BHO2259 Product and Service Innovations: Apple Watch Report

This report provides a comprehensive analysis of the Apple Watch, examining its product and service innovations, market positioning, and competitive strategies. It begins with a background on the Apple Watch, including its vision, goals, product portfolio, and key milestones since its introduction in 2014. The report delves into the product's features, market description, and positioning, and compares it with competitors like Samsung and Google. It explores the company's current competitive strategies and outcomes, highlighting the challenges and opportunities facing the Apple Watch in the market. The analysis covers market-related, firm-related, and product-related factors, offering insights into the factors contributing to the Apple Watch's success. The report also discusses the challenges such as competition, power consumption and user privacy. The report concludes by summarizing the key findings and the future direction of the Apple Watch, based on the analysis of the challenges and opportunities that directly affect it.

Apple
Product service and innovation

Summarise of key issues from phase A
In 2014, the first official Apple watch was introduced in relation to the research since 2002.
The main objective of the company was to make a smart wearable device, which leads, in the
easier life of the consumer. The company also want that the people need to look continuously
on the mobile screen for some respective short notifications.
The Apple smartwatch includes single-core s1 system on chip relying on a paired iPhone. In
this watch, the company also consider various safety measures and thus add inbuilt heart rate
sensor. The major average specification of their watches includes 8GB storage, Bluetooth 4.0,
512 MB ram, and slash resistance. Since its release, this watch has achieved many milestones
and also satisfying the consumers which can be seen in terms of its growth as the sales rose
by 60% in the year 2017.
In terms of product portfolio, these smartwatches can be divided into Apple sports segment,
Apple edition and classic Apple watch. In the second generation of the product, the company
has introduced various new features such as watches, and higher processors with the
introduction of many new advanced apps so that the user experience can be raised.
In terms of the market positioning, currently, the company is selling only third series Apple
Watches by targeting the people of age group 20-45 years. Focusing on the product line, the
company market 4 types of Apple watches. Their pricing strategy is also based on premium
bases like their smartphones, which makes them a competitive edge in the market. In
addition, the promotional strategy of the company is based on fashion or fashion accessories.
In contrast with the competition, the company faces various challenges from the big brands
such as Samsung Gear smart watches, Google wearable watches, and Fossils. However, the
company main focus was on the basic needs of the consumers and thus the Apple watches not
only providing them various essential features but also those basic features which are
appealing and easy to use. In relation to their competitive strategy, the company is providing
their customers a different set of activities with composition of unique mix of values. They
are focusing both on the hardware of the product as well as for its promotion. Their smart
watches chips were designed by around 1000 chips makers and with their promotion strategy,

the company is impacted individual mindsets. By doing this, the company has made a
significant competitive advantage in the industry.

Opportunities and challenges of Apple Smartwatch
Apple Company offers various aids in terms of its quality of product to various businesses as
well as individuals. The products that it offers are highly innovative and creative that are
needed by persons in today’s life. Recently, it has launched a “smartwatch” which is most
powerful product of Apple in recent days (Hsiao, 2017). Therefore, it understands the user
need and preferences by offering these kinds of product.
Various opportunities are available for Apple Smartwatch. It can boost the demand of its
related product that can be associated with the watch for synchronization. Furthermore, it can
raise the revenue by this strategy. In addition to this, various app developers and makers can
also attract with this application due to its relatedness with the health and fitness. Apple can
also get benefits if it will continue the enhancement of its functionality and features. By doing
this, at least all the iPhone users will get attracted towards its watch. Moreover, small
segment of iPhone users has currently owned the Apple watch (Porter & Heppelmann, 2014).
Therefore, the company has plenty of rooms to raise the penetration of Apple smartwatch
with all the users of iPhone. Besides all the opportunities, versatility is also one such
characteristic of its Apple smartwatch. This product of Apple has expanded its roots in
various sectors such as easy payment, fitness and health, life management and for
entertainment purpose.
The opportunity to syndicate health trackers best fitted with numerous sensors, connectivity.
Interface technologies in different ways will improve productivity, engagement, and personal
insight. Moving further, all these things will raise the overall experience of consumers (Ha et
al, 2017).
There are various issues also attached to the smartwatch of Apple that threatens the brand. It
also has significant impact on the revenue of the organization that may result into loss in
reputation. Various other companies are coming up with new ideas in order to beat the
smartwatch of Apple. The biggest challenge it is facing from the Samsung and Sony that are
coming up with their watches. The cost of their product is also low by using various new
techniques for ensuring higher performance (Nagle & Müller, 2017). The developers and app
makers are also high in number as compare to the IOS. These are huge in number due to the
open source functionality in android. The increase of tax rates in USA will also put the direct

impact on the growth and development of smart watch of Apple. In today’s business
environment, there are constant changes in demographics. Therefore, due to continuous
changes in demographics, fluctuation in demand of customers, there is need to release the
upgraded version time-to-time (Moreno-Munoz et al, 2016). Power consumption is also
important need of customers if they are purchasing costly watch. It presents a big challenge
for the company that include the privacy of users, low battery issues that is power
consumption as well impact on brain. The perception of every consumption is somewhat
different for the electrical products and innovative products (Kang, Chang and Song, 2013).
In the report, work was divided to the different members of team so that accurate solution can
be received. From all the members, one of the team members was assigned the task of doing
critical analysis that included project related factors and firms. The other team members were
assigned the task of doing commercial viability analysis. It includes the finding of some
market-related factors and product related to the smartwatch of Apple. I have given the task
of finding out the correct path of future by analysing the challenges and opportunities that
directly affect the Apple smartwatch.

References
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Ha, T., Beijnon, B., Kim, S., Lee, S. & Kim, J 2017, ‘Examining user perceptions of
smartwatch through dynamic topic modeling’, Telematics and Informatics, vol. 34, no.7,
pp.1262-1273.
Hsiao, K.L 2017, ‘What drives smartwatch adoption intention? Comparing Apple and non-
Apple watches’, Library Hi Tech, vol. 35, no. 1, pp.186-206.
Kang, H., Chang, S. & Song, J 2013, ‘Competition for Platform Leadership: The Smartphone
War between Samsung Electronics and Apple’, Korea Business Review, vol. 17, no. 1,
pp.161-202.
Moreno-Munoz, A., Bellido-Outeirino, F.J., Siano, P. & Gomez-Nieto, M.A 2016 ‘Mobile
social media for smart grids customer engagement: Emerging trends and
challenges’, Renewable and Sustainable Energy Reviews, vol. 53, pp.1611-1616.
Nagle, T.T. & Müller, G 2017, The strategy and tactics of pricing: A guide to growing more
profitably. United Kingdom, Routledge.
Porter, M.E. and Heppelmann, J.E 2014, ‘How smart, connected products are transforming
competition’ Harvard business review, vol. 11, pp.64-88.