New Markets and Early Profits

Everyone is worried about how many new Watches Apple will sell. But the Apple Watch is a new market product. See post titled "Apple Watch and New Market Disruption." If you believe in disruption theory, that means the more relevant question is whether the Apple Watch will be profitable early. Christensen counsels new market entrants to be impatient for profit and patient for sales. See Concepts page and discussion of Clayton Christensen.

To produce enough sales to generate early profits, Apple must compete against non-consumption, convincing people who've never worn or used a computer on their wrist before to buy an Apple Watch. After establishing early profits Apple can move up the sustaining improvement trajectory, growing sales over time. Id.

In persuading non-consumers, the key factor is whether the Apple Watch accomplishes important jobs-to-be-done that current products -- like smartphones -- aren't already accomplishing. Id. Functional jobs-to-be-done for the Apple Watch might include:

(1) discreetly/conveniently checking or answering a phone call, email, or text without fishing for a smartphone;

(2) discreetly/conveniently checking the time, calender, reminders, stock data, news, health data, etc., without fishing for a smartphone;

(3) quickly/conveniently dictating a note or to-do item without fishing for a smartphone;

(4) quickly/conveniently accessing Siri for directions or search answers without fishing for a smartphone;

(5) using Apple Watch and Apple Pay to quickly and conveniently pay for things; and

(6) using Siri, voice commands, and/or the Apple Watch screen to quickly and conveniently control the "Internet of Things," which includes:

  • Apple TV;
  • music on a smartphone or music system; and
  • other commonly used devices/appliances (thermostats, door locks, garage door openers, etc.).

This last job-to-be-done could be the most compelling -- the Apple Watch could ultimately become the "universal remote" for everything in your life.

The common theme of this list is more convenient, more discreet access to things that otherwise require the use of a smartphone or separate device. For women who keep their smartphone in a purse, this may be a bigger deal than people realize.

And this list doesn't capture two other big jobs the Apple Watch hopefully performs: (1) it communicates status; and (2) it enhances well-being through an aesthetically pleasing design (an element of usefulness for products used every day, per Dieter Rams). See post titled "Product Aesthetics and Jobs-to-be-Done." If the Apple Watch fails to satisfy important functional jobs (like those six detailed above), it may actually reduce status by making the user look frivolous. Time will tell.

The author owns stock shares of Apple.