Analysis Analyst outfit CCS Insight issued a report about the innovation crisis in smartphones this week – and Apple has done little to address this with an iPhone update quickly labelled as incremental.
At its main annual product event, Apple implicitly acknowledged the failure of the smartwatch to take off by repositioning the second generation Watch either as an expensive Fitbit or simply a swanky status symbol.
More telling than any hardware feature, as an indicator of the market, are the recent programmes introduced to help shift smartphones. Apple and Samsung are essentially offering “hardware by subscription” to induce you to upgrade annually, not bi-annually.
Its channel – most prominently O2 – are selling you last year’s slightly soiled gear. If there wasn’t an “innovation crisis” would either programme be necessary? You’d think the phones would shift themselves.
The iPhone 7 does enough to steer users away from doing the unthinkable: of forgoing the upgrade completely, or looking to get “last year’s” cheaper iPhone 6s instead. The camera is much better, the result of key members of Nokia’s old imaging team being given free rein, and able once again to choose dedicated custom hardware, as they did with the Nokia PureView 808, but couldn’t with its Windows Phone-based successor. The waterproofing and dustproofing immediately makes the 7 more attractive.
As ever, Apple puts together a nice package (at a premium) and customer inertia assures the rest. If you’ve got AirPlay peripherals and a big investment in Apple-based subscriptions or apps, why rationally would you switch? Android represents much better value – it also offers a perceptible downgrade in scrolling performance, clipboard and all too often, battery life. We always told you a Java-based phone would involve compromises. But the opposite equally applies: if you’re happy with an Android, and unperturbed by the pervasive data collection and processing – why switch? So the two platforms have slugged each other to a stalemate.
My ears are ringing
The iPhone 7’s sting for upgraders is the inconvenience of having no analogue audio port. Apple has given household pets a huge incentive for their owners to upgrade: more fascinating toys to retrieve from down the back of the sofa. It’s the most cat-friendly iPhone to date. I don’t know why Apple didn’t make more of this at its launch event.
A fair chunk of the market, which only ever uses Apple’s bundled headphones, won’t notice any difference. But these get lost or broken anyway, and those £15 replacements either aren’t available, or aren’t £15.
In terms of long-term positives or negatives for the market, you can view it two ways. Will audio quality get better? By abolishing analogue there’s now a clearer digital path to your ear, and the phones get smaller. The iPhone 7 squeezes in stereo speakers now. On the other hand, the audio quality of analogue headphones at the low end (versus Lightning headphones at the same price point) is likely to favour analogue. They don’t need to license an expensive proprietary connector. At £15 you’ll notice the difference.
I don’t see a threat to Bluetooth audio companies from Apple’s “AirPod” earpieces – which look like you’re wearing a sawn-off toothbrush in your ear, and which were widely ridiculed on social media. Not at £149. They’re another distraction for your cat, really.
Watch this Watch
Apple’s Watch event was unusually defensive for Cupertino. Apple boasted that after 18 months, it was already No.2 in the world watch market, which is a really peculiar boast. If Apple had entered the high-end doorhandle market 18 months ago it may well be No.2 globally by now, as oligarchs and hotel chains rushed to install them. It doesn’t mean anything.
Hard sales numbers were avoided, and instead we heard about the Watch’s JD Power Associates NPS, or Net Promoter Score, which measures how happy customers are with something they’ve already bought. The last company I heard touting its high NPS was Stephen Elop’s Nokia.
One distinguished analyst says reports of Apple’s Watch “failure” are “data free”. I’ll offer two data points that reflect reality. Firstly, count the number of Apple Store employees wearing a Watch. On my most recent visits to the Apple Stores at Brent Cross and Covent Garden, the number in each case was exactly zero. Secondly, spend a few minutes to watch the foot traffic in an Apple Store. It’s usually very busy around the iPhones, not so busy around the Macs, and the vast Watch table is a deserted island. Apple knows this.
I’m surprised Apple stuck doggedly to the clunky square form factor, when circular designs look so much better. The absence of waterproofing and dustproofing in the original was baffling, making the device a bit of a pig in a poke. As Fitbit’s success shows, people mainly justify a wearable for health and fitness, but you couldn’t guarantee the Apple Watch would work after a swim, or a gruelling run in the rain. (Which is the best weather for running).
Buying an Apple Watch is as easy as A-B-C-D-E-F, er, D… er Reset
To be fair, almost everyone I know who wears a first-generation Watch is pretty happy with their purchase, but many hesitate to recommend it, even now the street price is £200. I don’t find this at the school gate, where £100-£150 Fitbit and Garmins rule the roost. The range really gets going at £600 (I’ve found the UX is too fiddly to use on the smaller Sports model) and at that price point it's hard not to argue your £400 isn’t better spent on some other technology. It buys a decent DSLR, for example.
Finally, buying an Apple Watch is now so complicated you need http://www.apple.com/uk/shop/buy-watch/apple-watch a six-way selector to make your choice. The cheapest Watch 2 is now £100, or 38 per cent, more expensive than the cheapest Watch 1.
“FTW!” as the kids say.
George Orwell once remarked that "there are some ideas so absurd that only an intellectual could believe them", and to understand smartwatches, just erase the word "intellectual" and replace it with "tech pundit". Neither Apple nor Google really wanted to make a smartwatch, but found themselves in a game theory dilemma (Google is obsessed with game theory): if they didn't, the other one would, and take all the spoils.
Almost all the tech experts told them this would happen. Now here we are, with piles of unsold smartwatches.