Why Wearable Tech Will Be Apple's Playground

Apple Inc. (Nasdaq: AAPL) has an insurmountable advantage in the wearable tech market that will guarantee the company's dominance of this sector for the foreseeable future.

apple Wearable tech - Iwatch

Apple's edge in wearable tech goes beyond the technological advantage the company had with the iPhone in 2007. No, this time Apple's edge is in an area that other tech companies know little or nothing about.

You can see it in the Apple Watch that the Cupertino, Calif., tech giant unveiled on Sept. 9.

Much of the tech world was focused on the features and capabilities of the Apple Watch, musing endlessly about the as-yet-unknown battery life or grousing about the need for the device to be tethered to an iPhone.

What many have missed is the real reason why the Apple Watch will be a blockbuster success, and it has nothing to do with those things.

It's all about fashion.

If you think that sounds crazy, look at what's been happening in the world of wearable technology.

No product so far has proven overwhelmingly popular, and most have flopped.

Even Google Inc.'s (Nasdaq: GOOG, GOOGL) much-hyped Google Glass has faded. Despite being an impressive technological achievement, the device hasn't caught on mainly because people think it looks too nerdy.

That's the most common problem with wearable tech: Regardless of the functionality, no one actually wants to wear this stuff.

That was the blunt conclusion made by Rachel Arthur, the senior editor of digital media & marketing at leading trend forecaster WGSN after checking out the wearable technology at January's Consumer Electronics Show.

"The big gap between what was on show at CES and what consumers will be willing to buy is quite simply design, especially if these companies want to attract female [buyers]," Arthur wrote in The Telegraph.

This is precisely the sort of problem Apple excels at solving - and arguably has done so with the Apple Watch.

This hasn't gotten nearly as much attention as it deserves...

Design Is Crucial to the Success of Wearable Tech

Recognizing that wearable tech absolutely must be fashionable to succeed in the mass market, Apple went out and started snatching up top fashion executives.

In October 2013 Apple announced its recruitment of Angela Ahrendts, who was then serving as chief executive officer of Burberry, a luxury fashion brand based in the U.K.; Ahrendts joined Apple in May of this year. Apple also brought on Paul Deneve, who was serving as CEO of Yves Saint Laurent, in September 2013.

And earlier this month Apple hired Mark Newson, a world-renowned industrial designer and a friend of Apple head designer Jony Ive.

For AAPL, the moves were a natural fit. Under late CEO Steve Jobs, design was made fundamental to Apple's products.

But design is even more important to wearable technology than it ever was to computers, portable music players, or smartphones. No one wants to wear something awkward-looking and ugly, no matter what the potential benefits might be.

It's clear that Apple expended tremendous resources on making the Apple Watch a product people would want to wear simply because of how it looked. The tech functionality is just the gravy.

For one thing, the Apple Watch is much less bulky than other smartwatches. There's even a smaller version to appeal to female buyers.

But it's the amazing attention Apple put into the design and variety of its watchbands that really stands out. For any other tech company, the watchband is an afterthought.

Apple realized that its watch needed to be a true fashion accessory, and that could only be achieved with an array of beautifully crafted watchbands.

Meanwhile, the pricing tiers are structured to make the Apple Watch affordable for the regular guy (the low-end Sport models would start at $349) but are almost certain to venture into luxury watch territory for those who like their wrist wear to make a statement.

Veteran Apple pundit John Gruber believes that the middle line of Apple Watches, which come with a stainless steel watchband and a sapphire face, will jump to $999, and the top line with an 18-karat gold watchband and sapphire face will cost a startling $4,999.

If true, then Apple's wearable tech strategy is not so much about competing with Sony and Samsung, but with Rolex and Cartier.

"Apple is treating wearable technology the way that a fashion house treats an accessories line," Ben Thompson, editor of Stratechery.com, told The Guardian.

Wearable Technology Is Tailor-Made for Apple

It's brilliant, and only Apple could ever make it work.

World-class design has been part of Apple's DNA for a long time; expanding into fashion was not much of a stretch.

What's more, Apple long ago established itself as the luxury brand of consumer tech.

When it comes to wearable tech, Apple's fashion prowess and reputation for building premium products put Apple in a class by itself.

The lack of fashion sense will doom the competition and ensure that Apple takes the lion's share of profits from wearable tech - a market that Juniper Research expects to grow to $19 billion by 2018.

Some believe the Apple Watch is just the company's first of many ventures into wearable tech.

"If you look at the way handbags have become statement items, and your choice of handbag tells the world something about who you are, I suspect that Apple will be going this way with the wearables," Stratechery.com's Thompson said. "They'll begin with two prototype products and later there will more options to follow, and the hope is to create something that becomes as successful as the luxury handbag market."

Follow me on Twitter @DavidGZeiler.

UP NEXT: The Apple Watch is just one of several catalysts that will not only drive the Apple stock price much higher, but eventually will make Apple America's first $1 trillion company...

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About the Author

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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