I had a vision this morning of where the Apple Watch fits into the bigger universe of things. As I said at the launch, this first version is not what Apple intends to make at all. It will have a highly interested but likely limited audience, and it will make huge margins on the top end of the basic watches plus the premium ones, like gold.
The ultimate form of the Watch comes when it can contain all the sensors and radios of a current iPhone. That's probably within two years — Watch 3. Most of the improvements in battery performance in an iPhone go to power bigger and denser and brighter screens. In a Watch, the power needs for a cellular radio (multiple standards), Wi-Fi, GPS, and MEMS (accelerometer, gyroscope, etc.) will likely be low enough by then and the chips advanced enough to work.
In that view, the Watch stops being an adjunct to a phone, but the pivot point around which the Apple universe turns, which you can see in its use as enabling Apple Pay for some phone models. The Watch becomes:
- The key to your house, that turns off your alarm.
- The tracker of your health, which is already planned in the first release.
- The way you pay, but no longer with a phone.
- The thing you have and thing you are (biometric) for two-step or two-factor authentication.
- The entertainment hub for your car, which no longer needs a radio/receiver unit at all, but just a surface-mounted magnetic charging dock against which you place your Watch while driving.
- What you use to stream and remotely control audio and video to your AirPlay devices.
- How you unlock your Mac or phone.
HomeKit, HealthKit, Apple Pay, AirPlay, CarPlay, Touch ID, iCloud. The Watch is the digital hub around which everything rotates in the new Apple universe.
A phone, a tablet, a car screen, an HDTV, a monitor, a Mac display — these all become the extensions of the same digital identity that the Watch facilitates managing. You may no longer need a phone, but the focus shift from a phone to the Watch as your pivot point. That's the transition Apple expects to make.