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Apple Watch: A Disruptive Innovation or a Chink in Apple's Armor?

Apple Watch: A Disruptive Innovation or a Chink in Apple's Armor?
Case Code: BSTR518
Case Length: 19 Pages
Period: 2011-2017
Pub Date: 2017
Teaching Note: Available
Price: Rs.500
Organization: Apple Inc.
Industry: Wearable Devices
Countries: US, Global
Themes: Strategic Management, Strategic Marketing
Apple Watch: A Disruptive Innovation or a Chink in Apple's Armor?
Abstract Case Intro 1 Case Intro 2 Excerpts

Introduction

Apple, Inc. (Apple) became the world’s #1 wearables vendor in Q1 2017 with an estimated 3.5 million Apple Watch shipments, 59% higher than the shipments in the same period the previous year, according to research firm Strategy Analytics . Apple captured 15.9% of the global wearables market share, overtaking market leader Fitbit Inc. (Fitbit), which shipped an estimated 2.9 million wearable devices during the quarter (See Exhibit I). Neil Mawston, Executive Director at Strategy Analytics, said, “Apple captured 16 percent global market share and overtook Fitbit to become the world’s largest wearables vendor. The new Apple Watch Series 2 is selling relatively well in the US, UK and elsewhere, due to enhanced styling, intensive marketing and a good retail presence.”

Released in April 2015, the Apple Watch was the first new Apple device since the iPad. It was also the first product developed under the leadership of CEO Tim Cook (Cook) and outside the shadow of the company’s founder Steve Jobs. The Apple Watch was a smartwatch that integrated with iOS and displayed notifications like text messages. It could also be used to make calls and supported third-party applications. Though the company did not share the standalone sales figures for the Apple Watch, Cook announced that sales of the device had nearly doubled since 2016. In the year the Apple Watch was launched, the company sold twice as many watches as the number of iPhones it had sold the year the smartphone had debuted...

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