Branding Apple Watch

06 Sep 2016

“You want to take the time to get it right. Our objective has never been to be first. It’s to be the best.” Tim Cook, CEO, Apple Inc.

Apple is never first to market when it comes to new product categories. Their flagship product, the iPhone, while being the first hugely popular smartphone, was not the first smartphone by a long shot. However, it was the first smartphone that focused on appealing to the everyday consumer, and shifted the perception of the smartphone away from being purely an enterprise device. The smartphone became personal, fashionable and as mainstream to use as cell phones themselves. With Apple Watch, Apple is attempting to continue to ride this trend. While not first to market in the product category, Apple wants to position their smartwatch as a lifestyle product that defines the consumers personal fashion sense, as well as a very functional device to complement the iPhone.

Apple has been moving closer and closer to designing and releasing products that are as fashionable as they are technical. With the launch of the Apple Watch, Apple’s self described “most personal device ever,” along with key moves within the company’s executive staff and ecosystem, Apple is clearly aspiring to be a major player into the world of fashion, and is attempting to pivot out of being purely a consumer electronics and services brand.

Branding Watches

“Author Ian Fleming was meticulous about the kind of watch his secret agent should wear: ‘He could not just wear a watch. It had to be a Rolex,’ he said in his book Casino Royale, convinced that “a gentleman’s choice of timepiece says as much about him as does his Savile Row suit”

Rebecca Doulton, The Jewelry Editor

The wristwatch, being one of the only pieces of jewelry marketed to men as much as women, persists as a symbol of taste and fashion within society. Sean Connery as James Bond, as much a symbol of masculinity as anyone else in western fiction, wore a Rolex Submariner in all of his portrayals of Bond. The watch has become “so associated with Bond that collectors today still refer to this model as the James Bond Submariner.”

In his book Masters of Contemporary Watchmaking, Michael Clerizo describes the watch as “a small thing, yet as produced by some it may possess great beauty, entertain and educate, display a sense of humour, irony or history, provide social commentary, and even express the nobility of the human spirit and the grandeur of human dreams.”Watch enthusiasts describe the timepiece as something that transcends functionality. It can describe a lifestyle, a time and a place, and provide a very intimate look into one’s personal taste. Legendary English watchmaker George Daniels explained in his autobiography that “Part of the fascination for me was its [the watch’s] complete independence from outside assistance. It needed no batteries or plugging in, it was self contained and made no demands…it exactly echoed my own philosophy and made a great impression on me.” Swiss style watchmakers, especially those who construct by hand, share this sentiment. The very deliberate fusion of style with mechanical excellence is something they strive for.

Modern Day Watches

In the 1970s, the mechanical watch market saw something called the quartz revolution take place, where cheaper and more accurate pieces were being made, especially by Japanese and Chinese manufacturers, which ran on batteries and quartz crystals. While many Swiss style watchmakers still saw the value and elegance in mechanical watches, most of the world began to move in droves over to this cheaper and easy to produce technology. On December 25th, 1969, the Japanese company Seiko unveiled its Quartz Astron, the world’s first mass produced quartz watch, “It shifted the balance of power to the Far East, toppled Switzerland as the world’s watch production leader, sent the Swiss watch industry into a two-decade-long tailspin.” [1] Around the same time, the Swiss were also developing their own quartz watches, but did not embrace it with nearly as much fervor as Seiko and other Japanese and Chinese companies. They saw the mechanical watch as a sign of tradition and elegance, and did not want to switch over to a technology they saw as inauthentic.

The majority of watches sold in the current day are quartz watches manufactured in China and Hong Kong. However, even as overall exports of watches fall, the Swiss mechanical watch (along with high end Swiss quartz watches), have seen an uptick in sales in recent years. According to Credit Suisse, China exported around 678 million watches in 2012 with a value placed around $5 billion dollars. The Swiss exported around 29 million units, but for a value of $22.9 billion dollars. The high end of the market for Swiss watches is thriving, and the demand for this type of luxury good is still there.

TAG Heuer, one of the biggest Swiss watchmakers, has recently pivoted its branding and sales strategy. They want to refocus to what they consider their “core price segment,” that is watches that are priced between $1500 and $5000. TAG Heuer CEO Jean Claude Biver, who is largely credited with helping the Swiss watch industry navigate the quartz revolution, identifies the luxury market as its bread and butter. The luxury watch is an easily marketable, high margin fashion piece that serves as much or more of a status symbol than a timepiece. Ryan Raffaelli, professor of Business Administration at Harvard University said of the mechanical watch that, “The value of some products may go beyond pure functionality to embrace non-functional aspects that can influence consumer buying behaviors.” Biver remarked, “We have now decided not to give up this “upper price segment,” but at the same time, devote more innovation, more creativity, and more references in the ‘core price segment.’” This core price segment (again, $1000-$5000) is very important to the Swiss watch industry, especially as they attempt to make a comeback into a price segment still dominated by Japanese, Chinese and even other Swiss companies, esspecially under the Swatch Group (i.e Tissot, Longines) umbrella.

They are also attempting to market to a younger audience, a group commonly neglected by many midrange and luxury watch companies. “We will try to attract even more than before the young generation and young customers. Thanks not only to avant garde and attractive products, but also together with new ambassadors coming not only from the sports world, but also from lifestyle or the music world.” The Swiss watch market, especially TAG is doing two things: repurposing their mechanical watches as solely luxury products while pivoting the branding of their middle and lower tier products towards a young, affluent crowd.

Apple and the iPhone

When Apple launched the iPhone in 2007, the smartphone market was a total mess, and filled with almost exclusively enterprise options: outdated Palm products, Symbian OS (running on Nokia devices), Pocket PC, (which later morphed into Windows Mobile) and of course Blackberry. The sex appeal for smartphones was nowhere to be found. These products were barely marketed towards the everyday consumer, were not (albeit subjectively) attractive design wise, and run on software that felt extraordinarily dated. Also, consider that the smartphone was far from mainstream. In 2006, the year before the launch of the iPhone, smartphones consisted of only 5% of the overall cell phone market share. Most cell phone users were using what are now called “feature phones”: the flip phones, candy bar phones, basically anything now considered ancient in the cell phone world.

The iPhone popularized a number of things now considered commonplace on phones. The main innovation was the focus on the everyday user, which is something Apple, especially during the Steve Jobs eras, has been incredibly good at. In classic Jobs fashion, he explained the problems with existing products on the market and laid out exactly what he intends to do about it with his product. The entire first act of the keynote was spent eviscerating the current smartphone market.

Product design was a major focus on the original iPhone. Not only did it look like an attractive, luxury product, but it became the standard to which smartphones were designed going forward. The iPhone’s large touchscreen and omission of a physical keyboard became commonplace on mobile devices even just a few short years after the launch of iPhone.

Enter Ahrendts

Angela Ahrendts was brought on by Apple in the Spring of 2014 to lead what has become a very important part of Apple in recent years, their direct to consumer retail stores. Ahrendts had recently turned around the British luxury fashion brand Burberry, bringing them out of obscurity in an industry dominated by fashion conglomerates such as LVMH (Louis Vuitton Moët Hennessy) and PPR (Pinault-Printemps-Redoute.) In a piece she wrote for the Jan-Feb 2013 edition of the Harvard Business Review she discusses what she saw as the fundamental flaw with the Burberry product line: lack of focus on a flagship product, and lack of a consistent experience with the company’s products. She recognized the trenchcoat as Burberry’s flagship product, something they have sold for over a hundred years. “For more than a century, the Burberry trench coat was cool. But when I became CEO, outerwear represented only about 20% of our global brand business…we realized that Burberry was the only iconic luxury company that wasn’t capitalizing on its historical core. We weren’t proud of it. We weren’t innovating around it.” Ahrendts knew that returning to that core product, connecting the customer to that product, and providing a consistent retail experience were essential to the brand that Burberry was trying to be. Ahrends did three things at Burberry that I think are major reasons why she was brought onto Apple in such a powerful role. First, there is the aforementioned focus on the core product and experience with that product, from everything to the way it is experienced in marketing to retail and to the final sale. Second, she knew that the company had to start marketing to a segment that is largely ignored by luxury brands: millenials. She wanted Burberry to be one of the only brands that directly positioned luxury fashion to a younger audience. Finally, she has, much like top brass at Apple, an intense focus and understanding of the importance of design, in all aspects of the brand. “If Burberry was going to be a great, pure, global luxury brand, we had to have one global design director.” She brought on what she called a brand czar, a young designer who managed, in Ahrendts words, “Anything that the consumer sees…no exceptions”

Apple knew that the retail experience of selling the watch product was unlike anything they had done before. They had to bring in someone who was an expert about the branding of luxury fashion, especially with a focus on the consistency of selling the product. Under Ahrendts guidance, Apple has restructured Apple retail stores to allow for areas that are solely for trying on and experiencing the watch product. Much like going to buy a watch in a jewelry store, you have a one on one appointment with a specialist who shows you all the different collections of the watch, and also like a luxury retail store, fits the product onto the customer. Second, Apple knows that in order for the watch to succeed, they need to target younger and millennial consumers. Younger, affluent customers are a key demographic of Apple’s branding across all of their products, and this is no exception for the watch. Selling something like a watch, that is viewed as archaic by a younger audience, is a difficult task, but Ahrendts did exactly that at Burberry with the branding of the trenchcoat. Finally, and I think the most telling, is Ahrendts belief in the philosophy that a company needs to be structured around a core product. Right now for Apple, that core product is far and away the iPhone. It guides all aspects of their brand, and is certainly their most profitable product. The watch works in tandem with that core product, and in order to be marketed successfully, needs to be positioned as a must have alongside the iPhone. Bringing in someone who is an expert on the concept of the core product is very telling.

Jony Ive and Apple Design

“Apple’s designers have long had an influence in the company which is barely imaginable to most designers elsewhere. This power ‘was anointed to them by Steve, and enforced by Steve, and has become embedded culturally…Jony has assumed the creative soul of the company.”

Robert Brunner - former design lead, Apple Computer

Jony Ive, the english industrial designer has been at Apple since before the return of Jobs in 1997. Ive has been a huge part of the design and aesthetics ethos at Apple for over 15 years, developing a very close working and personal relationship with the late founder and CEO. Ive’s designs for personal products are largely inspired by legendary Braun designer Dieter Rams’ sentiment that new objects should be “innovative, useful, aesthetic, understandable, unobtrusive” as well as have “as little design as possible.” His product design echos exactly what makes Apple’s products so memorable: the mix between effectiveness and not letting design get in the way of consumer experience. Brunner remarked that, “He [Jony] gets the big picture as well as the most infinitesimal details about each product… He’s not just a designer.”

In 2012, Apple very publicly fired their VP of iOS software Scott Forstall, citing a number of concerns about the recent launch of the iPhone 4S as well as the iOS 6 mobile operating system. Forstall was the original designer of much of Apple’s software in the 21st century, with their Mac OS X desktop system and its mobile counterpart iOS. Apple’s software in the mobile space consists of what many describe as skeuomorphism, which is a design philosophy that consisted of designing items that resemble their analog equivalents. As an example, the “Notes” application on the iPhone in iOS 6 resembles a yellow legal pad, blue college ruled lines and all. Frankly, the modern, unobtrusive industrial designs of Ive team for the products themselves, clashed severely with the design aesthetic of the software they ran. Around the same time, rumors were swirling that Ive himself was considering leaving Apple to semi retire and start his own design company, to focus on designing his own products, most likely in the luxury tier.

This all came to a head in 2012, when Apple had to make a decision about how important Ive was to the company, and how they would tackle the issue of their increasingly outdated looking mobile operating system. I would venture to say that firing Forstall had more to do with giving Ive even more power within the company (as well as dictate design and aesthetics in all aspects of product development) rather than the less than stellar iOS 6 and iPhone 4S launches. For me, this only reinforced that style and taste were more important to Apple than anyone realized, and also that Ive, their VP of design, has a tremendous amount of power within the company. I struggle to come up with another technology brand that allows their lead designer and his team to wield as much power as Ive and his team do.

State of the Smartwatch

The wearable device market began to take shape in 2012-2013, with the surprising run away success of the Pebble smartwatch on Kickstarter and the launch of the Samsung Galaxy Gear in September of 2013. I say wearable devices and not just smartwatches because another radically different product, Google Glass, a head mounted wearable product had also launched its Explorer program, where software developers and other tech influencers were invited to buy the product in an early stage for $1500 US dollars. A head mounted computer was not the direction Apple wanted to take “When he later saw Google Glass, Ive said, it was evident to him that the face “was the wrong place.” Tim Cook is on record saying that “people would not really want to wear them. They were intrusive.”

Samsung’s Galaxy Gear was launched in September of 2013 and was designed to slot into the “Galaxy” line of devices. The design of the Galaxy Gear was described by reviewer Vlad Savov of The Verge as “try[ing] to have something for everyone and end up pleasing no one in particular.” Another reviewer for tech site Engadget flat out said “ I was never fully comfortable while wearing the Gear.” The Gear, which, upon launch only worked with certain Galaxy Note devices, was a strange mix of mens watch design and feminine color choices for the non interchangeable band. “[it has] a chunky steel clasp and exposed screws for fans of oversized men’s watches, yet also Rose Gold and Oatmeal Beige colors for a feminine audience.” Writing for Mashable.com Chrisitna Warren took issue with this by saying simply that “It’s not meant to be a fashion statement…I can’t see any of my female friends agreeing to wear — let alone purchase — a Galaxy Gear. It’s just too bulky, too unattractive and too overtly masculine.”

Consisting of a piece of rounded glossy plastic, and rubber band, The Pebble is clearly taking cues from the Casio Databank watches of the 1980s; big black plastic slabs with easy to read monochrome screens. Functional yes, but with little to no fashion sense; it was unabashedly the 21st century version of the calculator watch but through Kickstarter reached a much wider audience. After the success of the Kickstarter, Pebble released the Pebble Steel, a stainless steel version of the device at a higher price point. One can speculate that the success of their Kickstarter is really what put wearable tech on the radar. With over 10 million dollars in funding, and millions more in sales once the product went on sale to the general public,

I think Apple and others took notice that this may be something that may be ready for primetime. But they also decided that they did not want to be in this price point, nor offer only one (later two) case and band styles. And I would venture to say that one of the main reasons these devices failed to gain much traction among a large number of consumers is that they frankly were not very fashionable to wear.

Apple Watch Branding

“A device you wear is vastly different from one you keep on a desk or carry in your pocket. It’s more than a tool. It’s a true expression of your personal taste. So we designed Apple Watch to reflect a wide range of styles and preferences. Because we want you to love wearing it as much as you love using it.” Jonathan Ive, Chief Design Officer, Apple Inc.

When Apple unveiled the Apple Watch at an event in September of 2014, the company knew that this was an entirely different beast than the iPhone, 8 years prior. No one had a personal connection with their cell phone, and it certainly was not considered a fashion piece. Sure, there were the “luxury” style phones of the flip phone era (the Motorola RAZR comes to mind) but cell phones were certainly not an “expression of personal taste.” You bought a phone to make calls, send the occasional text, and if you were an enterprise user, you had a Blackberry or similar device. They were inherently utilitarian; and style was an after thought. As much as Apple’s statement is ad-speak (it’s a press release, it should be), they are correct in saying that a device you wear is very different from something in your pocket. Ive acknowledged this in his New Yorker interview. “Ive’s position was that people were “O.K., or O.K. to a degree,” with carrying a phone that is identical to hundreds of millions of others, but they would not accept this in something that’s worn.” Designing an elegant mobile device, that is used but not worn or showcased is one thing, but designing products that are worn constantly is something else. “We know wearing something all day, every day becomes as much about personal preference as functionality.” With the first iPhone, Apple set the product apart from others in the market by offering a device that featured especially nuanced functionality, while also being housed in an elegant design piece. The watch, almost echoing Raffaelli sentiment about going “beyond pure functionality,” needed to be fashion first.

At the initial press event Ive plainly stated: “We have worked closely with horological experts from around the world to help us understand the cultural and historical significance of timekeeping and this has profoundly informed our design.” The main input device for the watch is the “digital crown” a oversized, repurposed watch crown that is used for selecting and scrolling through content on the device. With the three collections, case sizes and bands, as well as the pricing structure, there is obvious influence from the traditional (quartz and mechanical) watchmaking world.

The watch is featured in three different collections: Their flagship product, simply titled Apple Watch, has a stainless steel housing like many others in its price range, and a sapphire display, which is a material that is second only to diamond in terms of its durability and scratch resistance. Apple Watch Sport, the cheapest of the three products, which has an aluminum housing and Ion-X glass, the same type of display glass used on the iPhone. Finally, there is the luxury tier model, Apple Watch Edition, with an 18K gold housing and the same sapphire screen. The sizes of the watch, 38mm and 42mm, echo standard watch sizing, and also, much like high end watches, has different sizes that are designed for female wrists, and male wrists (At press events, Apple has discouraged a lot of male journalists with larger wrists from even trying on the 38mm watch.)

The design of the watch itself, a square piece, with a removable band system, clearly took design cues from a number of sources. The two main inspirations, as Ive said himself are the Santos de Cartier, a square watch with a centered dial, which also happens to come in three styles, and the Solaris by Ikepod. Ikepods designer Marc Newson was even brought on by Apple to help complete the design of the watch. Newson’s design, along with traditional style and Ive’s signature Dieter Rams inspired work all converge when it comes to Apple Watch. Along with the cases, Apple is manufacturing and offering a variety of different watch bands, ranging from what they are calling a fluoroelastomer band to a variety of leather and metal bands. Although these are easily interchangeable, Apple is offering each version of the watch with the bands that they think fit best with the design and case material. There are 20 preset configurations of Apple Watch, 10 for Apple Watch Sport, and 8 for Apple Watch Edition.

Almost as important as the case and band designs are the watch faces, which unlike almost every other smartwatch on the market today, are dictated entirely by Apple’s design team, with users only able to customize what Apple is calling complications, or extra information such as the weather or moon phase, to be displayed alongside the watch face. Four of the nine faces that ship with the watch feature analog faces, and all are a light color on a black background. For the digital ones, most still focus on showing the time first. One shows the position of the sun and another a representation of the sun shining on the earth. An important distinction is that the Apple Watch, unlike any other smartwatch, does not let you create your own custom faces outright. I take this as another homage to the horological culture that Ive and his team focused on when creating the product. If you go out and buy say a TAG Heuer or even an Ikepod watch, you cannot open the face of the device and change the watchface, it is married to the overall design of the piece.

The Apple Watch extends the concept that Apple had been working towards in the Jobs era, which is creating computer products that are a natural extension of everyday life and personal lifestyle. The Macintosh attempted to allow the regular person to use a machine, with a graphical interface (a huge breakthrough in the age of MS-DOS), and the iPhone, brought about accessible, powerful and easy to use internet connected communications device to the masses. Finally, the Apple Watch is a computing device that is even more of a lifestyle choice than the kind of home computer you use or mobile device you carry. Having a device that is meant to be worn at all times, (Apple uses the word “intimate” a lot when describing the product) is one of the most natural extensions that can be achieved, while still allowing for pleasing aesthetics.

Much has been made over the seemingly high price of the watch, especially since you need to own the already expensive iPhone to use it. The flagship collection, Apple Watch, has a starting price of $549 for the 38mm and $599 for the 42mm (with the sport band) and increases to $949 and $1000 for the watch and link bracelet. Compared to the price points that TAG Heuer is focusing on, the $1500 to $5000 range, this sits below the low end of that segment, with only the link bracelet model even breaking a thousand dollars. The Apple Watch Edition starts at $10,000 and goes up to $17,000 for what Apple is calling the modern buckle, a leather strap with a gold buckle. For reference, on the low end, the iconic Rolex Submariner starts at $7500, and that is just for the steel version. The full gold versions cost way over $10,000 (in between $20,000 and $30,000.) Even looking at the Apple Watch Sport, the entry level model, the pricing of $350 and $400 for the two sizes also lines up with the midrange of the watch market. Similarly, a mid range watch company like Tissot, has their low end right in line with that $350 to $450 price segment.

Apple has been known for, something named the “Apple Tax,” which has come to mean paying a premium for Apple branded products that contain the same components as its competitors. This started with their computers and now has extended out to all of its product offerings. I think that an extension of the Apple Tax mentality is part of why people are screaming foul at the prices of the watch. Also, if you were to look at the current smartwatch offerings, it would certainly seem like the Apple device is way overpriced, as most fall in between the $100-$400 range. Comparing this to the existing market pricing for similar products would be unfair in this case as Apple has clearly chosen to price their product like existing traditional watches, and not current smart watches. Apple could have made a much cheaper, plastic watch, or even just released an aluminum watch like the sport and priced it to move at around $199-$299, in line with the rest of the existing smartwatch market.

It remains to be seen whether wearable tech, especially the Apple Watch, will be embraced by as large an audience as the iPhone. Smartphones came to prominence in such a short amount of time, and were almost universally embraced, especially after the first few product generations. It would be unrealistic to think that the watch would reach the same level of popularity as the iPhone, but even selling around a million units in its first year (which is has most likely exceeded in pre orders alone) the watch could become a very important product for Apple.

In their branding, marketing, pricing and positioning of the Apple Watch, it is clear the Apple is charging full steam ahead into the wearables market, and by association, the fashion market. With the rise to power of Ive alongside the hiring of Ahrendts and consulting of Newson, Apple is making a very deliberate move to hire people who have tremendous experience with design and luxury fashion. By marketing. branding and pricing Apple Watch alongside of the existing luxury watch market, instead of lumping them with the more utilitarian existing smartwatch options they are not only entering a new product category, but are attempting to appeal to an even wider range of consumers. With the iPhone, Apple created one of the most popular products of the last decade by making an attractive, consumer focused smartphone that is also an easy to use mobile computer. With Apple Watch, Apple knows that the product has to be something that people will want to wear for both form and function.