On January 27th Apple, and the market, where loving their quarterly report. That being said, the impetus on Apple to have a smash hit with their (ridiculously) highly anticipated Apple Watch is still very much on, for a number of reasons.
One of the first and most noticeable is the fact that sales of the company’s ubiquitous iPhone actually slipped almost 7% last year, even after a 30% rise during the holidays. Yes, the new iPhone 6 and iPhone 6+ are selling like hotcakes but, with 70% of their revenue made up by the iPhone, Apple definitely needs to start innovating again. It doesn’t help that sales of iPads are plummeting and, in their quarterly summary, the iPod wasn’t even given its own line.
Another major factor is that there are a lot of new customers buying iPhones right now that have never had an Apple product before. In fact, CEO Tim Cook boasted that “The current iPhone lineup experienced the highest Android switcher rate any of the last three launches.”
What that means for the company is that, with so many new iPhone customers who’ve never gotten an Apple product before, they’re going to be looking for products pair with that iPhone and, statistically speaking, it’s not going to be an iPad or iPod. Yes, sales of Macs should definitely benefit but, with an awesome Watch available, the combination (and sales) would be huge.
Historically speaking, when the iPod was introduced back in 2001, Apple desktops and laptops got a huge boost from its popularity. When someone purchases an Apple Watch they’re basically going to be committing themselves to Apple and Apple’s iOS because, let’s face it, the Watch isn’t going to work with Android or other devices. When you consider that wireless carriers make it ridiculously easy to switch, anyone who’s already purchased and Apple Watch is going to be much more invested in sticking with iPhone the next time an upgrade comes around.
Another huge factor right now is that Google, and their Google Glass, has hit a brick wall. That opens the door wide for Apple to come in and show the world that a wearable computing device can be both fashionable and extremely useful.
The simple fact is that Apple needs another winner, and badly. During the holidays the only two product lines that had improved sales were iPhones and Macs. IPods are almost a thing of the past and sales of iPads are diminishing fast. While it might not have the same upgrade cycle as the iPhone enjoys, if the Apple Watch succeeds (and it better) Apple will not just have a brand-new product to brag about but also one that will keep the profits coming in.