Apple Shifts Focus to Fitness With Latest Watch
September 11 2016 - 9:30PM
Dow Jones News
When Apple Inc. Chief Executive Tim Cook introduced the Apple
Watch two years ago, he touted its many abilities, including to
display email, a calendar, the weather and to make phone calls.
Mr. Cook also described the watch's health features. But when
Apple unveiled an updated model last week, however, the focus was
clearly on sports and fitness. "We think Apple Watch is the
ultimate device for a healthy life," said Jeff Williams, Apple's
chief operating officer.
The evolving presentations underscore a shift in Apple's
marketing focus for the watch, from a stylish jack-of-all-trades
fashion accessory to a personal trainer.
Apple designed the new version, called Series 2, to be water
resistant to a depth of 50 meters, thanks to a custom-designed
speaker system that flushes out water after a swim. Apple also
touted a partnership with Nike Inc. to market sports-themed watches
along with GPS capability that helps the device track hikes, runs
and bicycle rides.
Analysts estimate that Apple sold about 12 million watches in
the year following its April 2015 launch, but the product hasn't
proved to be a breakout hit like the iPhone; Apple has sold more
than one billion iPhones over the past nine years. One rumored
feature Apple didn't add to the watch: a cellular connection, so
the watch can handle calls independent of an iPhone.
"They're still missing out on a central purpose, but they're
inching toward a device that does fitness and health quite well,"
said J.P. Gownder, an analyst with Forrester Research Inc.
Apple still considers the Watch a multipurpose digital
accessory. Pacific Crest Securities analyst Brad Erickson agrees.
"If you're Apple, your broader purpose is to use your devices and
your ecosystem to provide more utility to your user base and enrich
that experience," he said.
Still, Mr. Erickson said the new Apple Watch could cut into
sales of fitness-focused devices from companies such as Garmin Ltd.
and Fitbit Inc.
Amy Nouri, a Garmin spokeswoman, said the Apple Watch will
introduce more consumers to the types of products it makes. "It's
exciting that Apple is coming out with watches like this," she
said. "It really legitimizes the wearable space."
"We believe there's plenty of room in the category given the
significant growth it is experiencing," a Fitbit spokesman
said.
A significant part of the Apple Watch's sporty push comes via
the Nike deal. A new version of the watch, the Apple Watch Nike+,
comes equipped with the latest Nike+ running app and Nike-inspired
watch faces and bands.
Despite the prominent Nike branding on the watch, it isn't clear
if it will help the world's largest sportswear maker gain share in
the competitive fitness-tracker app marketplace.
Nike has focused on developing software since abandoning
production of its own wearable fitness devices, including its
short-lived FuelBand, in 2014. The latest edition of its Nike+ app,
released this summer, combines elements of fitness tips and
motivation with a customized marketplace, aimed at increasing
direct sales of the company's apparel and shoes.
But Apple Watch users will also be able to download apps from
Nike competitors, including Under Armour Inc. and closely held
Strava Inc.
San Francisco-based Strava offers GPS-enabled fitness tracking
largely for runners and cyclists and counts its membership in the
tens of millions, according to a spokesman.
Since 2013, Under Armour has spent more than $700 million to
acquire a suite of fitness apps and counted more than 175 million
registered users as of July. The newest Apple watches, including
the Nike branded edition, will be compatible with Under Armour's UA
Record and MapMyRun apps, according to a spokeswoman.
In a statement, Nike said the co-branded version of the watch
will feature its logo and that some functions, including directing
Apple's Siri voice command to begin workouts, will sync only with
Nike's running app.
"Apple and Nike both share a passion to make life easier and
more fun for our consumers," the company said.
Write to Robert McMillan at Robert.Mcmillan@wsj.com and Sara
Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
September 11, 2016 21:15 ET (01:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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