Why Apple's biggest new bets haven't paid off yet
The big theme of Apple's annual Worldwide Developers Conference this week was change.
Apple overhauled the clunky look and feel of its Apple Watch software barely a year after the product launched. It redesigned Apple Music to be simpler to, you know, find and listen to music. And the company expanded Apple Pay to the web so it's not longer solely dependent on the slower adoption of retail stores.
It may be easy to write-off these changes as evidence that Apple messed up its big new product categories, but longtime Apple analysts have a different take.
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"When we look back on history, we tend to be very polite and think that the iPhone from the first version was the perfect device," says Neil Cybart, who runs Apple analysis site Above Avalon, in an interview this week with Mashable's Biz Please podcast about all things Apple, which you can stream below or download on iTunes and Stitcher. "In reality, we are going to see these changes and these small pivots."
Even with these overhauls, some consumers and investors doubt whether any of Apple's current big bets are actually paying off. Does the smartwatch really have the potential to be as big as the iPhone? Is Apple Pay as exciting as the long-rumored Apple Car?
The problem, according to Horace Dediu, a mobile industry analyst with Asymco, isn't that Apple is waiting too long to enter new product categories, but rather that it actually got into markets earlier than usual.
"Apple is best at filling markets from about 5%-50% of the penetration," Dediu says on the podcast. "Which is why Apple doesn't usually enter markets until at least victims [are] laid end to end to sort of show the path forward."
That wasn't true with the Apple Watch, however.
"They probably got in at the 1% level as opposed to the 5%. You are looking at literally hundreds of millions more watches need to be sold before Apple gets in the right groove," Dediu says. "The same thing with virtual reality and the same thing with payments. Those are super early."
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Seth Fiegerman was a Senior Business Reporter at Mashable, where he covered startups, marketing and the latest consumer tech trends. He joined Mashable in August 2012 and is based in New York.Before joining Mashable, Seth covered all things Apple as a reporter at Silicon Alley Insider, the tech section of Business Insider. He has also worked as a staff writer at TheStreet.com and as an editor at Playboy Magazine. His work has appeared in Newsweek, NPR, Kiplinger, Portfolio and The Huffington Post.Seth received his Bachelor of Arts from New York University, where he majored in journalism and philosophy.In his spare time, Seth enjoys bike riding around Brooklyn and writing really bad folk songs.
