The 3 key Apple Watch features that nobody talks about. Yet.

[If Apple wants to create a new, large product category out of smart watches, they need to create mass-market demand for their new product. What are the 3 most important features that will define the future of the Apple Watch? The ones that enable developers to innovate on top of these devices and create demand for smart watches.]

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“We believe this product will redefine what people expect from its category. … It is the next chapter in Apple’s story.” With these words, Tim Cook made it very clear that the Apple Watch is more than just an excellent product. As with the iPod, the iPhone and the iPad before it, the Apple Watch aims to shape the future of wearables and create a whole new market reality.

As it stands, the Apple Watch v1 is a nicely designed timepiece, an engineering wonder, but competition will be fierce. Since fashion is about self-expression, by definition, there will be no single winner.

If Apple wants to create something bigger than fashion accessories, the Watch needs to be a functional tool. If it’s a tool, [tweetable]Apple must answer a fundamental question: what is a smart watch for?[/tweetable]

Will notifications become the killer app for smart watches? Unlikely. Not only is it unclear that we really want more interruptions, but it’s a bit of a dead-end for innovation. There can only be so many improvements in notifications, and only so many companies making those improvements.

If Apple wants to create a new, large product category out of smart watches, they need to become something much more that a timepiece with notifications and sensors. Something that allows people to do things that were not possible before. How Apple can do this? By following the same path that worked so well for iPhone and iPad: Tap into the limitless innovation power of co-creators to discover new use cases and possibilities we cannot imagine today.

The most important features of the Apple Watch going forward are the ones that enable developers to innovate on top of these devices and create demand for Apple’s smart watches. What are these features?

WatchKit

WatchKit

The straightforward way to expand the functionality of the watch is the WatchKit SDK, which allows developers to create “watch apps”. Other smart watch players like Android Wear, Pebble and Razer have made similar capabilities for developers. Developers are already showing strong interest in smartwatches. For example, the developer program of Pebble boasts 20,000+ developers and thousands of apps,.

HealthKit

The Apple Watch has a strong emphasis on embedded sensors for fitness and wellness. On the launch event, the company dedicated an entire section on it. Tim Cook: “This is a very important area for me and a very important area for Apple.”

But a few sensors and apps do not make a platform. The real potential lies in the HealthKit SDK that Apple launched at its WWDC event earlier this year. While its not technically a feature of the watch itself, it is this SDK that can take the device’s functionality and expand it in a whole new way to monitor activity and other wellness data . Could it be that the category that Apple wants to redefine is not the watch, but wellness and healthcare (in the broadest sense of the word)?

Certainly several other companies seem to go after that opportunity. Among them Google (Google Fit), Validic, Samsung (SAMI), Human API and most recently Jawbone (Jawbone UP API).

Identity

Like the Nymi wristband, the Apple Watch has all the technology in it to identify you personally. Apple has already demonstrated how digital identity combined with the Apple Watch can be used to make payments or even open hotel doors. (The clever integration with the new Apple Pay can drive adoption for both.) However, the possibilities are much broader. Biometric identification can be the end of not only passwords, but other kinds of ID as well. Another product category for Apple to redefine and absorb into its iOS universe?

Digital identity is a key control point for many digital leaders, including the likes of Google, Facebook, Twitter, LinkedIn and Salesforce. They are all actively working to hold your identity information and build your online persona on their platform. For Apple, the importance of identity is also evident in their deepening integration between devices and in their introduction of fingerprint sensors in all new phones.

Users first

What is a smart watch useful for? Beyond fashion and self-expression, a new kind of health monitoring and identity are prime candidates for the title of killer use case. Apple is going at it with their proven recipe for launching digital ecosystems: users-first. Apple starts by releasing a well-designed device for hardcore fans with a lot of value built in by default. Once there is a critical mass of users, Apple connects them with developers, who create real mass-market demand for the product.

It will take the ingenuity of a community of developers to explore all the possibilities and create a category killer, and Apple knows it very well.

Uber API launch validates the “Gurley scenario”

[With the release of Uber’s API, their ploy to achieve world domination has just gotten a lot more probable. The Uber API allows developers to add physical transport to apps as easily as ads or push notifications. Uber as a TaaS (Transportation-as-a-Service) platform.]

After Uber’s Series D round in June, a captivating discussion ensued about the valuation of the ride-sharing company. In one corner, Aswath Damodaran, the NYU finance professor who literally wrote the textbook on company valuation. In the other, Bill Gurley, considered by Forbes to be one of technology’s top dealmakers, and investor in Uber.

In a blog post, Damodaran summarizes the “duelling narratives” (sic) as follows:

“I viewed Uber as a car service company that would disrupt the existing taxi market (which I estimated to be $100 billion), expanding its growth (by attracting new users) and gaining a significant market share (10%). The Gurley Uber narrative is a more expansive one, where he sees Uber’s potential market as much larger (drawing in users who have traditionally not used taxis and car services) and much stronger networking effects for Uber, leading to a higher market share.”

In short, while Damodaran sees Uber as an attractive company, he doesn’t think it’s worth the valuation used in its last funding round. Gurley, however, sees a market potential for Uber that’s 25x as high. With the release of Uber’s API, Gurley’s narrative just got a lot more probable.

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Uber just outgrew the taxi market

Several commentators (including a Gartner analyst) present Uber’s API as a new channel slash marketing tactic to draw new users to the service. While this is indeed one of the end goals, there is much more to Uber’s API strategy.

[tweetable]Uber can get all the users it needs. To grow to its full potential, it needs new use cases more[/tweetable].

Wherever Uber establishes itself, users flock to the system. Usually, when traditional taxi services become aware of their new competitor, controversy ensues, which leads to even more brand awareness. When taxi drivers went on strike in London in June, Uber saw a 850% rise in sign-ups.

Uber itself say poetically that it targets “every app with a map” (thanks Daniel Pink for unleashing that marketing tactic onto the world). In all seriousness, that little rhyme doesn’t do justice to the raw potential for innovation of a ‘bits-to-atoms’ transportation API. In fact, the release of its API might mark the moment that Uber stops being a taxi substitute and becomes truly an on-demand transportation company across a wide spectrum of user needs. Many of these needs we cannot imagine yet.

[tweetable]The Uber API allows developers to add physical transport to apps as easily as ads or push notifications. [/tweetable]  Uber as a TaaS (Transportation-as-a-Service) platform, following in the footsteps of BaaS tools. This is possible because all of the ‘infrastructure’ that Uber has built over the past year: users, drivers, and the connection between them through the Uber service and apps.

In the blog post that launched the API, Uber explains: “We’ll never conceive of every great idea, and we could certainly never build them all.” They echo Marc Andreessen, who back in 2007 spoke about addressing “countless needs and niches that the platform’s original developers could not have possibly contemplated, much less had time to accommodate.” The current launch partners and the use cases they represent are but a glimpse of where this is heading. When Uber’s network of co-creators gets in full swing, Bill Gurley’s prediction of widely expanding market will become reality, just as millions of apps – many completely unforeseeable successes – unlocked the market for smartphones.

New use cases are currently focused on the transport of people, but the recent experiments with local delivery of household items makes it clear that it won’t stay this way.

Uber wants it all

The second part of Bill Gurleys valuation argument was that Uber is subject to strong network effects, and hence is set up for a winner-takes-all market share. By releasing its API with an exclusivity clause (barring developers from working with competing services), Uber confirms that this is indeed their intention.

Not only has Uber reached critical mass with strong network effects between drivers and riders. It’s now adding a new network effect, between developers and users, which can possibly grow even stronger. One of Damodaran’s hesitations to accept Gurley’s narrative was that network effects between drivers and riders might be local, i.e. only relevant on a city-by-city basis, and without global effect. This is not the case for the network effects between developers and users. Uber has many competitors around the world, but soon only fellow global players will be able to withstand the competitive heat. This explains the haste with which Hailo pushed forward the timing of its own API release, launching on the same day as Uber.

A lot of the new use cases that the Uber API will spawn, will be scenarios that are not traditionally addressed by taxis. What’s more, taxis will not be able to compete by also providing similar services. They simply don’t have the reach (in users as well as geographies) to persuade developers to adopt a taxi-centric, local solution.

Uber wants world domination, and they’re in an increasingly good position to get it.

How to win in mobile without making your own OS

The battle for app ecosystems is over – iOS and Android have won. However, this is not the end of the war for mobile users. VisionMobile’s Senior Business Analyst Stijn Schuermans and Strategy Director Michael Vakulenko discuss how leading ecosystem players like Amazon and Facebook are competing for users without building operating systems.

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The mobile industry is buzzing with new mobile operating system initiatives. Microsoft is betting big on Windows Phone. Intel and Samsung are cooperating on Tizen. Telefonica and Mozilla are leading the Firefox OS effort. The Jolla team (ex-Meego) is touting Sailfish OS. Ubuntu is extending its popular Linux distribution from desktop to mobile. Hundreds of crazy-smart engineers around the world are losing sleep as we speak to create the next big OS.

As it happens, operating system technology no longer matters that much in mobile.
Continue reading How to win in mobile without making your own OS