Apple Watch…Market Lead or Market Follower?

Rod Newnham (215180819)         Monochrome-Apple

Announced by Tim Cook on September 9, 2014, Apples new product – the Apple Watch became available April 24, 2015 with the shipment of 4.2 million smartwatches in the second quarter of 2015. The Apple Watch became the best-selling wearable device at the time.

Apple kept the development of their smartwatch process under tight wraps, Kevin Lynch was brought on under some secrecy by Apple to make wearable technology for the wrist. There was much speculation and rumour around an Apple wearable (a key strategy in Apples impeccable timing and marketing of the product?). Speculation began in 2011, in early 2013, both The New York Times and The Wall St Journal reported that Apple was developing an iOS-based smartwatch. Bloomberg and Financial Times reported that Apple had over 100 designers working on a smartwatch project. With further reports in the media in 2013 indicating that Apple planned to release the device by the end of the year.

Apple CEO  told The Wall Street Journal that they were launching new products in 2014. It was then reported production was expected to begin in July for a release in October. On September 9, 2014, the New Apple Watch (along with the ) was introduced by Tim Cook as “the next chapter in Apple’s story”. Apple CEO  explained that Apple Watch was “a precise timepiece, a new intimate way to communicate from your wrist, and a comprehensive health and fitness device.” A ‘reveal’ video focusing on design, case style and band combinations was made available to the consumer.

Apple CEO Tim Cook told The Wall Street Journal that they were launching new products in 2014. It was then reported production was expected to begin in July for a release in October. On September 9, 2014, the New Apple Watch (along with the iPhone6) was introduced by Tim Cook as “the next chapter in Apple’s story”. Apple CEO Time Cook explained that Apple Watch was “a precise timepiece, a new intimate way to communicate from your wrist, and a comprehensive health and fitness device.” A ‘reveal’ video focusing on design, case style and band combinations was made available to the consumer.

But hang on – did Apple really use a top down or bottom up analysis to evaluate their market?

With a team of devoted in house developers, the company has a culture of developing new products and involving the customer later in the process..as Steve Jobs famously said “Customers don’t know what they want until we’ve shown them” This ‘top down’ approach is common in high-technology companies and contrasts with “co-creation” with the customer (Lacobucci, 2012).

Was it that they entered the market as a competitor and not an innovative leader? They weren’t exactly breaking new ground unlike many of their products.

Unlike many of Apple products, Smartwatch competitors were already in the market when Tim Cook introduced the Apple smartwatch. It was possible to acknowledge the market’s potential, compare products, analyse, calculate and predict their slice of the current market, more common to a ‘bottom up’ approach. Throughout the smartwatch concept testing and design development stage, Apple had the opportunity to get customers feedback on existing market products.

This is a classic case of entering the market at the ideal “market growth” stage when the higher risk “market introduction” phase was undertaken by other companies (Lacobucci, 2012). This allowed them to utilise the power of brand extension and leverage off Apples formidable iconic image as they entered the market.

The result?

 Despite its late arrival to the wearables market, according to market research from Juniper, Apple claimed the majority of the market with less than a year of sales under its belt. It accounted for over 50 precent of smartwatch sales in 2015 – it only launched at the end of April.

Marketing…as a fashion accessory

Marketing of Apple Watch has focused on advertising the device as a fashion accessory unlike their other apple products). Advertising has featured in fashion forums including an initial campaign in Vogue magazine.

The marketing slant is on band, styles and colours (the technological features are not the focus). Does this signal a shift from presenting a choice to consumers of a utilitarian product to a hedonic slant?

Hirschmann & Holbrook (1982) make reference to ‘hedonic goods’ as “one whose consumption is primarily characterised by an affective and sensory experience of aesthetic or sensual pleasure, fantasy, and fun”. With remarkably few models but a multitude of colours and bands available Apple’s smartwatch product could be considered a ‘hedonic good’.

Perhaps Apple are already starting to prepare for the ‘maturing market’ phase?

References

Iacobucci “Marketing Management” 2012

Hirschmann and Holbrook 1982 “Consumer Choice Between Hedonic and Utilitarian Goods” Journal of Marketing Research Vol.XXXII (February 2000)

http://www.juniperresearch.com/press/press-releases/apple-watch-claims-over-50-of-2015-smartwatch

http://techcrunch.com/2015/08/27/apple-watch-not-a-flop-now-2-wearable-just-behind-fitbit/

Eva Dou (June 20, 2014). “Who Is Apple’s Watch Maker?”.The Wall Street Journal. Retrieved February 8, 2015.

http://www.juniperresearch.com/document-library/white-papers/smartwatches-clocking-the-trend

“Apple Watch – Overview”Apple. Retrieved September 9,2014.

 http://www.digitaltrends.com/apple/apple-watch-splashed-across-12-pages-of-vogues-march-issue/#/8

 

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