Should You Consider Upgrading to the New Apple Series 3 Watch?
Apple’s smartwatch hasn’t exactly blown away the competition in the market for wearable smart gadgets, but its appeal is growing for some specific users. And it may get even more useful for them after Apple’s expected unveiling of its latest watch model, the Series 3, on Tuesday.
The original Apple Watch, which the company announced three years ago, wasn’t exactly a dud, but it never became the breakout hit that many had predicted. More basic fitness trackers from the likes of Fitbit and Jawbone sold better. So last year, in its second Watch, the Series 2, Apple doubled down on exercise and sports features. With GPS and tracking of more kinds of exercise routines, sales jumped, with Tim Cook bragging about a 50% increase during his company’s quarterly earnings call last month.
Now the watch is about to get even more useful for fitness fiends and athletes. That’s because the widely rumored big new feature Apple is adding is cellular connectivity. With its own mobile connection, most of the watch’s features will work even when their owners aren’t carrying their iPhones.
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That’s not all that appealing to most people, who still carry their phone with them just about everywhere they go, especially if the cellular connection comes with the trade off of lower battery life. But runners, bikers, and other fitness aficionados are more interested in going phone-free, analysts said. Owners will still likely need an iPhone to set up the watch, add new apps, and for some other functions.
“Running with a phone, especially an expensive and fragile one, is always a pain point,” says Neil Shah, partner at Counterpoint Research, who also notes that screen sizes are getting larger on many new phones, making them even more unwieldy. Giving the watch its own mobile connection addresses “a big pain point Apple can solve,” Shah says.
The newly-freed Apple Watch may also be an appealing combination with other Apple products, like the company’s wireless headphones and streaming music service. “This standalone Apple Watch plus Apple Music plus Airpods would be a killer combo for Apple loyalists,” Shah says.
The mobile connection gives Apple Watch a step up on the just-announced Fitbit (FIT) smartwatch, called Ionic, too. Coming from the opposite end of the market as Apple, Fitbit is trying to add smartwatch features, like apps and mobile payments, to its line of more basic trackers. The Ionic has GPS but can’t stream music directly from the Internet. It still needs a nearby smartphone or PC to load music. On the other hand, the Ionic’s battery lasts for four days or more and the device has a sophisticated sleep tracking app that Apple currently lacks.
Apple is also expected to price its new watch with cellular connectivity at a premium—probably more than $450, according to analysts, compared to the current Apple Watch Series 2, which starts at $369 (the older Series 1 is still on sale starting at $269). The new Ionic will sell for just $300. And wireless carriers typically charge another $5 or $10 a month for smartwatch mobile service.
Most new watches from rivals also lack mobile connectivity. Fashion brands like DKNY, Armani, and Michael Kors released new luxury smartwatches running Google’s (GOOGL) Android Wear software this year. But the emphasis is on attractive design and fashion over connectivity.
And cellular connectivity alone will only make the new Apple watch marginally more attractive, says Jan Dawson, chief analyst at Jackdaw Research. Apple will also add the “usual” speed and power improvements and maybe some new types of sensors, Dawson says. Perhaps more significantly, Apple also likely will offer last year’s models at cut-rate prices, which could help expand the company’s (AAPL) market share further.
“I also expect the prices on last year’s models to drop and thereby grow the addressable market some more, all of which should help keep sales ticking over nicely,” Dawson says. “I don’t foresee massive growth in sales, but we could certainly see the recent decent growth continue.”