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Even rivals are waiting for Apple to get into wearables

Gregg Keizer | Aug. 21, 2014
Market not worth spit; much less the time and money unless someone transforms the category, argues analyst

Dawson cited the iPhone as an example. On the one hand, Apple essentially built the smartphone market, as we know it now anyway, giving now-rivals like Samsung an opportunity. On the other hand, because the iPhone was radically different — largely because it was touch-based — it took competitors a long time to replicate the iPhone.

"When the iPhone launched, it was very different from anything prior," Dawson contended (emphasis in original). "So it took a long time for Android [and Android phone OEMs] to even vaguely match it. But the iPad was basically a big iPhone, so you just stretched your smartphone and you had an iPad competitor."

Dawson expected that the situation for Apple's rivals, again assuming that the Cupertino, Calif. company hits the "reset" button for the market, would be more like the iPhone than the iPad. "I may have a product that matches [Apple's wearable(s)] on paper, but do I have a product that performs as well in fact?" asked Dawson. "It could be several years before others are truly competitive, even if within a year their wearables look similar on paper."

Cupertino...the world's R&D?
Some smartphone vendors have been raked over the coals for allegedly copying Apple's iPhone and iPad — the most recent allegations have been aimed at China's Xiaomi — and the same charges will probably be leveled at rivals that try to capitalize on Apple's entry in wearables.

Do others, then, simply use Apple has a free R&D arm?

"In a matter of speaking, I'd say 'yes,'" said Dawson. "The fast-follower thing has worked for smartphones."

Although that must irk Apple — it certainly did that, and more, for former-CEO Steve Jobs — Apple also gets something out the deal: The top of the market pile, at least for a time.

And that position, as Apple has found out, can be very lucrative. In the first three years of the iPad, for example, Apple recorded revenue of $67.7 billion.

"Apple's role in this market is hard to overstate," Dawson concluded in his written report. "If it enters sooner rather than later, we believe it will have a significant impact both on the smartwatch market and on Apple."

Dawson's report is available on the Jackdaw Research website to paying customers.


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