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Apple's next challenge is making high-tech go high-fashion

Tuesday, March 10, 2015 - 17:51
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Now that Tim Cook has outlined the full range of what the Apple Watch can do and how much it will cost, his next challenge will be proving high-tech counts as high fashion.

[SAN FRANCISCO] Now that Tim Cook has outlined the full range of what the Apple Watch can do and how much it will cost, his next challenge will be proving high-tech counts as high fashion.

In addition to laying out uses for the device, Apple Inc has also been careful to market it as stylish. The company paid for a 12-page advertising spread in this month's Vogue magazine, and model Christy Turlington Burns appeared onstage with Chief Executive Officer Cook on Monday to help reveal new details and applications. Mr Cook unveiled a version laden with gold that retails for US$10,000 or more.

Apple, with its emphasis on sleek design and easy-to-use interfaces, has helped make products - say, smartphones - that hadn't previously been seen as fashionable into must-have accessories. Now the company's task is to persuade style- conscious consumers that its watch is both useful and chic.

"The question is, can they really sell this thing as a fashion item?" said Jan Kniffen, chief executive officer of J Rogers Kniffen Worldwide Enterprises, a retail consulting and equity-research firm in New York. "Apple's a cool tech brand, and its not the same people shopping."

Apple shares, which climbed as much as 2.4 per cent before the watch was announced, gave up some of the gains after the presentation. Still, they closed 0.4 per cent higher at US$127.14 in New York, and have gained 15 per cent this year.

The stock traded at the equivalent of US$126.78 as of 9:27 am in Frankfurt on Tuesday.

Apps Matter The watch will be available for preorder on April 10 and will reach consumers on April 24. Its battery will run for 18 hours with typical use, Apple said. It comes in two sizes, with the Sport model priced at US$349 and US$399 and the midrange version starting at US$549. The high-end Apple Watch Edition starts at US$10,000.

At the event, Mr Cook emphasized the customizable nature of the watch's face and bands, including options for different colors and stainless steel cases, and even a Mickey Mouse motif. He said thousands of app developers have been at work building products for Apple Watch. Applications from companies including Facebook Inc, American Airlines Group Inc and Tencent Inc's WeChat were among those showed at Tuesday's event.

Apple is counting on such apps to help define those must- have services for customers who have so far shrugged off smartwatches made by Samsung Electronics Co, Motorola, LG Electronics Inc and Sony Corp.

Some luxury-watch buyers aren't interested. Kevin Rolle, 26, an investment banker who was getting his watch serviced at the Tourneau LLC shop on 57th Street in New York on Monday, said the Apple Watch doesn't stand out as a must-buy.

"I prefer high-end watches - it's not really high end," Mr Rolle said. While Mr Rolle said he thinks "aesthetically, it's a pretty watch," this isn't Apple's space.

"I think Apple is more of an electronics company," he said.

Making the case for buying Apple Watch isn't just a challenge among those who might otherwise opt for a Cartier or Rolex. The Cupertino, California-based company showed off its everyday uses in a bid to convince all consumers that they need another gadget in their already tech-heavy lives.

Mr Cook is betting that moving many of the conveniences of an iPhone to the wrist will save people time, and make Apple Watch worth the price tag. Unlock a door or open the garage with a tap on your wrist. Check into a flight and download a boarding pass. Buy groceries. Measure your heart rate to judge the performance of a workout. Order a car through Uber. Identify what song is playing in the background. Get wrist vibrations for text messages, meetings or Instagram postings.

"There's so much hype and expectation, but if it doesn't have any real utility you're going to have critics coming out of every corner," said Scott Galloway, a professor of marketing at New York University's Stern School of Business.

There has been plenty of skepticism surrounding Apple Watch - that it's too expensive, and the battery won't last long enough. Smartwatches made by other companies have a lackluster sales history, and some may be concerned that it's unsafe to trust a technology device to safely store health data. Unlike most timepieces, the device will be obsolete in a few years.

They have to demonstrate the things you can't live without," said Matt Johnston, CEO of Applause Inc, an app- testing firm that works with companies such as Google Inc, Amazon.com Inc and Twenty-First Century Fox Inc.

Some 10 million smartwatches were sold last year, up from 2 million in 2013, according to Gartner Inc. To speed up adoption, Apple is banking on a track record that helped make the iPhone and iPad hits. Before 2007 or 2010, when the two devices were released, there wasn't a history of success for touch-screen phones or tablets.

"Apple has a history of taking things further in the mainstream," said Mr Johnston. "But do I think Apple Watch will be a success in the order of magnitude like the iPhone? No, I don't. And that's partially because of use-case constraints." Whatever the reception among the fashion elite and consumers in general, Mr Galloway said the watch marks a milestone in Apple's shift toward the high end.

"You have celebrities in the audience, a supermodel on stage and a US$10,000 product," Mr Galloway said. "The transformation to a luxury brand is complete."

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