASDAQ:AAPL) will be delayed? It centers around a piece in the Financial Times that Apple
has begun hiring “aggressively” for the project in recent weeks, say people familiar with Apple’s plans for the wearable device, a move that shows it has stepped up development but which raises questions over the ability of its own engineers to develop wearable technology.
They go on to say:
the endeavor involves “hard engineering problems that they’ve not been able to solve,” according to one source.
All this leads to rumors that it will not be released until next year. Forbes headlines Apple’s iWatch Delayed Because It’s More Difficult Than It Looks.
So once again, it seems that Apple is behind the curve, lost its innovative edge, that without the great Steve Jobs, they no longer can be the first. In short, they are in decline.
Or are they?
It should be remembered that Apple has frequently not been the first into a product category, yet succeeded. Take the iPod. There were several companies with MP3 players on the market before Apple’s iconic winning product. Apple came in with a product that astounded people with its beautiful design, and its simplicity of use.
And this is precisely what begs the question: If the design of the smartwatch has already been formed by the existing products (none of which exhibit any breakthrough technology), then why exactly is it that Apple finds the problems so difficult?
I, of course, do not know. But I am sure of one thing, Apple releases new products when they are ready to. If they are working on some difficult problems, then it most likely will be something astounding.
For this reason, I am betting that the iWait will be iWorth-it.
You may love Apple and their products, or hate them to the core, but you cannot deny that Apple now has the highest market cap of any company, their products are trend setters, and currently they are trading at rather low multiples, especially regarding forward earnings.
Warren Buffet has the maxim: “Invest in what you know!” So, for those who want a unique perspective on Apple’s success, I have a series of articles Understanding Apple. I hope you will find them helpful and provocative.
Let me know what you think.
The article Why the Wait for the iWatch Will Be Worth It originally appeared on Fool.com.
Malcolm Manness owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Malcolm is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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