Did Apple Waste $38 million on Smartwatch Ads?

Did Apple Waste $38 million on Smartwatch Ads?

When Apple Watch was released in April 2015, Apple wasted no time when it came to pouring money into Apple Watch advertising, but did they waste money?  In the first month of release, Apple spent $38 million on Apple Watch TV ads, nearly matching the $42 million Apple spent on iPhone 6 ads over the course of five months. As we approach the one year anniversary of Apple Watch’s release, we’ve seen Apple Watch levels of adoption remain low, and do not match up with Apple’s hefty investment in advertising. One explanation for the low levels of Apple Watch adoption is that tech users are becoming more and more efficient with the technology they already have—like mobile devices. As mobile becomes powerfully versatile and functional, other devices are becoming outdated, and people are choosing to declutter their technology portfolios as much as possible. As a result, we’ve already seen a steady decline in hardware sales, including DVD Players, GPS Systems, and even televisions.  It is challenging for current technologies to keep up with mobile, and it is even more challenging for new technologies to come to market. Modern tech users have gained a very powerful skill—knowing if a new tech product will actually benefit their lives, or if it will weight them down. This is why we see opinion articles like this,  that question the actual benefits of owning a smartwatch. It seems that the need for smartwatches just isn’t big enough. Yet, when we look on the web, researchers are optimistic about a thriving smartwatch future–they continue to use phrases like “market poised for big time growth”  and “accelerated sales of the smartwatch”. Here are three reasons why smartwatches might actually become the next big thing in tech:

1. Because companies need to sell them.

Apple’s 2015 4th quarter sales reveal that Apple iPhone sales make up more than half of their revenue. Their second largest source of revenue is iPad sales, which still falls short of iPhone revenue by nearly $30 billion. From a business standpoint, it is dangerous for large companies to be so heavily dependent on one source of revenue. If the demand for mobile devices were to suddenly drop by even the tiniest bit, Apple’s revenue would take a huge hit. The strategic move then, is to diversify sales by investing in marketing a new tech product such as Apple Watch. It is predicted that the most important feature of the new Apple Watch will be the uncoupling of the smart watches with mobile devices, allowing smartwatch sales to match, if not, surpass mobile phone sales, relieving a lot of risk for Apple and similar companies.

apple fourth quarter

2. Because companies will make us need them. 

When the iPad was first released in 2010, there was a lot of hype surrounding the cool, new tech product, but the hype was accompanied by skepticism. Why did people need iPads when many were already in possession of portable, lightweight personal computers? It seemed redundant to own both. Yet, while the need was not obvious to consumers, the need was obvious to Apple. Apple did a great job marketing the iPad, and an even better job marketing the need for the iPad. Apple made it clear that people needed the iPad because it held nearly the same functionality as a PC, but was far more versatile. The iPad was not only useful in professional settings, but it was also a family-friendly device, simple to use, and accessible to people of all ages. These days, we see and use iPads whether or not we choose to. We see them in the hands of people on public transportation, reading a good novel on their commute to work. We use them when we pay for our coffee or food at many cafes and restaurants. We see elementary school kids playing games on their iPads and health care practitioners keeping health records on them. It is now hard to imagine a world without iPads, because Apple has been exceptional at making the world need their products. It is likely that Apple will use the same strategy in smartwatch marketing.

  elderly ipad ipad3

3. Because smart watches might actually benefit our lives. 

Smartwatches are still a new technology, but they have already had beneficial impact on our lives. A few examples of smart watch benefits: companies like Ford have developed a smartwatch app that allows Ford vehicle owners to control their cars via their smartwatch. People have the ability to unlock/lock their cars, get directions to their parked car, control the temperature of their car, check car mileage, all from the convenience of their wrist. Moreover, smartwatches have made payment more efficient. Instead of fumbling through stuffed wallets for a credit card, people can put cards on their smart watch e-wallet, and scan their smartwatch at checkout all in a matter of seconds.

apple pay

The smartwatch is like a second brain. It keeps us organized, and prevents us from forgetting anything important. Everything we could possibly need, including calendars, reminders, alarms, payment methods, health records, email, are attached to us at all times. And the best part? Because they are attached to us at all times, they are extremely difficult to lose. Smartwatches are truly the 21st century limb. They are not just another addition to our tech portfolios—they might become an important part of who we are.

So was the $38 million that Apple spent on smartwatch advertising a waste? The currently lacking need for smart watches might make us think so, but what historical examples such as the iPad have shown us is that what is far more important than the current need for technology is the potentially huge future need for new technology. If Apple mimics their iPad marketing strategy and successfully opens our eyes to the need for smartwatches, that $38 million will end up being a drop in the bucket.

Next Post:
Previous Post:
This article was written by