I think the conclusion have drawn here is that I believe (based on my opinion and perception after trying it on) is that Apple didn't make a device that feels like a watch. They made a computer that straps to your wrist. It has watch-like elements, but it just doesn't feel like a watch. Much like the iPhone doesn't feel like a phone.
Now, that doesn't mean i don't like the device. The feature set is very nice and I can see getting a lot of use out of it.
I just think the comparisons to traditional watches needs to stop. It's not like a traditional watch. After my try-on, i was convinced (quite clearly) that it will never be like a traditional watch. that's why i specifically said that I felt the AI sport watch felt more "true to itself". It's not trying to pretend to be something it really isn't.
A major reason why Apple is naming & marketing the ? Watch as a watch is the same reason the iPhone was marketed as a mobile phone - because those are the devices which the majority were/are familiar with at the time. The iPhone today, and when it debuted, is more accurately a mobile or pocket computer. But you can imagine the difficulty in convincing the majority of consumers that they needed a mobile computer which also had a voice app. Much easier for people to see it as a new & improved mobile phone. You will note that Apple has never even referred to it as a "smart" phone - just phone. Broadest possible market reach.
Same with the Apple Watch. Of course it is really a computing device you put on your wrist. Doesn't exactly roll off the tongue though. Maybe call it the "Apple iPhone wrist-worn companion device"? Or not. So Apple looks at what is the closest existing product, and that is very clearly a watch. Worn on the wrist, similar case size, uses a strap/bracelet, tells time, etc. If you are going to wear it, you want it to look as good/fashionable as possible. Everybody in the world pretty much knows what a watch is, and here is Apple with a new & improved watch.
It is all about how to get the most people to consider the devices.
You're right. What can I say, it's been quite a while since my last math class. According to Moore's Law processors grow proportional, the same steady growth year in year out, so processors will grow in the next 10 years the same way they did during the last 10 years, so what makes you think there's going to be exponential growth?
Not wanting to get into a detailed discussion of what exponential means, so how about considering what is "linear growth". Consider a graph of say # transistors per chip & years. With linear growth, the incremental improvement each year is roughly the same. Year 1 is 1M transistors, Year 2 is 2M, Year 3 is 3M, etc. Plotted on a graph, it is a straight line up to the right. The rate of change (1M per year) is the same.
With Moore's Law, the # transistors is doubling roughly every 18 months, but just for this exercise lets assume every year (which it did in the beginning). Year 1 is 1M, Y2 is 2M, Y3 is 4M, Y4 is 8M, etc. Plotted on a graph, you will see a curved line up to the right, and the curve gets steeper with time. That is exponential growth. The rate of change is not the same per year (1M, 2M, 4M, 8M,etc) per year.
To me the biggest argument is if someone thinks the average selling price is $422 that means:
Only 11% of the Watch revenue will come from Steel/Gold combined
Does that make any sense?
Why would Apple waste so much time and resources pushing and advertising the Steel/Gold lines if they are only going to make 11% of the Watch revenue?
IMO, there is no way on earth that will happen. Apple has done its home work. I'm sure that over 50% of the revenue will come from Steel/Gold watches.
My estimate conservative estimate is 70% Sport at $385, 29% Steel at $800, and 1% Edition at $12,000 = $620 average
My realistic estimate is 65.5% Sport, 33% Sport, 1.5% Edition = $700 average
Solving the wrong equation; it doesn't matter which ones sell better, except in the supply chain sense.
The Apple Watch is a halo product, in whatever variation chosen. All that matters is that people keep defecting from the competition to Apple's ecosystem. There is already rumor of more material variations in the near future, to appeal to more people, but the result is the same;
"Even more remarkably, this tasteful minder is offered not to a fortunate few but to millions of people of average means. In the true sense of technological democratization, Apple Watch is a phenomenon for mass consumption."
Solving the wrong equation; it doesn't matter which ones sell better, except in the supply chain sense.
The Apple Watch is a halo product, in whatever variation chosen. All that matters is that people keep defecting from the competition to Apple's ecosystem. There is already rumor of more material variations in the near future, to appeal to more people, but the result is the same;
<span style="line-height:1.4em;">people will overwhelmingly choose Apple.</span>
<span style="line-height:1.4em;">Horace Dediu of asmyco nails it.</span>
"Even more remarkably, this tasteful minder is offered not to a fortunate few but to millions of people of average means. In the true sense of technological democratization, Apple Watch is a phenomenon for mass consumption."
I agree building up the ecosystem is important, but that doesn't make the $422 estimate reasonable. Sog is right, that number is nonsens as the math clearly shows.
I agree building up the ecosystem is important, but that doesn't make the $422 estimate reasonable. Sog is right, that number is nonsens as the math clearly shows.
I have seen the $550 value for average selling price (includes some additional band purchases in there) which seems like a more rational conservative number. I do agree with those that have said the first quarter's model spread might not be the same as long-term, as the early adopters are Apple enthusiasts and often with more disposable income. So while the Edition might take a higher % initially (one report speculated 4%), it is likely to trend down to the 1% range or lower (IMO).
All speculation of course, and we won't see any official numbers out of Apple on the model makeup.
I do think many analysts are underestimating the margins though. In one of Horace's podcasts, he figured even on the Sport model the margins would be over 50%, and clearly higher as you go up the model/band options. While Apple will obviously have sunk billions into the R&D of this product and building up the manufacturing capability, the BOM of the watch will be constrained by essentially "being small" (yes - top of the line material and components, but there is only so much you can put in there), and the per-unit manufacturing costs will come down in short order. This should be the highest margin (physical) product that Apple offers in short order, so its contribution to the bottom line is substantial.
Not wanting to get into a detailed discussion of what exponential means, so how about considering what is "linear growth". Consider a graph of say # transistors per chip & years. With linear growth, the incremental improvement each year is roughly the same. Year 1 is 1M transistors, Year 2 is 2M, Year 3 is 3M, etc. Plotted on a graph, it is a straight line up to the right. The rate of change (1M per year) is the same.
With Moore's Law, the # transistors is doubling roughly every 18 months, but just for this exercise lets assume every year (which it did in the beginning). Year 1 is 1M, Y2 is 2M, Y3 is 4M, Y4 is 8M, etc. Plotted on a graph, you will see a curved line up to the right, and the curve gets steeped with time. That is exponential growth. The rate of change is not the same per year (1M, 2M, 4M, 8M,etc) per year.
Understood, in this case it's a growth of 2x versus a set number. Doing a search for Moore's Law graph show both ones with linear growth, and others with a curved growth. It all depends on how the graph is labeled.
Understood, in this case it's a growth of 2x versus a set number. Doing a search for Moore's Law graph show both ones with linear growth, and others with a curved growth. It all depends on how the graph is labeled.
The ones that look linear are on a logarithmic scale. This is designed to make exponential data look linear, which is easier for the human eye to perceive and allows for accurate fitting of the data to an equation without the use of a computer.
The ones that look linear are on a logarithmic scale. This is designed to make exponential data look linear, which is easier for the human eye to perceive and allows for accurate fitting of the data to an equation without the use of a computer.
Thanks, I learned that many moons ago, but couldn't remember the name.
The ones that look linear are on a logarithmic scale. This is designed to make exponential data look linear, which is easier for the human eye to perceive and allows for accurate fitting of the data to an equation without the use of a computer.
Comments
I think the conclusion have drawn here is that I believe (based on my opinion and perception after trying it on) is that Apple didn't make a device that feels like a watch. They made a computer that straps to your wrist. It has watch-like elements, but it just doesn't feel like a watch. Much like the iPhone doesn't feel like a phone.
Now, that doesn't mean i don't like the device. The feature set is very nice and I can see getting a lot of use out of it.
I just think the comparisons to traditional watches needs to stop. It's not like a traditional watch. After my try-on, i was convinced (quite clearly) that it will never be like a traditional watch. that's why i specifically said that I felt the AI sport watch felt more "true to itself". It's not trying to pretend to be something it really isn't.
A major reason why Apple is naming & marketing the ? Watch as a watch is the same reason the iPhone was marketed as a mobile phone - because those are the devices which the majority were/are familiar with at the time. The iPhone today, and when it debuted, is more accurately a mobile or pocket computer. But you can imagine the difficulty in convincing the majority of consumers that they needed a mobile computer which also had a voice app. Much easier for people to see it as a new & improved mobile phone. You will note that Apple has never even referred to it as a "smart" phone - just phone. Broadest possible market reach.
Same with the Apple Watch. Of course it is really a computing device you put on your wrist. Doesn't exactly roll off the tongue though. Maybe call it the "Apple iPhone wrist-worn companion device"? Or not. So Apple looks at what is the closest existing product, and that is very clearly a watch. Worn on the wrist, similar case size, uses a strap/bracelet, tells time, etc. If you are going to wear it, you want it to look as good/fashionable as possible. Everybody in the world pretty much knows what a watch is, and here is Apple with a new & improved watch.
It is all about how to get the most people to consider the devices.
You're right. What can I say, it's been quite a while since my last math class. According to Moore's Law processors grow proportional, the same steady growth year in year out, so processors will grow in the next 10 years the same way they did during the last 10 years, so what makes you think there's going to be exponential growth?
Not wanting to get into a detailed discussion of what exponential means, so how about considering what is "linear growth". Consider a graph of say # transistors per chip & years. With linear growth, the incremental improvement each year is roughly the same. Year 1 is 1M transistors, Year 2 is 2M, Year 3 is 3M, etc. Plotted on a graph, it is a straight line up to the right. The rate of change (1M per year) is the same.
With Moore's Law, the # transistors is doubling roughly every 18 months, but just for this exercise lets assume every year (which it did in the beginning). Year 1 is 1M, Y2 is 2M, Y3 is 4M, Y4 is 8M, etc. Plotted on a graph, you will see a curved line up to the right, and the curve gets steeper with time. That is exponential growth. The rate of change is not the same per year (1M, 2M, 4M, 8M,etc) per year.
To me the biggest argument is if someone thinks the average selling price is $422 that means:
Only 11% of the Watch revenue will come from Steel/Gold combined
Does that make any sense?
Why would Apple waste so much time and resources pushing and advertising the Steel/Gold lines if they are only going to make 11% of the Watch revenue?
IMO, there is no way on earth that will happen. Apple has done its home work. I'm sure that over 50% of the revenue will come from Steel/Gold watches.
My estimate conservative estimate is 70% Sport at $385, 29% Steel at $800, and 1% Edition at $12,000 = $620 average
My realistic estimate is 65.5% Sport, 33% Sport, 1.5% Edition = $700 average
Solving the wrong equation; it doesn't matter which ones sell better, except in the supply chain sense.
The Apple Watch is a halo product, in whatever variation chosen. All that matters is that people keep defecting from the competition to Apple's ecosystem. There is already rumor of more material variations in the near future, to appeal to more people, but the result is the same;
people will overwhelmingly choose Apple.
Horace Dediu of asmyco nails it.
http://www.asymco.com
"Even more remarkably, this tasteful minder is offered not to a fortunate few but to millions of people of average means. In the true sense of technological democratization, Apple Watch is a phenomenon for mass consumption."
Can anyone tell me if that picture in the article...is that a 38 or 42mm Apple Watch? Thanks in advance.
I agree building up the ecosystem is important, but that doesn't make the $422 estimate reasonable. Sog is right, that number is nonsens as the math clearly shows.
I agree building up the ecosystem is important, but that doesn't make the $422 estimate reasonable. Sog is right, that number is nonsens as the math clearly shows.
I have seen the $550 value for average selling price (includes some additional band purchases in there) which seems like a more rational conservative number. I do agree with those that have said the first quarter's model spread might not be the same as long-term, as the early adopters are Apple enthusiasts and often with more disposable income. So while the Edition might take a higher % initially (one report speculated 4%), it is likely to trend down to the 1% range or lower (IMO).
All speculation of course, and we won't see any official numbers out of Apple on the model makeup.
I do think many analysts are underestimating the margins though. In one of Horace's podcasts, he figured even on the Sport model the margins would be over 50%, and clearly higher as you go up the model/band options. While Apple will obviously have sunk billions into the R&D of this product and building up the manufacturing capability, the BOM of the watch will be constrained by essentially "being small" (yes - top of the line material and components, but there is only so much you can put in there), and the per-unit manufacturing costs will come down in short order. This should be the highest margin (physical) product that Apple offers in short order, so its contribution to the bottom line is substantial.
Understood, in this case it's a growth of 2x versus a set number. Doing a search for Moore's Law graph show both ones with linear growth, and others with a curved growth. It all depends on how the graph is labeled.
The ones that look linear are on a logarithmic scale. This is designed to make exponential data look linear, which is easier for the human eye to perceive and allows for accurate fitting of the data to an equation without the use of a computer.
Thanks, I learned that many moons ago, but couldn't remember the name.
The ones that look linear are on a logarithmic scale. This is designed to make exponential data look linear, which is easier for the human eye to perceive and allows for accurate fitting of the data to an equation without the use of a computer.
Ooh! Ooh! Can we do derivatives too? :-P