It's time to slow down the Apple Watch hype train

Over the past few months, we've seen a number of analysts predict how well the Apple Watch will sell, with some of the more optimistic takes claiming that Apple may sell upwards of 40 million units during the first 12 months of availability.

Many analysts and pundits contend that the Apple Watch will sell in high volume because, well, it's an Apple product. While Apple has certainly engendered an unparalleled level of brand cachet thanks to the success and ubiquity of the iPod, iPhone, and iPad, the Apple Watch is an entirely different type of product altogether. Which is to say, it's far too early for anyone to confidently predict that the Apple Watch will be a rousing success, let alone a game-changing product.

The Apple Watch is undoubtedly the most unique product Apple has ever come up with. Touted as the most technologically advanced product ever designed at 1 Infinite Loop, there's no question that early adopters will flock to the device, but whether or not it can become a mainstream hit remains open to debate.

Sure, it might be nice to receive texts and other types of notifications via the wrist, and maybe the ability to send your heartbeat to friends will take the world by storm, but a sharply defined use case for the Apple Watch that can justify lofty expectations remains elusive for the time being.

A dizzying array of unanswered questions

Despite an abundance of creative names to describe what the Apple Watch is, it remains, at the most basic level, a fashion accessory Apple hopes consumers will wear on their wrists every single day (after taking it off every single night to charge). This is a huge bet that can only pay off if Apple can successfully maneuver through a market in which it has little to no experience -- personal fashion.

What's more, the sheer number of unanswered questions which continue to surround the device renders optimistic sales estimates exceedingly premature. Most glaringly, we still have no idea what the pricing matrix across the various models will look like, aside from the $349 pricepoint for the entry level Sport models.

Taking an optimistic look at the impending Apple Watch release, the insightful Neil Cybart over at Above Avalon writes:

I disagree.

This may be how Apple might attempt to sell the Apple Watch, but I believe Apple will have a challenging time convincing users to shell out a few hundred dollars for a companion device that can perform a few nimble functions.

What's the key selling point? Bueller?

Customizable faces and bands are certainly cool, but are they cool to the tune of, say, a theoretical selling price of $550? Remember, the Apple Watch will not be a subsidized luxury item a'la the iPhone.​ And as opposed to a smartphone -- a device one arguably needs (or where the desire is so great as to effectively becomes a necessity) -- we haven't yet seen a killer use-case for the Apple Watch.

Moreover, many of the marketed features of the Apple Watch aren't exactly new. Smartwatches from a number of companies over the past few years have had the the ability to control music, measure a user's heart rate, track fitness metrics, and receive and respond to notifications. Now Apple does have a few tricks up its sleeve with Apple Pay integration, Apple Watch sketches, what seems to be an intuitive UI, and perhaps more importantly, an impending watch-based App Store.

But will this be enough for Apple to strike gold yet again?

I think it's a tossup. Who's to say if iPhone users are pining for wrist-based notifications or if third party developers will come up with novel apps that will really dial up the appeal of the device. Only time will tell, which is precisely why the Apple Watch rollout will be incredibly interesting to watch. Not since the release of the original iPhone have we seen an Apple product launch with such a bevy of unknown variables.

That said, there are no shortage of folks hyping up the appeal and potential impact of the Apple Watch.

To wit, an recent TechCrunch article detailing the history of the watch industry writes of the Apple Watch release:

This of course presupposes that teenagers, or adults for that matter, will be willing to shell out $500 in the first place for a device that essentially moves some iPhone-related functionality to the wrist.

Again, an overarching and marketable selling point for the device hasn't yet emerged, which is why many of the more optimistic views on the Apple Watch focus on otherwise mundane features such as sending voice memos, checking the weather, and using Passbook. At best, we're presented with mildly interesting features such as the ability to control music on your phone, viewing mapping directions, or using the Apple Watch to control the iPhone camera. Don't get me wrong; taken together, the laundry list of Apple Watch features makes for an intriguing product, but I still fail to see a key use-case that leads me to believe the Apple Watch will be a homerun right out of the gate.

Driving home the point that Apple still hasn't come up with a winning use-case with which to sell and market the device, it seems that Apple engineers themselves are still discovering novel ways the device can be used. Take a look at this quote from Jony Ive realyed during a talk held at the San Francisco Museum of Modern Art this past November.

Is Apple, as recently of November, still curiously trying to figure out what the device might do? And as for the subtle alarm, sure, that sounds cool, but aren't users supposed to be charging the device every night as opposed to wearing it?

Even the Apple Watch website is somewhat convoluted, perhaps itself the result of a lack of focus as to just why people should by the device.

Now compare that to one of Apple's early iPhone pages from 2007.

The iPhone is positioned as a forward-thinking device that does a few important things extremely well. On the other side of the coin, the Apple Watch is apparently being positioned as a device than can accomplish a myriad of non-important tasks.

The value proposition of the iPhone -- a widescreen iPod, the real Internet in your pocket! -- was so overwhelming that consumers were more than happy to overlook its shortcomings; 2G connectivity, no copy and paste, a mediocre camera, etc... The value proposition of the Apple Watch is less clear and it remains to be seen if consumers will be as willing to overlook its shortcomings; battery life, price, etc... The iPhone page above is simple, yet extremely informative. With just a glance consumers were able to recognize that the iPhone is a) a phone b) a widescreen iPod c) a web browsing device d) a place to take and store photos e) check the weather and stocks and much more.

Are people open to wearing watches again?

Price and functionality aside, Apple faces the arduous task of convincing potential consumers to adorn themselves with what effectively amounts to a piece of jewelry. It's a much easier sell than Google Glass, but a challenge nonetheless.

The popularity of watches amongst mainstream consumers has waned in recent years. It's not an overstatement to say that phones, going all the way back to early days of the flip phone, have all but made wristwatches nothing more than timepieces worn more for appearances and style than for function. In order for the Apple Watch to succeed, the Apple Watch will need to be compelling enough to convince users en masse to start wearing a watch.

Recent products from fitness-oriented brands like Jawbone or Fitbit demonstrate that owning the wrist, so to speak, can be accomplished. Still, purchasing a $99 Fitbit versus a theoretical $550 Apple Watch are completely two different things. Does the added functionality and aesthetic design of the Apple Watch justify a bump up in price of a few hundred dollars?

Style may ultimately be the key selling point of the Apple Watch

Now one thing Apple deserves an A+ for is that the watches themselves, as Cybart notes, look damn nice. And for all we know, the fact that Apple actually took the time to create elegant and alluring timepieces may be all the value proposition needed for Apple to have a huge hit on its hands.

As opposed to other smartwatch makers out there, Apple understands that wearing a watch is a personal fashion statement. A watch is effectively a piece of jewelry and there is no such thing as a one style fits all. To Apple's credit, Jony Ive and his team of designers put together an impressive selection of watches than span a multitude of styles.

Even traditional watch aficionados have heaped praise upon the design aesthetic of the Apple Watch lineup. Writing for Hodinkee, a popular wristwatch enthusiast website, Benjamin Clymer said the following in a widely circulated and comprehensive overview of the Apple Watch.

So at the very least, Apple Watch buyers will know they're getting a finely made timepiece.

Apple likely has realistic expectations itself

I believe that Apple appreciates the inherent challenges associated with launching a product like the Apple Watch. Further, I think Apple is well aware that Apple Watch sales may not take off like a rocketship at launch. After all, the Apple Watch can only function as a companion device to the iPhone. That right there, despite the tens of millions of iPhone toting users around the globe, immediately shrinks the potential pool of customers down considerably.

I don't believe Apple has any illusions about the first-generation Apple Watch representing a huge percentage of its quarterly revenue. Tellingly, Apple has no plans to break out Apple Watch unit sales as a separate item on its balance sheet. Rather, sales will be lumped together in an "other" category comprised of accessories like Beats headphones, iPods, and Apple TV units.

The upside (there is one!)

While I think initial Apple Watch sales may not be as high as some, one of the things I'm excited about is that the Apple Watch itself is a platform that will continue to grow and evolve. If Apple's iPhone lineup is any indication, there will be subsequent iterations and the Apple Watch will only get better as time goes on, i.e better battery life, GPS, more health-based wizardry.

Another point in Apple's favor is its lineup of retail stores. In the U.S today, there are 262 stores across 46 states (sorry Montana, Wyoming, West Virginia, Vermont, and the Dakotas). On average, there are approximately 21,900 visitors per store each and every week. Together, these stores will provide a familiar, comfortable, and inviting space for consumers to go and check out the Apple Watch. It's hard to overstate how much of an advantage this provides Apple. At the same time, it also raises a few questions.

Just how exactly will Apple let users see what the Apple Watch experience will be like? Again, the Apple Watch needs to be paired to an iPhone and a dedicated Apple Watch app which makes in-store demos somewhat tricky. Will the Apple Watch simply showcase a preroll demo? That seems weak. Somehow, someway, Apple will have to position the Apple Watch in such a way that users can fully appreciate and understand its full array of features. But how might this be accomplished when the full impact of the device requires a paired iPhone? This is a product launch that will really require Apple to pull out all of the stops, both monetarily and creatively. On top of this, Apple with the Apple Watch will need to deviate from its traditional consumer electronics marketing angle. Indeed, Apple will need to tweak its marketing with a fashion bent as well.

Realizing that the world of fashion was outside of its wheelhouse, Apple over the past 18 months has hired a who's who of executives from the world of luxury fashion, most notably former Yves Saint Laurent CEO Paul Deneve and former Burberry CEO Angela Ahrendts. Perhaps with their expertise, Apple can successfully bridge the gap between fashion and technology and come up with creative ways for users to appreciate these traditionally diametrically opposed facets the Apple Watch.

Apple Watch: more like the iPod than the iPad

Having said all that, I don't necessarily think the Apple Watch will be a dud. I just don't think we know enough yet to confidently assert it's going to do gangbusters. Again, this is precisely why I think the Apple Watch launch is going to be so exciting to keep tabs on. As opposed to a new iPhone or a new Macbook Air, we don't know yet how quickly people will take to the device. Will there be lines? Will supply outstrip demand? At least with the iPhone we can make informed guesses. The Apple Watch launch is a complete mystery.

One thing's for sure -- if any company can pull this off and get the masses excited about and interested in wearing watches, it's Apple. They have a passionate user base, a retail imprint unrivaled in the tech industry and, of course, a penchant for brilliantly fusing world class hardware with intuitive software. Still, if we take a step back from the hype train, I think it's more realistic to expect the Apple Watch sales trajectory to more closely mirror the iPod (which started out slow and steady) than that of the iPhone or iPad.