Today is the day that Apple fans have been waiting for -- launch day for the Apple Watch. For service providers, it's another example of where the world is headed in terms of understanding customers; monetizing unique services; managing IoT; and coping with increasing demands for bandwidth, agility and scalability.
The Apple Watch opens up a realm of possibilities when it comes to learning about customers, and what they do and want, which in turn equates to being able to monetize more services, says Tom Nolle, president of CIMI Corp., and regular contributor to The New IP. "Apple's Watch is significant because it could increase user reliance on mobile broadband services to augment the way they live in a direct way," he told The New IP in an email today.
In his first blog on The New IP, Nolle pointed to the Apple Watch as one indication of what lies ahead, in terms of business and market drivers for the New IP.
"Wearable tech and context are demand-side drivers of both SDN and NFV when we need those kinds of drivers very badly," he wrote. "If revolutionary technologies like SDN and NFV are applied only to our current services, there's little they can do other than make those services cheaper, and we're building new networks whose revenues and profits are destined to decline as our revolutions erode their price points. If we can build some kind of service that people will pay more to get, then we're investing with a positive expectation of return. That's the kind of investment that every network operator is eager to make, so it's a constructive mission for our two technology revolutions. That's what revolutions should be about." (See The iWatch, SDN, and NFV.)
On the network impact side, Heavy Reading Senior Analyst Steve Bell says the Apple Watch is not going to move the network needle initially due to questions around the price point (from $300 to $17,000), battery life and whether or not there is a "real need" for the watch.
Eventually he thinks the watch will connect into the Apple ecosystem and tie into Apple TV, Apple Home Kit and Apple Pay to facilitate a bigger ecosystem of things -- and that's when the network impact could kick in. "Initially it won't move the needle and there is not going to be vast amounts of data," said Bell. "To what extent it will impact other service providers depends on user behavior. It's got the potential if it achieves changing the user behavior with Apple Pay, Home Kit and Apple TV, but will it generate more traffic over cellular or wireline networks? I don't know."
To get an idea of where the smart watch market is today in terms of unit sales, see the chart below from Statistica, which said today that in 2014, 89 companies sold 6.8 million smartwatches across the world and the average price per watch worked out to be $189. Add to that list Apple, which analyst firm Strategy Analytics says will ship 15.4 million Apple Watch units in 2015 and take 54.8% of the market.
To put that in perspective, Apple sold 6 million iPhones in the first year it was launched, noted Bell. Put this all together and you could have the makings of a pretty big revolution if it does manage to change user behavior enough to "move the needle," as Bell says.
— Elizabeth Miller Coyne, Editor, The New IP
You will find more statistics at Statista