Although Android powered watches have been around for a while, Apple only announced their first generation smart watch late last year. While some were impressed by what they believed to be yet another example of Apple’s ‘innovation and leadership’, others were distinctly unimpressed with the gadget and found it to be underwhelming. Mr. Jean-Claude Biver, LVMH (Louis Vuitton Mo«t and Hennessy) Executive, falls in that second category. He dismissed the smartwatch as ‘feminine’ and likened it to something designed by a student designer, in what was one of the most unflattering reviews of the device. What makes his observation particularly scathing, is that he also happens to be the boss of such reputable wristwatch brands as TAG Heuer, Zenith and Hublot. But it seems like the negativity hasn’t percolated down to the mainstream consumers. Recently, there have been reports that Apple may have had almost a million of these watches pre-ordered on the first day itself. That in itself, outnumbered smartwatch sales from all Android Wear OEMs combined, for the whole of 2014.
Today, in a new report, quoting KGI analyst Mr. Ming-Chi Kuo, MacRumors claims that the Apple watch has already sold more than 2.3 million units. If that is to be believed, then Apple, in one fell swoop has managed to corner the entire smartwatch market, something that Google hasn’t been able to do in all these years. That, despite the higher pricing from Apple, compared to other platforms including devices running Android Wear and the crowd-funded Pebble smartwatch which has sold over one million units in two years.
Traditionally, Apple’s iOS has been the more lucrative platform for developers simply because there is more money to be made on the platform from app purchases and the like. Researches have shown, that iOS users have, over the years, spend more money on apps, music, e-books etc. than Android users. But Google still has been able to retain developers mostly because Android has the market-share going for them. It has, according to latest reports, over 80% of the smartphone market – significantly higher than that of Apple’s. But now, with the way the smartwatch market has started playing out, for the first time since the iPod days, Apple has become the dominant player with the dominant platform in a particular product category and not just a niche player with low volumes but massive margins.
It remains to be seen of course, if Apple manages hold onto their massive market share going forward or if mainstream consumers even embrace the segment as enthusiastically as they’ve embraced smartphones, or will it cool down after the initial enthusiasm of early adopters just like what happened with tablets? What Apple’s massive success however, does do, is that it makes everybody tread with caution going forward. There have already been reports about how smaller OEMs without money to burn, are starting to shift to smart fitness trackers, which need significantly less investment on R&D than smartwatches. One would have expected Apple to expand the smartwatch market, if successful. Any more success, and they might just kill off any competition especially at the premium end of the market.