In today's Finshots we talk about smartwatches, wireless earphones and Apple's place in all of this.
Wearables have changed the way we interact with technology. Fitness trackers, smartwatches, wireless headphones — These were items that were once fashionable only among a select group of people. Today, however, they have gained mainstream acceptance. And for tech companies, this is a moment of reckoning. Because “wearables” isn’t just a fringe domain anymore. It’s a multi-billion dollar industry rife for disruption.
Think about it — There was a time when smartphones made all the money. But today, they’re just commodities. You can’t tell one phone from another. And the market seems to be saturating. But people are only just getting into wearables and that means the growth potential is huge right now.
However, one company seems to be dominating everyone else. And it’s the usual suspect — Apple.
Apple is miles ahead of everyone else. So far in the first quarter of 2021, Apple has had a global market share of 28.8% followed by Samsung which only has an 11% share to its name. Then we have Xiaomi with 9.7%, Huawei with 8.2% and finally, India’s BoAt makes an appearance with a respectable 2.9% market share.
In fact, some estimates suggest that the wearables segment at Apple alone could be worth a mammoth $30 billion. If this division was spun off as a different entity, it would feature amongst the Fortune 100 companies. And it’s not like this happened overnight. This, ladies and gentlemen, is a result of careful planning and an unparalleled understanding of human psychology.
Unlike phones, wearables have to be worn. And people must crave to show them off. It’s a style statement, and if you can’t fashion something that fits this criterion, then that’s a no-go. Apple has nailed this aspect. When Apple introduced the Apple Watch, there was considerable scepticism about the utility of such a product. Some critics even lambasted the first generation for being a let-down.
But ask yourself this — Why do people wear a watch in the first place?
It’s an accessory that boosts your style quotient. Sure, it also helps you keep time. But watches — They enhance appearance. They are no longer just functional products. They have transcended their utility. So the Apple Watch never had to be functionally superior. It simply had to be aesthetically pleasing. Which it was! In fact, Apple wasn’t even competing with other smartwatch manufacturers. They were competing with watchmakers, period. And today they sell more watches than the entire Swiss watch industry combined.
The product itself meanwhile is no slouch either. It has a whole bunch of nifty features and it pairs with other Apple products rather seamlessly. And this ability to integrate wearables with their massive product ecosystem offers them an extra edge. In fact, this integration aspect goes beyond just Apple products. These guys have the leverage to seamlessly integrate with multiple product partners out there.
Yeah, not many people can say no to Apple, can they?
And the Watch is just one product within the company’s stable. You also have the ultra-popular AirPods — wireless earphones that have caught the world by storm. Unlike the Apple Watch, which struggled to claim mainstream acceptance in the early days, AirPods were a runaway success from the get-go. For Millennials and Gen-Z, this was a status symbol like no other. And while it did have its fair share of detractors, AirPods changed the game altogether. Headphone jacks are now facing an existential crisis like never before and all of Apple’s competitors are introducing earphones that look and feel pretty similar to AirPods.
Bottom line — Apple has nailed the hardware game once again. And if they keep this up, they’ll continue to dominate another multi-billion industry, once again.