Ben Bajarin on two possible scenarios for the upcoming smart watch market.

Scenario #1:

Apple had a near monopoly on the iPod/MP3 market. We can see a similar scenario playing out where Apple effectively “iPods” the smart watch category, maintaining dominant share over the next five to seven years. While the early success of the iPod was driven by Apple releasing iTunes for Windows, we don’t see the need for Apple to support other platforms in order to hold sway over the smart watch category. Apple’s existing iPhone customer base is large enough to keep it the foremost smart watch vendor and their smart watch platform as the reigning one in the smart watch category.

Scenario #2:

Another possible scenario is the smart watch category shapes up very much like the smart phone category. Apple succeeds at their goal to acquire the top 20% of the market and rake in the majority of the profits. While Android Wear, or another third party licensable smart watch OS, provides the software platform to the vast majority of hardware companies making smart watches.

In this scenario, the vast majority of Chinese and Hong Kong produced smart watches adopt Android Wear (or something else) and flood the market with very low cost smart watches. Also in this scenario, Swiss watch makers competing in the sub $1000 watch market start making smart watches because Apple Watch cannibalized nearly all the sales of Swiss-made watches in that price range.

I think Apple Watch will take 3-4 years to become a mainstream hit, but I don't think it'll be as huge as the iPod because it's currently designed to only work with iPhones. (Maybe in a decade we'll see Apple Watch mature into a legit standalone device, but let's not get ahead of ourselves.)

My big question is: will Android Wear ever appeal to enough women to become mainstream? I just can't imagine women buying into low-cost smartwatches. Well, maybe fitness bands. But most mainstream women don't wear fitness bands all day.

Either way, I'm bullish on smartwatches as a category and I'm bullish on Apple becoming the leader. Recruiting and convincing all of the right people in fashion, fitness, and medical industries will make all the difference.

Austin Carr, Fast Company:

And team members simply could not imagine truly useful applications for Dynamic Perspective. As far as anyone could tell, Bezos was in search of the Fire Phone’s version of Siri, a signature feature that could make the device a blockbuster. But what was the point, they wondered, beyond some fun gaming interactions and flashy 3-D lock screens. "In meetings, all Jeff talked about was, ‘3-D, 3-D, 3-D!’ He had this childlike excitement about the feature and no one could understand why," recalls a former engineering head who worked solely on Dynamic Perspective for years. "We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one."

This is the exact type of client I hate working with. The type that fixates on specific features instead of focusing on building solutions or achieving goals.

AppleInsider:

Now Android fans are probably already thinking, "well with an Android device, I can add an SD Card for more storage!" In fact, that's what Samsung itself recommended Galaxy S4 users do in early 2013 to make up for the fact that Android and bundled apps were wasting nearly half the available advertised storage.

However, SD Cards don't work like built-in storage; they're more like a floppy drive. They offer no security because they use Microsoft's FAT file system, which does not support file or user permissions, enabling any rogue app to read and steal personal data and making it far more difficult for end users or enterprises to secure their devices.

SD Card's lack of file and user account security—along with the related problems of potentially removable storage in a mobile device (there are many)—prompted Apple to never rely upon SD Cards for memory expansion on its iPods and iOS devices, even though it did make it possible to use external SD Cards with iPods, Macs and iOS devices via USB.

Google initially supported internal SD Card slots to help make Android devices cheaper, but the security and usability issues finally prompted Google to remove SD Card support in its 2013 release of Android 4.4 KitKat.

After installing KitKat, Android users found that their SD Cards no longer work, or can only be used in very specific ways, not as general purpose storage for things like apps and the user's photo library. Users who bought a Galaxy S4 and took Samsung's advice to make up for lost storage via SD Cards were subsequently left SD-out of luck.

I remember constantly hearing two arguments against Apple for omitting SD cards:

• "Apple is greedy and just scams everyone into buying the more expensive models!"
• "Apple doesn't innovate! They can't even put SD cards in their phones!"

The reality that these deaf ears refuse to understand: Apple always has and always will prioritize battery life and security for their mobile devices.

Jeremy Horwitz, 9to5mac:

Where will the Apple Watch fit in Apple’s history? Today alone, we’ve seen predictions ranging from “2015 is the year of the Apple Watch” and “could change the way people live” to a somber prediction that it won’t be “the homerun product that iPod, iPhone, and iPad have been.” Similar opinions have been circulating for months.

After reading both dire and overenthusiastic predictions, as well as measuring demand several months out from the release, my belief is somewhere in the middle: the Apple Watch will do better in its first year than the first-generation Apple TV, falling somewhere between the first-generation iPhone (6.1 million units, below Apple’s target of 10 million) and the original iPad (14.8 million units, wildly surpassing most estimates). The iPhone is huge now, but it wasn’t a “gigantic hit” in its first year, while the iPad roared out of the gate and has stayed pretty strong since then. Below, I’ll explain why I think the Apple Watch will wind up between them.

I think the Apple Watch will be a slow starter for the first three years, and then catch fire in its fourth year, much like the iPhone 4.

As for the competition? They won't come anywhere close until they realize they have to think fashion-first like the Apple Watch, not gadget-first.

AppleInsider:

The complaint was filed in a California court on Tuesday on behalf of plaintiffs Paul Orshan and Christopher Endara. The suit alleges that Apple failed to disclose to consumers that as much as 23.1 percent of the advertised storage capacity of an iPhone, iPad or iPod touch would be consumed by iOS 8 once the upgrade is installed.

The suit alleges that "reasonable consumers" would not expect such a discrepancy after updating their device to the latest operating system.

Interesting that out of all the smartphone manufacturers, Apple is the first one to get slapped with a class-action lawsuit on this. Historically, iPhones have been the most generous compared to the competition.

But looking at the big picture, actual storage capacity for all products should be clearer for all consumers, and I hope such lawsuits will improve the entire industry.

Thanks to Gruber for pointing out this gem from April 2011:

Importantly, it's not a question of which platform [Android or iPhone] is "better." (This is irrelevant.) It's a question of which platform everyone else uses. And increasingly, in the smartphone market, barring a radical change in trend, that's Android.

So that's why Android's gains matter. And, yes, Apple fans should be scared to death about them.

Fast forward 3.5 years to today. Re/code:

While Android continued to gain market share in the global smartphone market, it saw a significant drop on another key metric: Profits.

Analyst Chetan Sharma estimates that global profits in the Android hardware market for 2014 were down by half from the prior year — the first year that there has been any significant drop.

And then Sharma nails it home:

“It is important for Google that the ecosystem stays healthy and balanced. Without profitability, some of these players will eventually disappear and it will primarily become a Samsung + Chinese OEMs ecosystem, which is probably not what Google wants.”

Moral of the story: market share is a superficial number that doesn't tell the whole story. What's the point of gaining market share if it doesn't help your business sustain itself?

Out of all the first-gen Android Wear devices, I like the Moto 360 the best because it actually looks like a watch (albeit a big, masculine watch that looks good on big guys like me but not for most mainstream consumers). But what I find interesting about Motorola's two ads is how they're promoting the not-so-silent vibration mode as a marketable feature.

I think a vibration sound is annoying. Just ask my puppy who freaks out every time he hears my Pebble vibrate.

Apple Watch's "Taptic Engine" is completely silent and according to bloggers with first-hand experience, it literally feels like someone is tapping you.

In the next decade or so, I believe the smartwatch will replace the smartphone (and even the PC) for most of our everyday tasks. This vision, however, will require a total reimagination of the user interface; specifically, inputting data.

Samsung understands the vision. Unfortunately, they have no idea how to get there.

What they've done here with the Gear S is taken a smartphone and shrank it down to the size of a wristwatch. Who cares if a wrist-size keyboard won't work in the real world. A smartphone on a wrist sounds pretty cool, right? Keyboards worked on smartphones so obviously they'll work on the wrist, right? The Apple Watch won't have a keyboard but the Gear S does, so that makes the Gear S superior, right?

This is a perfect example of what happens when companies just say "yes" without understanding "why".

Patrick Salyer:

Consumers have been longing to get rid of passwords for years. Ad nauseam, we’ve heard the clamors for the end of passwords because of the deluge of usernames and passwords we have amassed and the inherent security issues and frustration they create. Imagine never needing to create another user name or password again for any site or app by using your Apple ID. That’s what Touch ID promises.

Ultimately, Touch ID and Apple Pay are proxies for Apple ID, which is becoming paramount to what is sure to be a strategy to overtake other identity providers.

Consumers will love using Apple ID for authentication on sites and apps because of the seamless experience – imagine being able to authenticate quickly not only at point-of-sale systems and mobile apps using your thumbprint but also on third-party sites just by having your phone in close proximity to your computer.

Businesses, or relying parties, will love it because they’ll get more registrations, identify more customers across devices, and have lower shopping cart abandonment. Apple, in turn, will establish more permanence with users, further entrenching them into the Apple ecosystem.

I've believed the exact same thing since TouchID was announced.

I've also been bullish on the Apple Watch being key to killing passwords.

TorrentFreak:

While it’s been fun and games for a while, makers of some of the world’s most expensive and well known watches are now targeting sites offering ‘pirate’ smartwatch faces in order to have digital likenesses of their products removed from the market.

TorrentFreak has learned that IWC, Panerai, Omega, Fossil, Armani, Michael Kors, Tissot, Certina, Swatch, Flik Flak and Mondaine are sending cease and desist notices to sites and individuals thought to be offering faces without permission.

I'd love to see the day these luxury watchmakers design official smartwatch faces and sell them online (at a premium). Hell, they could even design limited edition watchfaces and sell a fixed number of them. I'd personally throw down money for an official Panerai face.

If people are willing to spend on trivial things such as stickers for chat apps or epic beasts in World of Warcraft, why not embrace the digital marketplace?