This is Part 4 of the 5-Part Series, “Why Apple Has Gotten Rotten In The Tech Industry” – Other Competitors and Challenges.
To read Part 1 (Google)
To read Part 2 (Samsung)
To read Part 3 (Amazon)
As has been discussed in the three posts above, Apple is facing stiffer competition on many different technological fronts from companies such as Google, Samsung, and Amazon. This is especially true when it comes to the smartphone and tablet market, where Apple made waves years ago with the original iPhone and iPad.
The problem is that Apple hasn’t been very innovative since that point. Yes, they’ve updated the iPhone and iPad numerous times, some revisions with nice enhancements (such as the iPad 2), but the revisions of late have been of the “ho-hum” variety, which hasn’t impressed customers or investors. In fact, I know more Apple fans often wait a version or two to upgrade, knowing some who are still on iPhone 4s who haven’t upgraded to the iPhone 5 or iPhone 5s (or 5c). In the past, it was quite common for Apple fans who would go grab every new version, but with the prices and the constant “rebooting” of the iPhone every year, but few notable upgrades, most Apple fans think they can wait a version or two before upgrading. This is another notable shift in how people are viewing Apple.
Many people, including noted CNBC commentator Jim Cramer, think that Apple must be more innovative – this is because the technology field has become much more competitive and that the main rivals for Apple have caught up and even surpassed them in technology, as I’ve noted in earlier posts of this series.
Some are excited by the fact that Apple is purported to be introducing a new smartwatch this year, a type of watch that can be programmed in order to answer calls on your smartphone, hold those calls, surf the Internet, and more. While it’s certainly different for Apple to be doing that, what some might even call “innovative,” personally, I think it will take much more than that for Apple to really regain some momentum in the tech industry.
“Why?” you ask.
Well, for starters, Apple was rumored to be releasing a smartwatch last year, but that obviously didn’t happen. In the past, that might have been acceptable, but as I said above, the competition has become much better at matching and outdoing Apple in technology. Samsung already released the “Galaxy Gear,” a type of smartwatch that works with their Samsung smartphones (though it’s purported to work with other Android phones as well). Now, the “Galaxy Gear” didn’t come out to the most favorable reviews, which is why Samsung plans to release a second version of the “Galaxy Gear” in 2014. Early indications seem to suggest that Samsung may release that second version before Apple even releases its initial smartwatch. This certainly doesn’t help Apple’s image of being an innovator of technology when one of its main rivals will likely come out with a second version before Apple even comes out with a first.
However, the bigger problem for Apple in the growing smartwatch industry is not so much Samsung, but by a relatively new company that came out with a smartwatch that has received rave reviews: Pebble. Pebble Technology developed this smartwatch thanks to the help of the crowdfunding platform Kickstarter, and began shipping the Pebble Smartwatch in January 2013, over a year ago. This competitor is not going away anytime soon; besides the fact that most would consider it the leader in the smartwatch industry, apps are being developed for it. In fact, it can communicate with both Apple and Android phones via many different third-party apps.
Thus, Apple (and Samsung, for that matter) has its work cut out for it. Therefore, I don’t think releasing a smartwatch, no matter how favorable the reviews are, is really going to give the company the impetus of being the tech leader again. Certainly, it may raise its standing a bit, could even boost the valuation of the company for a short period of time, but as for that “grand slam” that’s going to put it back out in front of the competition, that’s highly unlikely. At best, it may put itself up there with Pebble and show that it, too, can come up with a solid smartwatch on its first try (something Samsung largely was unable to do), but as for being out in front in the smartwatch industry, that honor has to go to the rising upstart, Pebble.
Other avenues for Apple seem to have a bit more promise for the company in terms of it being considered an innovator again. Two, in particular, come to mind: Its “iBeacon” technology, and rumors of entering the health-monitoring industry. The latter is pretty interesting, and we’ll explore this in Part 5. I bring up the former here because, while it is interesting in its own right, there’s one hurdle that could torpedo much of the momentum from such a technology.
The “iBeacon” technology is one of the technologies that retailers hope to use to learn more about their customer while in-store, and then use that information to provide relevant ads and offers on their mobile devices (usually smartphones) while they’re in certain areas of the store. So, for instance, if you’re in a Target store near the clothing area, you may get a special offer for a new pair of jeans. If you’re in a local grocery store and you’re nearing the frozen food section, you might get a special offer for Van de Kamp fish sticks, etc. Essentially, it relies on push notifications when a person is in a specific area of a store. It runs on Bluetooth Low Energy (BLE), also known as Bluetooth Smart. Certainly, this technology shows a lot of promise for retailers to provide real-time marketing offers to their customers while they are in-store. And, to my knowledge, Apple is the first one to offer such a technology.
The problem that I think will torpedo much of the momentum from this technology was highlighted in this Mobile Marketer article from February 11. There is an upcoming Federal Trade Commission workshop on geolocation to address such technologies as the iBeacon, Bluetooth, Wi-Fi, and others that can track customers while in-store in an effort to learn more about what areas of the store they visit and stay in most often and provide relevant offers based on what’s near-by to them.
The problem comes in where some privacy advocacy groups are claiming that too much information is being revealed because of this technology. One privacy advocacy group even claims that some marketers are even tracking in-store users in order to make stocking decisions based on income and/or race. If true, obviously, this will cause the FTC to “raise an eyebrow” and greatly hinder the information that retailers can gather from this technology, thus negating much of the benefits retailers can get from it, and torpedoing much of the benefits for Apple.
Edward Snowden’s revelations about the NSA certainly did not help Apple when it came to the iBeacon. Nor did the recent revelation that Nordstrom was tracking its customers’ every movement (without their knowledge) when they used the company’s Wi-Fi in-store networks. Nordstrom immediately stopped that practice when it was revealed, thus putting an onus on the collection of too much data.
Thus, it would seem likely that the information the iBeacon system can collect will be limited in scope. While it may still help retailers to some extent, the chances of that information being regulated is likely, and this will limit how much positive benefit Apple will receive from such a technology. Whereas the iBeacon could have been a saving grace for Apple in terms of it regaining much of its former “tech leader” status, the fact that the technology will likely be limited and regulated due to privacy concerns and even racial/ethnic issues, the iBeacon technology will likely only benefit Apple slightly in terms of innovation and ingenuity.
So, again, Apple’s best efforts will likely not provide the “grand slam” it really needs to get back out in front of its competitors in the tech industry. Can Apple even get back out in front of them? And, if they can, what would do it? These questions we will explore in the fifth and final part of this series, “Why Apple Has Gotten Rotten In The Tech Industry.” That post will appear early next week – keep an eye out for it.