Wearables after the apple watch

Despite the sustained hype, take-up of wearables has been underwhelming, at best. And with this week’s reveal of the Apple Watch comes a big question: Has Apple done enough to take wearables mainstream?

Rolex took out a 10-page spread in the FT’s “How To Spend It” magazine last weekend, under the strap-line “There is only one way. The Rolex way.” Given the amount of buzz that preceded the Apple Watch launch, one could read that as an attempt to hold back the inevitable tide. Rumour has it that, in the run-up to the launch, Apple’s Jonathan Ive pronounced the whole Swiss Watch industry “f**ked.”

While it’s one thing for Apple to make Rolex pay attention to its latest offering, it’s another to take a sizable bite out of the Swiss watchmaker’s business.

Earlier this year (before Nike pulled its FuelBand) I posited that wearables are a tech category in search of a compelling use case. I also laid out four key hurdles to clear before mass market scale could be reached.

The Apple Watch has made significant leaps over some of these hurdles, but still has work to do. Apple plans to leverage tight integration with its burgeoning ecosystem to enable effortless payment, door unlocking and remote iPhone control, among other functions. As developers add to the app neighborhoods, more people will find enough compelling reasons to shell out. But there’s still no killer use case.

2. Fashion faux pas no more

To non-techheads, most wearables to date have been lame eyesores. The most impressive element of Apple’s proposition is how it approached the fashion accessory problem–both in terms of design sensibility and range of personalization options. It has created a sophisticated customizable platform for consumers to combine permutations of case size, materials and finishes, as well as digital face options and a range of proprietary straps. The “Milanese loop” strap is a thing of beauty and the “Modern buckle” is worthy of a Gucci bag. That said, the case looks a bit chubby–a signature of recently hired Apple designer Marc Newson.

3. Tech is still not ready

One of the biggest bugbears of first-generation smartwatches is how often they need charging. It’s instructive that battery life was not mentioned during the event, apart from a passing reference to charging the watch at night.

4. Not a phone substitution

So will this be a category killer?

As it stands now, the appeal of the Apple Watch more closely resembles the niche Apple TV than it does the ubiquitous iPod. Undoubtedly, second and third generation products will be slimmer, and have longer battery life, but anything short of a major technological breakthrough won’t be compelling enough from a functional or aesthetic point of view to drive smartwatches into the mainstream.

There’s a good chance it will still dominate the narrow confines of the smartwatch market currently populated by the likes of Samsung, LG, and Motorola. Yes, it only works with the iPhone, but it’s the only full-fledged smartwatch that works with the iPhone. And yes, it leaves the massive Android user base untouched, but market research shows that Apple commands upward of 90% of the ultra-premium smartphone market–which is likely the same group of people interested in this first wave of smartwatches, most of which will cost between $300 and $500. (And there likely won’t be a critical mass of people who will switch smartphone platforms if they do want something besides the Apple watch.)

But once the fanboys and rich kids have snapped them up, how wide is their appeal? As gadgets, they are expensive and ostentatious activity trackers. As personal identity emblems, they face wide and varied luxury watch competition, ranging from Uniform Wares to Gucci to Tag Heuer. Apple is not going to make much more than a dent in the $23 billion wristwatch market, and there will still be room for activity trackers like the Fitbit Force.

Rolex can sleep safely, as it sells predominantly to baby boomers and Generation X. Those groups got the watch habit before mobile phones arrived, essentially buying a fashion accessory or status piece with a retro nod to tradition. When watch connoisseurs buy into craftsmanship and precious materials at the high-end, few risk their investment becoming technologically obsolete next year, as is the case when they buy into obsolete technology. The gold Apple Watch Edition–which is likely to be much more expensive than the standard Apple Watch–is a tough sell in this respect.

Fitbit will feel the heat more, but should still carve out a place in the activity tracker market. Its devices are less than a third of the price of Apple’s entry-level watch. Fitbits are also a less flashy statement on the wrist, which will suit many. This understatement is carried through to its UI, in what its designer Gadi Amit calls an “introverted” approach to interaction, in contrast to Apple’s prominent Activity app.

That said, it’s early days for Apple’s watch. The firm’s recent hires from the fashion industry and its formidable marketing machine should not be underestimated. But for the time being, Rolex and Fitbit are most definitely not f**ked.