Apple Watch in the enterprise: Why Apple entered the fray on wearables and the Internet of Things
With the Apple Watch, the world's most iconic technology company made its first big move into two markets that are preparing to reshape the tech world in the decade ahead: wearables and the Internet of Things.
Apple is never a first mover into nascent markets. So, just as it did with smartphones and tablets, in smartwatches Apple looked for the right timing to enter with a product that could distinguish itself. Like the iPhone and the iPad, with the launch of the Apple Watch the company chose not to focus its story on professionals or businesses. Nevertheless, it was professionals who did much of the early buying and then wanted to use the product to help them be more productive -- just as we saw at the launch of the iPhone and the iPad.
Both wearable technology and the Internet of Things are on a trajectory to explode in the coming years, as the consumer tech revolution that was unleashed by personal computers and that was spread beyond the desk by smartphones and tablets now expands to even smaller and more specialized devices. These technologies will serve as powerful new engines for big data and will drive even greater efficiencies in daily life and society. That's why Apple needed a strong play in IoT and wearables.
These smaller devices also have the potential to have the so-called 'halo effect' of driving buyers to related products in the same ecosystem. For example, if Samsung released a powerful smartwatch that resonated with professionals, it could drive more of them toward its Galaxy S phones. Or, if Motorola had a powerful IoT play that was especially well-integrated with its devices, it could gravitate more users towards its smartphones and tablets.
However, while interest has been steadily building for years in both smartwatches and IoT devices, there haven't been any killer products. Things like FitBit activity trackers and Nest smart thermostats have had hits, but haven't quite been mass-market successes yet.
In 2014, 89 different companies sold smartwatches and they sold 6.8 million of them. The market leader was Samsung, which sold 1.2 million smartwatches for the year, followed by crowdsource phenom Pebble, which sold 700,000.
Apple has not released sales numbers on the Apple Watch, but analysts have estimated that it sold at least 1.5 to 2 million smartwatches in its first month on the market. Overly exuberant analysts have estimated Apple Watch sales for 2015 will be as high as 25 to 30 million. As I've been saying throughout 2015, I see 10 to 12 million as a more realistic number. However, even my lower estimate would make Apple the runaway leader in the smartwatch market.
In terms of professionals using smartwatches to help them be more efficient and productive in their work, that's a race between Apple Watch and Google's Android Wear. For organizations -- and individuals such as consultants -- who use Google Apps, Gmail, Google Calendar, Google Drive, and other Google services, the Android Wear devices such as the Moto 360, the LG Watch Urbane, and ASUS ZenWatch are well-optimized right out of the box. And true to its history of excellence in smartphone notifications, watch notifications for these productivity apps are better thought-out and more useful on Android Wear than Apple Watch. And if you use Google Now, that's another big advantage for Android Wear. All in all, Android Wear is simpler and much easier to start using, as long as you are already deeply entwined in the Google ecosystem.
But, Apple's advantage is that it has more third-party app developers invested in its platform, and those app builders are extending the functionality of the Apple Watch in ways that are making it more savvy for professionals. For example, travel apps such as the ones from airlines and hotels as well as popular app makers such as TripIt are making the Apple Watch a source of quick, glanceable updates and alerts for business travelers. And apps such as Workflow, IFTTT, Numerics, Intro, and Timepage are and bringing business info and interactions to the Apple Watch in more efficient ways.
We should also expect that apps will get better as Apple optimizes the app experience on the Apple Watch -- it remains slow because it relies on the phone to run third-party apps. And now that app developers have the actual hardware in their hands, we're likely to get apps that are better designed and better optimized for the smartwatch experience.
The other factor to keep in mind about the Apple Watch and its broader use in business is that it's at the center of much of the company's Internet of Things strategy. With HealthKit and ResearchKit, Apple is betting on the potential of wearables and big data to help transform patient care in the medical industry. The Apple Watch is an activity tracker and a measuring device, and it's also a place to quickly view your health data in Glances. Look for this to expand. One day it could even involve the Apple Watch interfacing with exercise machines and medical devices, for example.
Another IoT play to watch is HomeKit, Apple's smart home platform. The Apple Watch could become a critical player there as well by letting you turn things on and off from your wrist, interact with Siri to control different systems, and serve as a security device to help authentic you. While this is first aimed at the home, it could potentially expand to see uses in small businesses and eventually the corporate world as well. The day may come when you can use your watch instead of a badge to scan into corporate offices, for example.
While it's unlikely that enterprises will be deploying many Apple Watches -- other than to designers and engineers to build company apps for it -- there will be considerations to be made for BYOD. When workers connect their Apple Watches to their company iPhones or personal iPhones that contain sensitive company data, IT departments will want to require employees put a PIN on their watches. The Apple Watch doesn't store nearly as much sensitive data as a phone or a tablet and it's less likely to be lost or misplaced since it's worn rather than carried, but it will still require smart policies and best practices to avoid data leaks and prying eyes.