Jason Snell on Apple and Wearables

via John Gruber. Jason Snell:

Unfortunately, I fear that tech-industry observers have completely lost their perspective. As Rene has written, no matter how big the wearables market gets, it’s still not going to touch the smartphone market.

IDC reported that in 2013, one billion smartphones were shipped, up 38 percent from the previous year. That’s a fast-growing market worth hundreds of billions of dollars. Meanwhile, on Thursday IDC predicted that the wearables market will reach 112 million units in 2018.

In other words, in four years the wearables market might grow to be one-tenth the size of today’s smartphone market — in units shipped. Presumably the average selling price of wearable items will be a fraction of that of smartphones, meaning the dollar value of the wearables market is even more minuscule compared to the smartphone market.

I disagree. In terms of units, a more affordable — relative to the iPhone — iWatch can sell more. I don’t think Apple is making an iWatch like this, but let’s imagine the iWatch is a stripped down iPhone with about 60-80% of its capabilities. For those who don’t care to have a smartphone or wish they could go back to simpler days when you called and text’d and that was all you did an iWatch might be the solution. Of course instead of painstakingly texting on a numeric keypad you’d be talking to Siri to text on your iWatch. Just hope she is more understanding of languages other than properly spoken American English.

Instead of a partial replacement for the iPhone, if the iWatch is being developed as a complementary wearable device to the iPhone, it may never sell as many as the iPhone. But Apple might be designing the iWatch to be compatible with other smartphones. Apple has done this before: iTunes. If the iWatch is a watch you can use with any modern smartphone then the iWatch will most definitely sell more than the iPhone.

All of this is conjecture. I’ve authored plenty of reports with multi-year forecasts and let’s just say a forecast is merely an opinion, a scenario. Nothing more. So take IDC’s prediction with a grain of salt.