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Would Dick Tracy Buy the Apple Watch?

Apple's much-anticipated launch event yesterday "sucked the air out of the room" during the opening keynote session at the annual Tableau Customer conference, taking place in Seattle, as my friend Ellis Booker remarked on Facebook yesterday.

Regardless how you view Apple, the launch of its larger iPhone 6 and 6 Plus models, along with the new payment service and smartwatch, were hard to ignore. Positioned as an event on par with the launch of the original Macintosh 30 years ago, the iPod, iPhone and iPad, the new Apple Watch and Apple Pay made for the largest launch event the company has staged in over four years. It was arguably the largest number of new products showcased at a single Apple launch event. Despite all the hype, it remains to be seen if it will be remembered as disruptive as Apple's prior launches. Yet given its history, I wouldn't quickly dismiss the potential in what Apple announced yesterday.

The Apple Watch was the icing on the cake for many fans looking for the company to show it can create new markets. But critics were quickly disappointed when they learned the new Apple Watch would only work if linked it to your new iPhone (or last year's iPhone 5s). Many were surprised to learn that it will be some time before the component circuitry for providing all of the communications functionality of a phone or tablet can be miniaturized for a watch.

This is not dissimilar to other smartwatches on the market. But this technology is not yet the smartwatch Dick Tracy would get excited about. No one knows if the Apple Watch (or any smartwatch) will be the next revolution in mobile computing or if it will be a flop. And even if it is the next big thing, it isn't a given that Apple, or any other player, will own the market.

Yet Apple does deserve some benefit of the doubt. Remember when the first iPod came out and it only worked with a Mac? Once Apple added Windows compatibility, everything changed. Likewise when the first iPhone came out in 2007, it carried a carrier-subsidized price tag of $599. After few sold, Apple quickly reduced them to $399. But it wasn't until later when the company offered $199 iPhones did the smartphone market take off.  It's reasonable to expect there will be affordable smartwatches if it does become a mass market. I'd think the sweet spot will be under $150, but who knows for sure.

While Apple was expected to introduce a watch, the variety of watches it will offer was surprising. Those pining for an Apple Watch will have to wait until early next year but it's hard to see these flying off the shelves in their current iteration. I am less certain Apple will open up its watch to communicate with Android and Windows Phones, though that would open the market for its new devices just as adding Windows support to its iPods did.

Still, it's looking more likely that those with Android and Windows Phones will choose watches running on the same platforms. Indeed there are a number of Android-based alternatives such as the new Android-based Moto 360 for $249 and the Motorola Mobility LG G Watch, available now for $179 in the Google Play store. They too require connectivity to an Android Phone.

For its part, Microsoft is planning its own smartwatch with a thin form factor resembling many of the fitness-oriented watches. It will have 11 sensors and will be cross platform, according to a Tom's Hardware report.

As I noted, the Apple Watch was icing on an event intended to announce the pending ability of two the new iPhones. Arriving as expected, one measures 4.7 inches and the other is a 5.5-inch phablet that is almost the size of an iPad mini. They're poised to appeal to those who want something like Samsung's large Galaxy line of phones but aren't enamored by Android. The new iPhones will also put pressure on Microsoft to promote its large 6-inch Nokia Lumia 1520, which sports a 20 MP camera and a 1920x1080 display. Though Apple says its camera only has 8 megapixels, the company emphasized a new burst mode (60 fps) that can intelligently pull the best photo in a series of images. The new iPhone 6 Plus also has a 1920x1080 display and starts at $299 for a 16GB model (the standard iPhone 6 is still $199).

Besides some other incremental improvements in the new iPhones, perhaps the most notable new capability will be their support for the company's new Apple Pay service. This new capability will allow individuals to make payments at supporting merchants by using the phone's fingerprint recognition interface called Touch ID, which accesses a NFC chip on the phone that stores encrypted credit card and shipping information.

If Apple (and ultimately all smartphone suppliers) can convince customers and merchants that this is a more secure way of handling payments than traditional credit cards, we could see the dawn of a new era in how transactions are made. A number of high-profile breaches including this week's acknowledgment by Home Depot that its payment systems were compromised, could, over the long run, hasten demand for this technology if it's proven to be more secure. Of course, Apple has to convince sceptics that last week's iCloud breach was an isolated incident.

Regardless of your platform preference or if you use best of breed, we now have a better picture of Apple's next generation of wares. We can expect to hear what's in the pipeline for the iPad in the next month or two. Reports suggest a larger one is in the works.

Posted by Jeffrey Schwartz on 09/10/2014 at 12:07 PM


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