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What to watch for as Apple details reasons to buy smartwatches

Monday, March 9, 2015 - 23:40

[SAN FRANCISCO] The test for Tim Cook last September was to prove that Apple could still come up with innovative products, so he revealed a smartwatch. His next test comes Monday: convincing you to buy it.

Apple's chief executive officer returns to the spotlight to answer questions on many of the device's key selling points, including price range, battery life and when in April the watch will reach stores (and in which countries).

Those unknowns aside, perhaps the biggest question about Apple's first new gadget since the iPad is whether the Internet makes sense on your wrist.

"I would expect Tim to spend most of his time on Monday walking consumers through very unique use-case scenarios and exploring the implications for the Internet on the wrist and why it matters," Shawn DuBravac, chief economist for the Consumer Electronics Association, said. 

When the watch with a rectangular touchscreen was first shown in September, Apple said it would come in two sizes, three styles and tell time to within 50 milliseconds of accuracy. Applications allow for maps, photos, music and messages along with the ability to track health and fitness information.

Optimism over Apple's new products, including the watch, has helped push company shares to record highs in recent weeks. Watch sales may reach almost 14 million in the first fiscal year, according to the average estimate of five analysts surveyed by Bloomberg. The global smartwatch market could rise to 28.1 million units this year from 4.6 million, with Apple capturing 55 per cent of it, according to researcher Strategy Analytics.

Whether those projections prove true will depend largely on the details, which will be revealed on Monday starting at 10 am at the invite-only event in San Francisco (watch it online here). As it does with all major product introductions, ahead of the show the company took down its online store and posted the message, "We'll be back."

Here are four things to look for:

Price

"The price points are going to be the key focus point," said Jim Suva, a Citi analyst.

Apple has said that prices will start at US$349. The next price point might be US$550 and then US$950, according Suva's analysis, which suggest a stair-step approach similar to iPhone and iPad pricing.

Others see the high-end Apple Watch Edition-which is made with 18-karat gold that Apple promises to be twice as hard as "standard" gold and a display with polished sapphire crystal-could cost way more.

Piper Jaffray Cos' Gene Munster, for example, estimates the high-end watch will begin at US$4,999 and that the average-selling price may be closer to US$7,500 when high-end watch bands are included. Apple enthusiast John Gruber has suggested the high-end model could begin at US$10,000 and reach as high as US$20,000.

Battery Life

It's the question asked of every new Apple product: How long will the battery last between charges? The answer is often dependent on usage. Apple says the iPhone 6, for example, should stay charged for as long as 14 hours of talk time or 10 hours of surfing the Internet over a cellular network. Users, however, see different results in the real world.

"We expect the usage of Apple Watch through the day to be incredible because there's so many different things you can do with it, so we've designed it so it's simple to charge it at night," Mr Cook said in September. Subsequently, he's said, it will last a full day before charging each night.

Samsung says its Gear S smartwatch gets about one to two days of typical use out its battery while Pebble, which doesn't have power-sucking apps or as vibrant a screen as rivals, claims to last between five and seven days.

Website 9to5mac has said that the Apple Watch will operate for five hours of heavy use while it will go about a day with a mixture of active and passage use. Apple engineers, accordingto the New York Times, have come up with a feature called Power Reserve that will put the watch into a low-energy mode displaying only the time.  

"A full day is a decent benchmark for version one," Ben Bajarin, an analyst with Creative Strategies, said.  "What you're dealing with is that most smartwatches today last maybe a day, nothing gets better than that."

Apps

If there are only three or four great apps by the end of the year, the buzz going into 2016 will be that the "Apple Watch is nice but it's not a must have, and that will be the deal killer," said James McQuivey, an analyst at Forrester Research.

Apple knows that app selection is critical to the gadget's success, so it's been working with developers from companies including BMW, Facebook and United to have apps ready right out of the box.

"The list of features is a mile long," Mr Cook teased in September, noting that he uses his to control his Apple TV. He told the Telegraph that the watch was designed to replace car keys and he's touted a feature that reminds users to stand up if they're sitting for too long.

Mr Suva, the Citi analyst, says hundreds of apps for the watch may be available once it arrives in stores.

Rollout

So far, Apple has only officially said the watch will sell in the US. However, other things suggest a broader rollout: The first magazine cover to showcase the watch was China Vogue. In February, Apple managers met with Mexican regulators to discuss advances in health-care devices. And while touring Europe last month, Mr Cook talked about the watch with local media outlets.

During that trip, he visited an Apple store in Berlin where he mentioned to employees that the watch would launch in Germany in April as well, employees told website 9to5Mac. The company is planning an event for journalists in Berlin on Monday to run at the same time as the one in San Francisco.

BLOOMBERG