Photo credit: techloon.com
Apple has never been the trailblazer that everyone makes them out to be. Historically, the playbook has been to bring a superior product to market after watching other organizations fail. This “second mover” advantage allows Apple to gauge the interest in a market, learn from other’s mistakes, and benchmark their amazing product against shitty ones.
Napster disrupted the music industry before iTunes. The iPod was the 6th or 7th MP3 player available to consumers. The Simon Personal Communicator hit the market 15 years before any iPhone. Apple prevailed each time because of a superior product that came with one of the strongest brands in the world.
If the rumors are true, the Cupertino-based goliath has their sights set on dominating a new industry – smart watches. Everyone from startups (Pebble) to established players (Google) have taken a crack at the mainstream market with minimal success. Early adopters will always flock to the latest shiny thing, but the real winner will capture majority of the non-tech savvy market.
I’m bearish on the wearable market overall, especially smart watches. There has yet to be a product that has substantial additional functionality that can’t be realized through my phone. Due to this, I haven’t been too excited about the iWatch – but that changed yesterday. Rumors claim Apple will unveil two-factor authentication between your iWatch and iPhone in an attempt to remove the friction in secure mobile payments. This has the potential to completely redefine the smart watch vertical.
With two-factor authentication, Apple would leverage their ecosystem of hardware and software to create a defensible market position. Very few companies in the world (Google is only other) have full control over the smartphone in your pocket, your daily operating system, and now the watch on your wrist. Multiple devices is one of the only ways that two-factor authentication can be introduced to the general population with very little friction.
To serve the masses, everyone is unbundling services. Apple appears to be headed in the opposite direction – doubling down on their closed system to create additional value. They are probably the only company that could pull this off but it won’t come easy. Android adoption is exploding on a global scale. Battery life is a constant concern. Most importantly, mobile payments require the highest levels of security.
Apple not only has to successfully protect an individual’s payment information, they must also gain the user’s trust. Credit cards are commonplace in North America but rare in countries like Indonesia. These emerging markets struggle with adoption because of the fear of fraud or the general distrust in banks or governments. With iWatch, it will take majority of people a long time to comfortably walk around with their financial details strapped to their wrist.
The deck is stacked against Apple. This won’t be new territory for them. I’m excited for the announcements. I’m just not holding my breath while they try to find success….