It was no coincidence that I shared the framework I use to evaluate new platforms at the same time as the Apple Watch was announced last month. My intent was to set the wheels in motion and ask the question that product teams, CEOs and VCs are now facing on the eve of its availability: What version of the Apple Watch should I get? Should we prioritize building an Apple Watch app?
My informed answer is yes.
How did I get informed? First was through holding the Apple Watch and experimenting with the UX in a private demo. I was further influenced by discussing a friend’s perspective after he wore the Watch daily for a few weeks, and hearing how it changed his behavior in a short time. Apple is going to sell a lot of watches and people are going to enjoy using them.
Let’s revisit my platform analysis framework question by question to show why I think prioritizing the Apple Watch platform is a good bet:
1. Technology enablement – Can something be done that wasn’t possible or easy to do before?
The Apple Watch enables app developers to do many things that have not been possible before such as:
- New user interface design surface area via Glances, Apps & Notifications
- New user input devices via Force Touch and Digital Crown
- New user feedback methods via the Taptic Engine
- New fitness related sensors and data such as a user’s heart rate
- New communication methods such as sketch, tap, and 3D emoji
Of course the unanswerable question is what “job needs to be done” with these new capabilities. The most obvious is rethinking notification experiences for current iOS applications from the ground up. But here’s the truth: we can’t predict the most valuable use cases. We can only predict, as was the case with the iPhone and iPad, that developers will invent great stuff like Uber, Whatsapp, and Roll. It will be exciting to see how developers use the Apple Watch technology building blocks to craft new experiences that weren’t possible before.
2. Distribution – How does the platform help you gain new users and engage existing users?
The Apple Watch is garnering the strongest cross promotion of any new hardware product line that I have seen. Further compounding Apple’s own cross promotion of the Watch is the collective media, pundit, and technology interest that will result in even more exposure for early apps. Thus, breakout apps on the Apple Watch should benefit from the “rich getting richer” flywheel for this early time of the Apple Watch’s lifespan. Based on the high number of people pre-ordering the Apple Watch, this new channel will be constrained only by supply and not demand.
Further, it is worth understanding how the Apple Watch captures a user’s daily attention is tied to the notion of distribution. This is a valuable asset given it is one of the few “fixed resources” in a digital world. There will likely be a vigorous debate about how much and how fast the Apple Watch can capture attention. However, my expectation is that it will be a healthy amount within the first year of launch in aggregate and on a per Watch basis. Thus the developers that can grab as much of this new attention surface area will create meaningful enterprise value.
A somewhat crass but perhaps more apt assessment of the tactical distribution value is that Apple Watch has a new advertising unit for any iOS developer and it is called WatchKit. The cost per install or registered user is unclear, however, the cost per impression is going to be the cheapest on iOS bar none.
3. Business model – Does the platform provider have a clear business model that you can align with to sustainably share in the value created?
This one is easy. Apple makes lots of money by selling hardware at ridiculously good margins. Developers of software apps for mainstream consumer scenarios are incredibly well aligned with their business model because, as a platform provider, Apple needs developers to build killer apps to help sell their hardware.
Any developer looking for an outsized growth opportunity should be prioritizing an Apple Watch app right now. It’s a rare and unique opportunity where success will be determined by those building early great apps in a valuable vertical. Of course, capitalism and market dynamics mean that few developers who will get this right early will capture the lion’s share of value.
I can’t wait to see what gets built.