With the Apple Watch Series 2, Apple has narrowed its focus on the wearable fitness market, a huge plus from its earlier fashion offering. However according to analysts, unless it can partner the new watch with a killer app, its sales chart will be nothing to talk home about.
Having tested the waters for the last two years, with various styles and apps that cater to every need and appeal of customers, Apple seems to have finally honed its marketing strategy. The Apple Watch Series 2 is squarely aimed at the burgeoning health conscious and athletic audience.
The focus of the Apple Watch Series 2 on fitness not only enhances the watch’s core appeal to its audience but also cements its status as a niche device, according to analysts.
“Apple is responding to what has resonated with customers,” said Jan Dawson, an analyst with Jackdaw Research. “The problem is there are only so many people who want to wear a health and fitness device. If they want this to be really massive, they’re going to have to go broader.”
According to IDC data, the first generation Apple watch did not have mass appeal. It sold only 1.6 million units in the second quarter, which is down by more than 50% from figures from a year ago.
Apple’s first generation watch was touted by the company more like a fashion accessory than a fitness tracking device. But with the launch of the second generation, Apple Watch’s new videos clearly focus on health enthusiasts.
The Apple Watch Series 2 starts at $360, includes a GPS chip and comes with a waterproof casing. In fact, Apple went ahead and designed a special edition with Nike. That’s the biggest hint the company has given as to its core strategy.
For runners who want an internal GPS system and do not want to lug around their smartphones, the Apple Watch Series 2 is crucial. More importantly, it has been cheered for exactly these new features.
“At last Apple Watch is something I can use as a runner,” wrote Ian Bignell (@eyan_b) on Twitter.
Colin Gillis, an analyst with BGC Partners thinks that Apple will want it to remain a niche device. Niche markets typically attract a higher premiums.
“It’s becoming a more interesting product, but it is not going to be able to meaningfully impact the bottom line if iPhones slow down,” said Gillis.
Although the focus on fitness is a big help, Apple will still need a breakthrough app to nudge mainstream runners to widely adopt the watch.
It also remains to be seen how its Pokemon Go strategy develops.
“The killer app for the watch remains to be seen,” said Gillis.