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Apple Watch's slow-burning success shows there is life after the iPhone

Apple Watch
The device has gradually added new capabilities, making it a much more compelling product Credit: AP

Tim Cook is not prone to outbursts of raw emotion, at least in public. But one of the few times he has come close occurred five years ago this week, when he unveiled Apple’s long-awaited smartwatch to the world.

It was three years into his premiership, and in that time Apple had released no magic product to match the iPhone, iPod or iPad that Steve Jobs had masterminded. 

The fabled “iWatch” was the first to be developed in the post-Jobs era and as a result, was the subject of intense interest from investors as well as customers.

So when it was finally announced, Cook allowed himself some catharsis, punching the air triumphantly as he strode on stage, his sleeves rolled up to display the device on his wrist.

That triumph, as it turned out, was premature. It was not until the following year that the Apple Watch was actually released, and when it was, initial sales were meagre compared to analysts’ forecasts, even allowing for the fact that the iPhone’s success had created impossibly-high expectations.

Last week I rewatched the device’s 2014 unveiling online, and it was striking at how Apple, a company that prides itself on a telepathic alignment with its customers, was so wrong about how its new invention would actually be used. 

Executives demonstrated hotel doors being unlocked using the Watch, friends scribbling each other finger-drawn messages on its tiny screen, and showed how a Twitter app could scroll through posts one-by-one. None of these features have caught on (Twitter abandoned its official Apple Watch app in 2017).

In a doomed attempt to appeal to Rolex buyers, Apple released 18-carat gold versions costing more than £10,000 and gifted them to fashion icons like Karl Lagerfeld, in what always seemed like a stunt than a real sales strategy.

At the beginning, it was hard to say what the Apple Watch was for, and it was unclear that even Apple’s own bosses knew. Internally, executives are said to have been unsure whether to pitch it as a fashion accessory or a utilitarian fitness device, and ended in a hazy middle.

Within a year of its release, obituaries were being written for the Apple Watch. In one dismal quarter, sales fell 70pc.

New gadgets rarely come out of the gates fully formed; technology is an iterative process. The problem for Cook was that the company’s previous products had delighted instantly. The appeal of the iPod and iPhone were obvious as soon as they were touched.

The Watch, by contrast, has been that rare thing for Apple: a slow burner. Unlike its predecessors, which were close to the finished item when launched, the original Apple Watch felt like a prototype, one that has since developed it out in the open.

More recent versions have dramatically improved. Apple has dispensed with any pretence of the Watch being a luxury good, and stopped attempting to squeeze aspects of the iPhone onto its small screen. 

Instead it has doubled down on the device’s fitness and health potential, adding features such as GPS tracking and waterproofing

Last year’s model was the biggest leap into health yet, including an electrocardiogram that could accurately measure heart irregularities, and a fall detection system

A new version of the Watch’s software due to be unveiled this week is expected to include sleep monitoring and fertility tracking capabilities, and glucose and blood pressure monitoring have been suggested as future options.

For tech followers, new versions of the Apple Watch have now become far more interesting than the iPhone, whose upgrades have stalled in recent years. And although the iPhone sells in much greater numbers, its sales are in decline while those of the wearable are increasing.

Apple does not reveal how many watches it sells, but analysts at IDC put it at 23.3m last year, up from 17.7m the previous year. This year it has sold around one for every six iPhones.

Sales from Apple’s wearables division, made up of the Watch as well as its AirPod headphones, were above $5bn in the last quarter, and are now higher than the iPod at its peak. They still pale in comparison to the iPhone, but have exceeded sales of the iPad and seem destined to surpass its Mac computers too. 

And while the iPhone was swiftly imitated, no other major electronics company has been able to successfully repeat the Apple Watch’s success. Shares in Fitbit are trading at all-time lows, and smartwatches from Samsung sell in much lower numbers. 

From Apple’s perspective, the Watch has the added bonus of being incompatible with handsets other than the iPhone, protecting consumers from switching to rival devices amid criticism that the iPhone is no longer adding exciting new features.

The Apple Watch, then, serves as a microcosm of Cook’s Apple: less immediately exciting, iterative, but quietly successful. It could well be a blueprint for future products the company expects to launch, such as a set of augmented reality glasses that project holograms into a wearer’s vision, slated for release as early as next year.

No product was ever going to match the iPhone, which made Apple the world’s most profitable company and defined a decade. But the Apple Watch has certainly not been the failure it was once labelled.

Are you an Apple Watch fan? How does it compare to the rest of Apple's products? Share your thoughts in the comments section below.