Apple’s Time Flies event on September 15 was the launchpad for multiple devices, including two iPads, two smartwatches, a new processor and a new Apple One services suite. Amongst all the announcements, the Apple Watch SE - a lower priced smartwatch - is the one that is poised to be the most significant device for Apple in 2020, well into 2021.
But, why did Apple feel the need to launch a cheaper version of its watch, when they were already dominating the smartwatch segment? The answer is that even though Apple owns the majority of market share in this segment, it is facing stiff competition. In Q1 2020, Apple Watch lost 10% of its market share as per Canalys report to the competition. This drop in the market share could be attributed to multiple reasons, including cheaper smartwatches, the fact that Apple Watch cannot be used with Android devices, better health features from the competition, among others.
Huawei, Samsung and Garmin launched multiple smartwatch options while Apple continued with two options with the Series 5 and Series 3 smartwatch. While these three brands pushed Apple on the pricing, Fitbit offered competition on the health features. Thanks to its focus on health, Fitbit has a dedicated fan following just like Apple Watch, even when its products are priced higher than competing brands. Also,
Google acquired Fitbit recently and integrated its services on to Fitbit devices. While Google still sticks to Wear OS for smartwatches, the Fitbit acquisition means that Google will sooner or later use the Fitbit brand to gain market share in the smartwatch segment. By next year, we also might see a Google Smartwatch powered by a new version of Wear OS that offers the best of Fitbit features along with Wear OS’s versatility, and that would further be trouble for Apple.
Fitbit’s latest offering, the all-new health focussed smartwatch, Fitbit Sense, which was announced last month is priced at Rs 34,999 - well below the Apple Series 5 watch, which starts at Rs 40,900. Fitbit Sense boasts of features like ECG, EDA to manage stress and skin temperature that give it the edge of health features compared to Apple. Keep in mind that Fitbit also offers its Versa range of smartwatch, which offers similar features and looks as stylish as the Apple Watch at almost half the price.
All of these things combined could have pushed Apple into a tough spot for market share. Apple already had seen the same happen with its iPhone’s when they moved to premium pricing after the Apple iPhone X. However, to gain its market share back, Apple employed the tactic of launching a smartly priced smartphone with the iPhone XR and followed it up with the iPhone 11. Both the iPhone XR and iPhone 11 were amongst the top-selling smartphones across various regions in 2019. So in 2020, Apple decided to employ the same strategy for its smartwatch business.
With one swift product launch; an Apple smartwatch starting at Rs 29,900 that looks the same as its Series 6 watch, Apple is set to gain back its lost market share. The Apple Watch SE offers a majority of the health features, including the much-praised fall detection mode, which makes it stand neck to neck with the competition.
Consumers already expect that they have to pay a premium for Apple devices over the competition but at Rs 29,900, the Apple Watch SE works out to be priced just right for Apple fanboys, existing users who want to upgrade from older Apple Watch 1,2 or 3 series without paying a lot more as well as new users who want to get on board the Apple Ecosystem. Killing two birds with one stone, the Apple Watch SE will not only help Apple gain a big chunk of the market share, but it would make the Fitbit Sense look expensive, thereby taking care of the immediate threat facing Apple’s smartwatch business.
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