Sizzle/Fizzle

Watching The Watchers Of The Apple Watch Watch

If the Apple Watch was gaining momentum in the latest Apple earnings report, other ominous signs emerged this week that the wearables may have worn out their welcome. And in the meantime, there was good news about Brexit, bad news about Brexit and coffee to go, digitally done.

There are two sides to every story, and somewhere in there is the truth.

The ecosystem was treated to a tale of two Apple Watches this week — and one wonders where the truth is, here, too.

The first story was about the Apple Watch being a sizzle — a running theme throughout Apple’s latest earnings release.

“Apple Watch is the bestselling and most loved smartwatch in the world, and we hear wonderful stories from our customers about its impact on their fitness and health,” Tim Cook noted in his remarks to investors this week.

He also noted that sales of the Apple Watch — building on strong momentum out of the holiday quarter — had doubled over the same time last year. As seems to be de rigueur in these situations, he did not, however, assign a specific number to that doubling.

But when it comes to smartwatches, it seems that being the most loved in the world is not quite the distinction it may appear to be. Because, despite all the years of hype, most consumers haven’t found themselves overwhelmed with enthusiasm with the wearable so far.

As recently as last fall, Apple’s smartwatch sales were officially tanking — with IDC reporting a 51.3 percent decline in smartwatch shipments in Q3 2016 from Q4 2015. The situation improved some in Q4 — Apple released the Apple Watch 2 — and shipment volumes returned to growth territory.

But Neil Mawston, the executive director at research firm Strategy Analytics, noted that the growth recovery is slight, largely driven by seasonal demand and product launches, not an actual buck-up in consumer appreciation.

And a notable lack of customer appreciation is what brings us to our second tale of the Apple Watch this week: the other side of the story, which lands it in the Fizzle column this week. It seems that businesses are starting to decide that perhaps the Apple Watch isn’t really going to be the next big thing, after all, and are quietly pulling app support for the devices.

And were consumers enraged? Well, they might have been. If they had noticed.

The Purge — Apple Watch Edition

 Just as Apple was talking up the Apple Watch during this week’s earnings release, reports were emerging that all is not right in Apple Wearable Land.

Over the last few weeks, some pretty big name firms have decided to say sayonara to the Apple Watch App store.

Google Maps’ latest update to its iOS app no longer supports the Apple Watch, nor do the most recent iterations of eBay or Target apps.

Some of the removals may not be permanent. Google has released a statement noting: “We removed Apple Watch support from our latest iOS release but expect to support it again in the future.”

The future is a very long time.

Despite the vote of low confidence in the usefulness of developing for the product, Apple is pushing ahead with new features to make the wearable a bit more desirable. Potential upgrades could include a watch to determine when a consumer is driving based on motion detection, and then either prevent alerts completely or determine which alerts are important enough to receive while driving. That technology, it should be noted, has only recently had a patent filed for it and has only recently seen approval. Apple, like many companies, files many more patents than it actually develops.

But it seems that Apple ought to be developing something that gets users a bit more addicted to their watches. Because the most disturbing thing that happened to Apple this week isn’t that a lot of firms aren’t developing for their wearable anymore.

The most disturbing thing is that almost no users actually noticed that this event had happened.

Which begs another, perhaps even larger, question:

How many of those watches are still on wrists?

Sizzle

There are two sides to Brexit too, as we will see the Sizzle as well as the Fizzle.

Brexit and VC funding: If investing is a game that is best viewed through a “long” view rather than a “short” view, then venture capital is playing the long game when it comes to Brexit. VentureBeat has said that U.K. startups grabbed $1 billion in the first quarter of 2017, which is a pretty nifty sum when on the heels of Brexit, which took many by surprise and, in fact, is above the tally raised in each of the previous three quarters. The region ranks first in terms of capital flows in Europe, proving that innovation is top of mind for capitalists in general, beyond the vagaries of negotiating who, when, where and how much in the way of Brexit particulars.

Mobile Order-Ahead: Last week Waze debuted a deal with Dunkin’ Donuts that spotlighted the convergence of motoring while fueling via caffeine. The latest stats from Starbucks showed that the duality of coffee and mobile are healthy amid foot traffic as well. U.S. membership in its rewards program grew by 11 percent, mobile transactions were 29 percent of the tally and mobile order and pay were at 8 percent. Au Bon Pain is getting into the game, which shows that love of carbs and java, digitally enabled, knows no bounds. But the sizzle here could fizzle if the lines get long, as they did with Starbucks, indicating that technology adoption on occasion has growing pains. In fact, the trend is pervasive enough that we launched a Tracker designed solely to, well, track this.

Driverless Tech: The horseless and humanless carriage got a boost this week when Didi Chuxing grabbed $5.5 billion in funding, the biggest capital raise for a tech co. Initial indications are that the funding will go toward expansion beyond China and also for driverless technology. With $5 billion in incremental funding, that’s a lot of backing for automated autos.

Fizzle

Consumer Credit: Auto lending is showing signs of concern with higher delinquency rates and defaults. The same might be seen in the student loan market — where young people are struggling to pay them off. Capital One has posted its highest write offs in years, and Discover boosted its provisions for loan losses by 38 percent year over year. The consumer may be flagging, or showing hints of being about to flag.

Retail Bankruptcies: The writing has been on the wall, and now the writing is going on more and more bankruptcy petitions. More than a dozen retailers have filed for bankruptcy this year and at least 10 more could be on the edge of doing so. That would outpace the 18 seen in all of 2016. The bottom is not here for bricks and mortar yet.

Brexit: The price tag on this divorce is getting higher. Recent demands by the EU that the U.K. gird for a €100 billion payout in order to cover administrative fees and other charges may be just a starting point.  That’s up from a €60 billion tally seen only earlier this year. The negotiations are fraught already, and U.K. Prime Minister Theresa May has said she will be a tough person to deal with across the table.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 Mobile Order-Ahead Report, PYMNTS talks with Dan Wheeler, Wahlburgers’ SVP, on how the QSR balances security and seamlessness to secure its recently launched WahlClub loyalty program.

Click to comment

TRENDING RIGHT NOW