He named Apple as one company, but not the only one, that could do either, or both. Dawson's basis for that thinking: Apple's proven ability to enter an existing market, then dramatically change expectations to the point where it creates a viable market. Whether with 2001's iPod, 2007's iPhone or 2010's iPad, Apple, Dawson maintained, is the only technology company that could boast a track record in transforming an extant market.
"If Apple does enter the wearables market, it will do the same [as in the MP3, smartphone and tablet markets]," Dawson said. "Given [that], we believe this will have to be done by reinventing the smartwatch category in some way."
The most popular use of notifications on smartphones is for text message alerts; the same is likely the case for the current crop of smartwatches. (Image: Jackdaw Research.)
Dawson didn't have any special insights into what Apple might do in wearables/smartwatches — rumors, circulating for ages, have intensified in 2014, with most Wall Street and industry analysts now believing Apple's entry is inevitable — but he had some thoughts on what would happen if Apple did do as he predicted.
If Apple can reinvent the category as it has in the past, Dawson believed that it would kick off demand for wearables overall, just as it did with smartphones, and to a lesser extent, music players and tablets. "A rising tide floats all boats," Dawson said in an interview today.
That's not guaranteed, of course: It depends on what Apple ships. "If it's close enough to the current category, what Apple offers could prompt people without an iPhone to buy one. In that sense, if it does enter with a traditional smartwatch, there could be a halo effect," said Dawson, talking about iPhone sales.
He assumed that if Apple stuck to the current smartwatch model, but was somehow able to hurdle a host of technological challenges — ranging from a thin, fashion-sense design to a long battery life — it would both garner sales of the device(s) and boost those of the iPhone.
Such a strategy would not dramatically transform the category, however, and would not put much if any distance between Apple's offering and those from already-in-the-market makers, like Samsung or Pebble, or Motorola's Moto 360, which relies on Android Wear, Google's wearables OS. Fast-following, then, would be a distinct possibility.
But if Apple really leapfrogged the competition with something completely different, then bets are off. "Depending on what Apple launches, and the amount of innovation [in it], will drive how quickly others can copy it," said Dawson in the interview.
If Apple's able to reinvent the category, it "may take quite a while for others to catch up," Dawson continued. "The more different it is, the harder that's going to be."
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