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Is There a Case for an iWatch?

Some potential Apple products are thought of as inevitable. Despite the lack of evidence of an Apple TV set, you may feel it will arrive one of these days simply because Steve Jobs developed some sort of amazing user interface that would, I suppose, revolutionize the living room. But remember that he didn’t actually say it would appear on a set rather than some other product.

Now there is no similar eureka moment for an Apple wearable device, which most call the iWatch. Such a beast continues to be viewed in the context of existing so-called smartwatches, meaning a watch with a squarish or rectangular LCD display, and a band. Period. Existing products, such as the Pebble, are considered today’s trendsetters for such gear, and other smartwatches appear to follow in its footsteps.

Now at $150, the Pebble would seem to be a pretty good deal. But it doesn’t work in a vacuum. For it to do its thing, you’ll have to mate it with your iOS or Android gear via Bluetooth. So it’s not a standalone device, but a wearable accessory offering a handful of basic functions. So if you’re busy and can’t fetch your smartphone from pocket or purse, the Pebble will alert you of important emails and text messages. You get a call, you’ll see the caller’s name on the Pebble’s 1.26-inch display. There will also be readouts for exercise and such, and there’s apparently a growing app ecosystem for the device.

When it comes to notifications, I can see the logic in a Pebble. If you’re at a business meeting, or watching a movie, it would be downright rude to take out your smartphone. But wearing a watch is perfectly normal, so if you see a tiny notice about something that requires a quick response, you can opt to walk towards the concession stand to follow up, or just ignore it.

I suppose, as accessories go, a smartwatch seems perfectly useful, although it’s far from what anyone would call a mass market success. So as of July 4, 2013, some 85,000 Pebbles have been sold. The pricy Samsung Galaxy Gear smartwatch may have done better, but it didn’t set the world afire either. The Pebble’s sales level is small potatoes for Apple, so the question is whether there is any potential.

Now when it comes to music players, none succeeded until the iPad, so is the iWatch capable of that level of success?

One obstacle is that many of you don’t wear watches anymore. You rely on your smartphones or another gadget with which to check the time, or you just don’t bother. I suppose I’m an old timer, since I’ve worn a watch since I was quite young, and I currently use a silver-colored Guess watch with a few additional buttons and doodads. It’s not so much a fashion accessory as a way to, well, keep track of the time.

If you’re going to consider a Pebble a standard-bearer, though, it has one fatal flaw, and that is its status as an accessory. Is that the approach Apple plans to take? Or would Apple consider making the mythical iWatch some sort of standalone device that combines a subset of smartphone functions, such as the ability to actually work as a phone, without requiring an iPhone or an iPad within Bluetooth range? Of course, with phone capability should come a Bluetooth headset. Maybe Dick Tracy didn’t mind bringing his watch to his face to talk to someone, but not in the real world.

Of course, packing the power of a smartphone into such a small form factor isn’t going to be cheap. Yes, Apple surely has the technology chops to make a great product that would blow away the competition and make smartwatches relevant.

But at what cost?

Right now, the cheapest iPhone, the 4s, is $450 unlocked. Compared to a full-fledged smartphone, an iWatch would be stripped down, and it’s a sure thing that a Retina display adds a healthy number to the manufacturing costs. So would Apple be able to deliver an iWatch for, say, $300 without a carrier contract? If so, wouldn’t that make it free with a contract? How can you argue with free?

Or would all that miniaturization make the first iWatch more expensive?

I would’t presume to want to do real estimates of manufacturing costs, or potential sales and profits. That’s Apple’s game, but you can rest assured there will not be an iWatch of any sort unless the numbers add up. There’s also that nagging question about demand. You know there would be a substantial built-in audience for an Apple TV set if it could be delivered at a price that represents only a slight premium over existing mid-priced units. The demand for a smartwatch has yet to be demonstrated.

You see, to a small company such as Pebble, selling 85,000 of anything has the potential of delivering decent profits. Apple needs to move tens of millions for an iWatch to leave hobby status and become a mainstream product.

Sure, early adopters would lap them up. Once initial demand is satisfied, can Apple deliver the proper combination of features, good looks and value to boost demand? And where would it come from? Would existing iPhone users get an iWatch as an accessory, or would it become Apple’s value smartphone for those who need to be notified of important messages, are concerned with physical fitness, or just need to make a few phone calls?

These are questions I wouldn’t presume to answer, although I wouldn’t say no if someone presented me with an iWatch that met the basic requirement of being capable of standalone operation. But I’m hardly a candidate for this sort of market research.