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Commentary: Here’s why Apple is chasing the lucrative Ironman crowd

The new iPhone 14 is here, but it is unlikely to set hearts racing. Apple is more focused on pushing its new Apple Watch models and AirPods, says Bloomberg Opinion’s Tim Culpan.

Commentary: Here’s why Apple is chasing the lucrative Ironman crowd

The new Apple Watch Ultra (left) and iPhone 14 are displayed during an Apple special event on September 07, 2022 in Cupertino, California. (Photos: Justin Sullivan/Getty Images/AFP)

TAIPEI: In the seven years since Apple released its first Apple Watch, the device has sold more than 100 million units, catapulting it to 30 per cent of the global smartwatch market. Yet it’s struggled to grab a small but important niche: Endurance sports.

Peruse the start of any Ironman triathlon race and you’ll see Garmin products dominating the wrists of the world’s most elite athletes. These are consumers who spend US$10,000 on a bicycle and travel around the globe to compete at some of the world’s most majestic courses.

But they’ve largely snubbed Apple in favor of multisport watches from the premier name in outdoor adventure and navigation.

The new Apple Watch Ultra the company debuted at an event dubbed Far Out could finally change that. At US$799, the wearable is the most expensive among the models it released Wednesday (Sep 7), including Apple Watch Series 8 at up to US$499 and Watch SE for US$249.

That puts it above most Garmin alternatives favoured by triathletes, yet still cheaper than premium models designed for ultramarathon and rugged environments. The device can also act as a dive computer, putting it in competition with leading names in that category, such as Suunto, Cressi and Aqualung.

FOCUS ON APPLE WATCH AND AIRPODS

Chasing consumers who have expensive hobbies and high brand loyalty is a smart move, and it shows that the company is laser-focused on pushing its non-iPhone products, namely Watch and AirPods.

A new Apple Watch Ultra is displayed during an Apple special event on Sep 7, 2022 in Cupertino, California. (Photo: Justin Sullivan/Getty Images/AFP)

Called Wearables, Home and Accessories (WHA), this category is the only hardware division at Apple to have consistently posted growth in each of the past six years. While WHA accounts for just 11 per cent of sales, far less than the iPhone’s 53 per cent, revenue from that collection of devices has climbed 245 per cent since 2016, compared with 40 per cent for iPhones and 181 per cent for services.

Incremental revenue is only half the story. Making the Apple ecosystem more addictive is far more lucrative than merely ensuring customers upgrade their iPhone every year (or two).

Earphones are a good example. Having an iPhone is more likely to lure a customer to buy AirPods, and the same is also true in reverse - customers are less inclined to switch to a Samsung or Oppo if they already have AirPods and an Apple Watch.

NEW IPHONE 14 IS LESS EXCITING

It also takes the pressure off each new iPhone to have a wow factor that compels fans to line up overnight for the latest accessory.

This year’s release, for example, is unlikely to set hearts racing. A better camera, more powerful semiconductors, and gimmicky always-on displays don’t seem anywhere near as exciting as past innovations like touch ID, haptic feedback or Siri. And that’s fine.

Apple instead spent its launch event focusing on features that the vast majority of consumers will never need, and very few will use. These include crash detection on the watch, and satellite SOS services on the iPhone.

Despite heart-rending videos of customers relaying their experience of lifesaving features of the Apple Watch - one girl used it after a plane crash - safety is probably not a must-have aspect of consumer electronics devices.

Yet in gradually broadening the categories of consumers who find a product that perfectly fits their unique needs, Apple is ensuring that its cross-gadget connectivity is one consumers rely on.

“This kind of integration is something only Apple can do,” Apple CEO Tim Cook declared in the opening to Wednesday’s launch event. And he’s right, which is why Apple will continue to be the brand customers can’t do without.

Source: Bloomberg/ch

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