Marketing Strategy: Commercial Viability Analysis of Apple Watch

This report provides a thorough commercial viability analysis of the Apple Watch, examining various factors that contribute to its success in the market. The analysis begins with an overview of the Apple Watch's product-related factors, including relative price, quality, uniqueness, and technological advancements, highlighting its competitive advantages. The report then delves into market-related factors such as target market concentration, timing of market entry, competitive pressure, and marketing strategies employed by Apple. A summary analysis synthesizes the findings, concluding that the Apple Watch is a commercially viable product due to its strong brand loyalty, advanced features, and effective marketing. The analysis refers to the 'Critical factors for innovation success model' from the provided assignment brief and concludes that the Apple Watch is a commercially viable product of Apple Inc.

Running head: COMMERCIAL VIABILITY ANALYSIS
Commercial Viability Analysis (Apple Watch)
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COMMERCIAL VIABILITY ANALYSIS
Commercial viability analysis of Apple Watch
 Product related factors
Relative price: Apple Watch was first launched on 24th April, 2015 and from then, Apple Inc.
has introduced 5 generations and 5 series of the Apple Watch. The latest Series 4 was announced
in September 2018 and currently the first generation and series 1 are no longer produced (Zhang
2018). The relative price of the Watches is quite low or affordable, making the product available
to a large target audience. It starts with $399 for the 40mm version with GPS. The price for
44mm Wifi only version with starting price $429 and the LTE toting version of the Watch starts
at $499 for the 40mm version and $529 for the 44m version (Rogerson 2018). This is quite
cheaper as compared to the other smart products produced by Apple. Considering the demand of
Apple products despite its premium pricing, the price of Apple watch is reasonable and thereby
the demand for the product is high.
Relative quality: As the Watch is produced by one of the best innovative companies in the
world, the quality of the watches is quite high. It has 2 different sizes 40mm and 44mm. The
watch remains connected with smart phones. The performance of the watch is good over the
years, it has good speed, good navigation and good heath tracker, and hence, it has a substantial
market share. It has been termed as one of the best smart watches in the market.
Uniqueness: Apple watch is equipped with GPS, Wifi and cellular networks. It is an accessory
to the iPhone. With a better, bigger and brighter display, this watch helps in navigation, keeping
a track of fitness and provides hands free call answering and messaging technology (Fisher
2014). Moreover, it offers customization options with the belts and bands, unlike products of the
competitors. The straps can be removed as well as changed with colorful bands. The most unique

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feature is that Apple Watch also has an ECG app that is capable of taking the electrocardiograms
on the go and an atrial fibrillation feature, which alerts the user when there are 5 irregular
rhythms of the heart (McGarry 2019).
Technological advancement: Apple Watch series 4 runs on OS 5. It is the latest iOS version
and it has been found that Apple watches are faster than the smart watches running on Google’s
OS and Qualcomm Snapdragon 2100 chip (McGarry 2019). The navigation system is also highly
advanced compared to the rival products.
 Market related factors
Target market concentration: The target market for Apple Watch consists of the iPhone users,
as the watch can be paired with iPhone. Although Apple Inc. has not shared its total sales volume
or market concentration data, however, from the industry reports, it was seen that after the launch
of first generation of Apple Watch in April 2015, within second quarter of 2015, 4.2 million
units were sold. However, as reported by Kwan (2019), the smart watch market share of Apple
has dropped to 43.45% as the competitors are introducing more innovations in their products,
although the market share is much higher for Apple than its rivals’. Moreover, Apple sells its
watches globally similar to its other products through direct marketing, which makes the product
more appealing to the target customers.
Timing of market entry: Apple Watch entered the market in 2015 with all latest smart features,
when there was no other smart watch in the market and thereby it enjoyed the first mover
advantage in the market (Olson 2015). The smartphone market was developing at that time and

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while other rivals were busy developing the smartphones, Apple Inc. launched an innovative
product, that is, smart watch.
Competitive pressure: Apple was the first to launch a smartwatch. Currently, the rivals are the
Fitbit, Google, Samsung and Huawei (Kalb 2016). These companies have launched their
products at a much lower price than the Apple watch and that is attracting the customers. These
rivals also provide high quality products in order to capture a substantial market share. This has
led to a fall in the market share for Apple Watch. However, the features or designs are more
attractive in case of Apple than its competitors, which has been an addition to the brand loyalty
of the customers.
Marketing: Apple promotes its premium pricing strategy for all the generations and series of the
Apple Watch. Along with that, Apple also promotes the features that integrate various purposes,
such as, fitness tracking, heart rate tracking, navigation system and hands free calling and
messaging system. Among these, the health and fitness data trackers are mostly emphasized by
the company. It also focuses on brand visibility in its promotional campaigns by putting up
hoardings. Its look and feel is also highlighted in the promotions to portray it as a fashion wear
which is paired with the smartphone (Peñaloza 2018). Thus, the company makes it look quite
attractive to the target audience.
 Summary analysis
From the above product and market related factor analysis for Apple Watch, it can be
said that the smart-product by Apple Inc. is another moderately successful product in their
portfolio. The benefit of pairing the wearable with their iPhone is a major attracting factor for the

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users to buy the Apple Watch. Although there are smart watches by the rival companies with
similar features, Apple Watches provide many other advanced feature within one product, such
as, apart from traditional clock, it has GPS, cellular data network, option for hands free calling
and messaging and most importantly an improved fitness tracker and ECG app. The price of
Apple Watch is slightly higher than the rivals’ products but it has a dedicated market, who are
loyal customers of Apple. Brand loyalty plays a major role in the sales of Apple Watch, similar
to any other products by Apple. The quality and performance of Apple Watches are also better
than the other competitor products which have kept the product ahead of the others. The
marketing technique by Apple includes personal touch by the company, which helps in reaching
out to a larger audience and striking a chord with them. Thus, Apple Watch is a commercially
viable product of Apple Inc.

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References
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Fisher, M., 2019. 5 things the Apple Watch already does better than the competition |
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competition [Accessed 19 Apr. 2019].
Kalb, I., 2016. Apple Watch: Success or Failure?. [online] HuffPost. Available at:
https://www.huffpost.com/entry/apple-watch-success-or-fa_b_8060310 [Accessed 19 Apr.
2019].
Kwan, C., 2019. Apple smartwatch market share drops below 45 percent: ABI Research |
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McGarry, C., 2019. Apple Watch Series 4 Review: The Best Smartwatch, Now Even Better.
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4,review-5764.html [Accessed 19 Apr. 2019].
Olson, P., 2015. These Demographic Stats Suggest The Apple Watch Could Be A Hit. [online]
Forbes.com. Available at: https://www.forbes.com/sites/parmyolson/2015/03/09/apple-watch-
demographic-stats/#6be68a301581 [Accessed 19 Apr. 2019].

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Peñaloza, L., 2018. Apple: from subculture to cultural dominance. The Business & Management
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Rogerson, J., 2018. Apple Watch price range breakdown: how much does each Series cost?.
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