Apple mines big profits from Watch band

SAN FRANCISCO - Nearly 20 percent of Apple Watch buyers are not only shelling out hundreds of dollars for the timepiece but are springing for a spare band too, giving the tech giant a profitable second dip into customers' wallets, according to data provided exclusively to Reuters.

The data from Slice Intelligence, a research firm that mines e-mail receipts, offers a rare window into the money-making potential of Apple's first brand-new product under CEO Tim Cook.

The ever-secretive company has yet to release how many units of the watch it has sold, let alone how profitable it is. Slice estimates the company has sold 2.79 million as of mid-June.

But if the band purchases are any indication, sales of the watch itself are just the beginning of Apple's profits.

Although the entry-level sports band retails for $49, it costs only about $2.05 to make, according to an analysis of the 38-millimeter size by IHS, a technology research firm.

The estimates do not include expenses such as packaging and shipping and may not capture the full cost of the material Apple uses to make the band, said analyst Kevin Keller of IHS.

With the watch, Apple has put a high-tech spin on the razor-blade business model, in which a company sells a product for a modest price and then profits from sales of accessories, he said.

"Of course, because it's Apple, it's sell the razor, sell the blade," Keller joked.

Slice studies e-mail receipts from a panel of 2 million people representative of online shoppers in the United States, more than 20,000 of whom bought an Apple Watch. Data from Slice, which analyzed only bands made and sold by Apple, showed about 17 percent of shoppers purchased more than one band.

Slice says its data lines up closely with information from the Department of Commerce as well as Amazon sales data.

The black sport band is the most popular choice for both the band that comes with device and extras ordered by consumers.

But the $149 Milanese loop is the second-most popular second band, suggesting many consumers are pairing a practical sport band with a more luxurious option to make the watch more versatile, said Kanishka Agarwal, Slice's chief data officer.

"People are trying to get two watches in one," he said.

The entry-level Apple Watch sport model – which starts at $349 – has been the most popular among early shoppers, according to data from Slice. But an extra band – which fetches as much as $149 for the quilted leather loop and $449 for the stainless steel link bracelet – can raise the cost considerably.

The popularity of spare bands suggests some consumers may be spending more on the Apple Watch than they intended.

"It's just a psychological thing," said Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm. "I start with the least investment, and then I spend more money, but I get something else."

Former Apple executive Jean-Louis Gassée, for example, went with the sport model for his starter Apple Watch, reluctant to invest too much in a first-generation product.

But he did not skimp on bands, purchasing a black quilted leather loop and a white sport model. He reaches for the leather for business meetings and swaps it out for the rubber model when he heads to the gym.

Distinctive bands help customers match the watch to their outfits and lend the gadget a more personal feel, which is key to the appeal of wearables, said Allen Adamson, who is chairman of North America for Landor Associates, a branding firm.

"Apple needs to win the functional war, but they also have to win the fashion campaign and make it fun to wear," he said.

Apple has opened the door, creating a platform for third-party developers to design bands of their own. Apple will not share in the revenue from sales of those bands, according to a person with knowledge of the matter.

If bands designed by outsiders take off, that may make a dent in sales of Apple's own accessories. But having a stylish array of bands to enhance the appeal of the watch is most important, experts say - the extra revenue for Apple is just a fringe benefit.

source: www.abs-cbnnews.com

Wearables fight back as Apple Watch raises bar

TAIPEI -- The Apple Watch raised the bar for wearable technology when it launched in April, but smaller brands are seeking their own niche in the battle for wrist space.

New kids on the block at Taiwan's Computex tech fair insisted that style and simplicity were more important than myriad features, in the face of Apple's intimidating offering.

Apple's iPhone-compatible smart watch enables wearers to answer calls, check emails and access apps without taking their phones out of their pockets.

It also tracks fitness, plays music, offers customizable watch faces and comes in different colors and styles.

"Within consumer technology, smart watches are the biggest new category since tablets," said Daniel Matte, US-based analyst for research firm Canalys. "The Apple Watch has very much defined the category and set the benchmark for other vendors to follow."

Canalys has forecast 20 million Apple Watch shipments for 2015.

"Vendors other than Apple are improving their designs to be more fashionable and of higher quality, but the Apple Watch still has a significant design advantage," said Matte.

A host of smart watches are on the market from major players including Samsung, Sony, LG and Motorola, with Taiwan's Asus launching its new ZenWatch 2 Android Wear watch at Computex.

But lesser-known names are also taking their cue from Apple and attempting to forge their own direction.

"The Apple Watch is free advertising for less famous brands like us, because it makes more people interested in smart watches," said Christophe Arathoon of US-based watch-brand Omate, which launched its first smart watch in 2013, crowdfunded by Kickstarter.

Its watches are fashion-focused, says Arathoon, with the latest "Racer" a rugged sporty model in black, white, grey and red.

It links to iOS and Android phones, with wearers able to choose which notifications they receive. It also includes a music player and pedometer.

"Apple Watches are a good thing but they are too complicated," said Arathoon. "We have simplified our watches and made them fashionable and affordable."

The Racer costs US$149, less than half the price of the cheapest Apple Watch model.

'Zero features'

Taiwanese smart watch "Noodoe" also trades off its simplicity -- with its founder boasting it has "zero features."

The simple black band is billed as the "opposite of Apple Watch" but promises to help wearers channel their self-expression as they can copy their own hand-drawn images onto its monochrome watch face via a camera app.

Due to launch later this year for less than $100, it links to smart phones for notifications but has no fitness tracker.

"Most wearables of the last two years are more and more feature-centric," said founder John Wang, a former HTC executive.

"What we are trying to do is to recognize that wristwear has always been about self-expression.

"In a way, Noodoe is much closer to Swatch than to most of the wearables on the market today."

Other wearables on show at Computex ranged from mind-reading headsets to rings that might save your life.

Silicon Valley's Neurosky headsets -- which use EEG sensors to read brain activity -- are already on the market and will be used in new Star Wars game The Force Trainer II, released in September, in which wearers can imagine and control a hologram.

A less obtrusive wearable from Taiwan, the Keydex NFC Ring -- a ceramic ring which stores data -- introduced its new "SOS" model, which stores the wearer's medical information and can be accessed in an emergency with the tap of a smart phone.

And homegrown firm ChipSip showed the latest version of its smart glasses, which are being used in art galleries in Taiwan and Europe.

Wearers look at a painting and, through image recognition, explanatory text will appear in the glass.

The glasses can also be hooked up to headphones so wearers can watch and listen to movies and videos.

source: www.abs-cbnnews.com

Closer look at the newest Apple Watch

Consumers have been offered an assortment of Android smartwatches in recent years. But perhaps none of them generated as much anticipation as the Apple Watch did. It was unveiled just a few weeks ago, but the excitement among Apple fans has not faded.

Manila Bulletin Tech Editor Art Samaniego showed to Future Perfect a rare find in the Philippines, two all-new Apple Watches with different sizes.

ANC Future Perfect

source: www.abs-cbnnews.com

#Tattoogate: Snafu irks inked Apple Watch wearers

SYDNEY - Early adopters of the Apple Watch, Apple Inc's first new product in five years, are complaining that a number of its key functions are disrupted by their tattoos.

Owners of Apple Watch - including this reporter, who bought a 42mm version with stainless steel case and black classic buckle for A$1,029 ($822) - have found that their inked skin confuses the sensors on the underside of the device.

Users of the watch, which went on sale last week, took to social media on Thursday under the hashtag #tattoogate to air their frustration with the flaw from Apple's renowned design house.

One anonymous user on Reddit, an entertainment, social networking, and user-generated news website, said the device's locking mechanism, which should disengage when the watch detects it is being worn, failed to work on decorated skin.

"My hand isn't tattooed and the Watch stayed unlocked. Once I put it back on the area that is tattooed with black ink, the watch would automatically lock again," the user wrote.

This Reuters reporter, who has a black tattoo on his left arm, also found that the watch locks on tattooed skin and does not deliver the soft pings that alert a user to incoming messages. The heart rate readings were also significantly different on the tattooed and untattooed wrists.

An Apple support article says the watch uses green LED lights paired with light-sensitive photodiodes to detect the amount of blood flowing through the wrist and calculate the frequency of heart beats.

A website support page from the company says tattoos can interfere with readings from the heart rate monitor, but does not mention interference with other functions.

"Permanent or temporary changes to your skin, such as some tattoos, can also impact heart rate sensor performance. The ink, pattern, and saturation of some tattoos can block light from the sensor, making it difficult to get reliable readings," it said.

A spokesman for Apple in Sydney declined to comment on Thursday, but three Apple employees at its flagship Sydney store, including a senior advisor from its tech support line, said they were unaware of any issue.

"To be honest, you're my first caller about the Apple Watch at all," the senior advisor told Reuters.

The tattoo issue follows a report in the Wall Street Journal on Wednesday that some taptic engines, which produce the sensation of being tapped on the wrist, started to break down over time, a flaw that was slowing the rollout of the item.

The report said the problem had been detected in some of the parts supplied by AAC Technologies Holdings Inc, based in Shenzhen, China. Shares in AAC Technologies dropped 8 percent on Thursday morning after the report. The company did not respond to requests for comment.

A Taipei-based technology analyst, who is in regular contact with AAC, said he was not aware of the tattoo problem, but did not expect it would have a significant impact on production.

"We have been hearing suppliers encountering some bottleneck issues for Apple Watch's production such as problems with its displays, haptics or assembly," he told Reuters, adding that those issues were quite common for new products.

source: www.abs-cbnnews.com

New ultrathin MacBook, Apple watch launched

SAN FRANCISCO - Apple Inc Chief Executive Tim Cook began showing off features of the new Apple Watch on Monday at a presentation in which he is expected to give details of the launch of the product, the first created under his leadership.

Shares of Apple were up about 1.4 percent at $128.41.

The watch will track exercise, remind wearers of events with a tap on the wrist, and make calls through an electronically tethered phone, since the watch has a built in speaker and microphone.

"I have been wanting to do this since I was five years old," said Cook, who called the device revolutionary. He also laid out other product successes and launched a new MacBook notebook computer that starts at $1,299 and weighs as little as 2 pounds.

Every major car brand had committed to delivering Apple's CarPlay entertainment system, and the new iPhone 6 and 6 Plus have 99 percent customer satisfaction rates, he said. The Apple Pay payment system is now accepted at 700,000 locations, and Time Warner Inc's HBO in April will debut its streaming HBO NOW service on Apple TV.

Apple also is offering researchers new development tools, called ResearchKit, to help medical researchers design apps for clinical trials, the company said. (Reporting by Edwin Chan and Alexei Oreskovic; writing by Peter Henderson; Editing by Bernard Orr)

source: www.abs-cbnnews.com

Will Apple Watch be a runaway hit?

SAN FRANCISCO - Apple Inc launched its long-awaited watch on Monday, including yellow or rose gold models with sapphire faces costing up to $17,000, but some investors questioned whether Chief Executive Tim Cook's first product would be a breakaway hit.

Apple's first new device since Cook became CEO will be available for order on April 10 and in stores on April 24, including chic boutiques in Paris, London and Tokyo.

In a nod to both fashion and technology, Cook shared the stage with model Christy Turlington Burns, who used it to train for a marathon, and Apple engineers who showed how to send drawings, pictures and even heartbeats with the watch.

Apple shares barely budged, however. Investors and analysts agreed that Apple would sell millions to fans but questioned whether it had a "killer app" that would engage a broader audience. Apple in September gave a sneak peek of the watch which included many features shown on Monday.

"I think there's a niche market for these kind of Apple tech people who love Apple and will buy anything they come out with. But I just don't know if it's going to be the power product that everyone's looking for," said Daniel Morgan, senior portfolio manager at Synovus Trust Company in Atlanta, Georgia, who described Wall Street as "scratching its head".

Members of the style establishment, in Paris for shows from the glittering likes of Chanel, Givenchy and Hermes mostly said they saw the watch as a gadget, not this season's must-have accessory.

The Edition price tag which is inexpensive compared with a Patek Philippe Nautilus at just over $42,000 on 11main.com, inspired plenty of jibes on social media, including many who questioned whether it would become outdated and compared the price to a car's.

"Wonder what kind of gas mileage it gets," asked Twitter user Christopher Caruso.

Nevertheless many made clear they wanted it. "My birthday is gonna rock this year... :-) #applewatch," wrote Jay Runquist.

The Apple Watch sport will start at $349 for the smaller, 38-mm model. The standard version of the watch will start at $549 and the high-end "Edition" watch will be priced from $10,000, said Cook, who loved the Dick Tracy ability to hold phone calls by watch.

"I have been wanting to do this since I was five years old," said Cook.

The different models reflect different materials. A $17,000 Edition in the smaller, 38-mm size, has a case made from a customized version of 18-karat rose gold, which is especially hard, along with a sapphire display. It comes with a magnetic charging case.

A $349 Sport model the same size has an aluminum case, a 'sport band' and a magnetic charging cable, and no case.

All the watches share digital faces that can look like traditional time pieces, show the heart beat of a friend, and display photos and interfaces for apps.

"Apple's been very good at personalizing its products," said Angelo Zino, an analyst at S&P Capital IQ, who said the "intimacy" of the watch was appealing. He saw 10 million in sales this year.

In the presentation, Cook described the watch handling many functions currently associated with the iPhone, which tethers wirelessly to the watch and connects it to the Internet.

The watch will track exercise and remind wearers of events with a tap on the wrist.

Cook also laid out other product successes and launched a new MacBook notebook computer that starts at $1,299 and weighs as little as 2 pounds.

Every major car brand had committed to delivering Apple's CarPlay entertainment system, and the new iPhone 6 and 6 Plus have 99 percent customer satisfaction rates, he said. The Apple Pay payment system is now accepted at 700,000 locations, and Time Warner Inc's HBO in April will debut its streaming HBO NOW service on Apple TV.

Apple also is offering researchers new development tools, called ResearchKit, to help medical researchers design apps for clinical trials, the company said.

source: www.abs-cbnnews.com

Is Apple Watch a gadget or fashion statement?

CHICAGO/LOS ANGELES -- Apple CEO Tim Cook summed up the problem during a conversation with sales staff at a London Apple Store: "We've never sold anything as a company that people could try on before."

With the expected launch next month of the Apple Watch, the company's first new product in five years, Apple will be stepping into new territory.

To conquer the marketplace, the watch will have to appeal not only as a gadget but as a fashion statement, a fact tacitly acknowledged by Apple's decision to launch its advertising campaign with a 12-page insert in the March issue of Vogue.

The company isn't talking about plans for marketing the Apple Watch in advance of it's much-touted "Spring Forward" event on Monday, but it clearly intends to keep a tight grip on initial sales and distribution, leaving many retailers guessing about when -- or if -- they'll be able to sell it.

Sources with direct knowledge of the matter said that Best Buy Co. Inc., one of the largest sellers of Apple products, may not get the watch at launch time, though the company wouldn't comment on the situation.

Other large retailers, including Macy's, Saks 5th Avenue, Bloomingdales and Barney's said they had no immediate plans to carry the watch. Target and Nordstrom, along with all the major phone carriers, declined to comment on their plans, though a source with knowledge of the situation said Nordstrom has engaged in discussions with Apple.

"Apple is being cautious. There are too many unknowns around how this product will perform," said Van Baker, research vice-president, technology research firm Gartner Inc.

That might mean restricting initial sales to company stores, where Apple has complete control over the experience and staff can be specially trained to sell the watch, Baker said.

Apple's Cook seems very aware of the challenge. The Telegraph, which sent a reporter with the CEO to the company's Covent Garden store, reported that he explained to the staff that selling the watch might require "tweaking the experience in the store."

In the absence of hard information about what the tweaks might look like, speculation has been intense. The Washington Post last week suggested that Apple might add carpeting and mirrors and change store lighting to enhance the watch-buying experience.

Media outlets and websites have also posited that the watch will be offered at special pop-up stores installed at luxury retailers such as Selfridges in London and Colette in Paris.

Apple hosted a private event at Colette last September, at which guests were able to try on the watch, but a spokesman for Colette declined to comment on whether the store would carry it.

Until now, wearable gadgets have not been big sellers for technology companies. Rival products such as Samsung's Gear watches have sold poorly.

Apple hopes to change that, but it is still a big if whether the watch will appeal to buyers seeking a fashion accessory, especially if it needs to be upgraded every few years like Apple's phones, tablets and computers.

"It could do wonders for the watch market if it means people might wear watches again, but realistically, there are a lot of doubts," said Eric Wilson, fashion news director of InStyle.

"Fashion customers are more skeptical than anyone, so Apple has picked a tough crowd."

source: www.abs-cbnnews.com

Apple to hold event on March 9, as Watch launch nears

SAN FRANCISCO - Apple Inc sent out invitations for a media event in San Francisco on March 9, about one month before the much-anticipated launch of the new Apple Watch.

The world's largest technology company did not specify what the event will be about in the invitation which reads simply "Spring Forward," a word play on the resetting of watches for daylight saving time.

Chief Executive Tim Cook said last month that the company plans to launch the smartwatch in April. The watch, which will let consumers check their email, pay for goods at retail stores and monitor personal health information, represents Apple's first major new product introduction since the 2010 launch of the iPad.

Shares of Apple were up 88 cents at $129.67 on Thursday.

source: www.abs-cbnnews.com