SOS Alert: Tap the Brakes on Your Apple Watch Investments

Glenn Gruber | April 17, 2015 | In the News

The allure of Shiny Object Syndrome (SOS) is strong. And whether it be “a-loo-minium” or gold, the Apple Watch is very shiny.

We’re at a very interesting time with Apple Watch, getting very close to its available-in-stores date, April 24th. I for one am intrigued and plan to buy one (if my wife is reading this, it’s a great Father’s Day gift!).

But this in-between period is the witching hour for Apple Watch. We have a sense what it can do, we know which apps will be available at launch. And companies (99.9995% of all companies) who haven’t built an Apple Watch app yet are all wondering if they should begin shifting resources to get one developed.

While at the EyeforTravel Mobile conference, judging the Mobile Innovation awards, I discussed this with key suppliers in the travel sector. Let me distill-down some of those conversations:

Q: Should we shift resources to develop an Apple Watch app?

Outside of fitness apps, the travel sector announced the most Watch apps at the launch event and on the Apple website. This includes American Airlines, SPG, TripAdvisor, Expedia, Uber, OpenTable, CityMapper, Air Canada and Hailo (it looks like Quantas plans on it too). I’m guessing there may be a keep-up-with-the-Jones’ element that comes into play. Stop thinking like that. It’ll only get you into trouble.

The question of whether to build an Apple Watch app has multiple layers. First, consider building build a Watch app only if you can answer these 4 questions in the positive:

  1. Do you have a good use-case?
    Never build anything without a strong use-case or you’re just wasting time and money—two things never in abundance. Be sure you’ve thought through the entire user scenario—identifying need and also determining if it’s plausible to fulfill that need given Apple Watch’s limited screen real estate and interaction. American offers good use-cases (boarding alerts) as does Starwood (keyless entry). Does TripAdvisor? Do you?
  2. Will there be enough users to justify an ROI when you ask for budget?
    Lets put some numbers in perspective. Pebble has sold 1M units in its entire existence. According to a report in Recode, all of Android Wear sold just over 700,000 units in 2014. Let’s assume Apple Watch is wildly successful and sells an order of magnitude more in the first year alone. That would put Apple Watch sales at 7 million units. Now let’s compare that to the fact that Apple sold 74 million iPhone 6 and 6 Plus in the 4th quarter of 2014 and will probably sell over 250 million for the year. In comparison, Apple Watch is almost a rounding error. When you think of your core user and the role you expect Apple Watch to play in your business, ask yourself: do these numbers justify the investment?
  3. What’s the current state of your smartphone app?
    Before you adopt a new platform, be confident you have your house in order. Is your smartphone or tablet app where it needs to be? Air Canada has already launched support for Apple Watch in its latest update but their app is terrible (I could go on about it…they can’t even get the home screen right). I strongly recommend investing resources in your existing app experience before moving on.
  4. Did you build your app in Objective C?
    It’s not a pre-requisite to have a true native app built with xCode and Objective C to build for Apple Watch, but it helps. Some MADPs like Appcelerator and Xamarin provide some level of support for WatchKit but others don’t. For example, it’s not possible to run apps built in Apache Cordova or PhoneGap directly on Watch as it lacks support for a WebView. You need to build native WatchKit extensions and apps. So the question is if you are using a cross-platform development environment like Cordova, does your development team have the skills needed to build native WatchKit extensions and apps? If not, you may have a problem.

Q: Will the introduction of Apple Watch speed up hoteliers’ adoption of keyless entry systems?

Certainly, Apple Watch by its very nature is a better fit for the keyless entry use-case than a smartphone. But if hoteliers are speeding up keyless entry because of the Apple Watch, they need to slow down. As noted above, the number of Apple Watches—even in the most optimistic of cases—just doesn’t support an expedited roll-out, especially at $300-$500 per lock (not per watch).

But there is definitely a trend and strong smartphone use-cases (iPhones and select Android phones) will probably make the deployments worthwhile. This is a 3-Star (and up) issue. And when it comes to Apple Watch, a 4-star (and up).

How quickly will keyless entry happen? Henry Harteveldt—everyone’s favorite travel analyst—expects keyless entry to be commonplace within 5 years. This doesn’t seem unreasonable, but I’m guessing it depends on the franchise contract.

On their own, hoteliers will be reticent to spend $500/room when they’d rather focus on maintaining the carpets, walls, and beds. But hoteliers like SPG and Marriott seem to have taken the most aggressive stance, funding initial rollouts as part of elevating the brand experience (or at least winning the press release). The only hotel with a definitive position was Hilton: “It will take until 2016 for the compatible technology to be installed in the doors of all of the corporation’s 4,200 hotels globally.”

Q: Will Apple Watch accelerate Apple Pay adoption? How soon do you expect to see other hoteliers and airlines (i.e. following Marriott and JetBlue) adopting Apple Pay?

Though I was pleased to see Marriott’s Apple Pay announcement, they focused only on removing the need to present a credit card at check in. Apple Pay is something both airlines and hotels should push aggressively. But the benefits for hoteliers are many.

For airlines, logistical issues make things problematic: using Apple Pay from a window seat, for example (it’s bad enough from the middle). Paying from the Watch versus the phone doesn’t really solve that, nor does it expand or improve on-board products or enhance conversion rates. At the end of the day, buying stuff off a trolley cart from an uncomfortable seat is a poor retail experience and Apple Pay on a watch doesn’t fix that.

Hotels, however—particularly upscale hotels and resorts—are a different story. There are so many more opportunities for Apple Pay to bump up conversion for ancillary hotel products (F&B, spa, golf) that it makes sense to do everything you can to reduce transaction friction and offer customers the ability to pay without having to dig into their pockets or purses. The biggest challenge in encouraging hotels to adopt Apple Pay is whether hotels can enter the data into the folio in order to track guest activity. And right now, that’s just not possible.

What’s your POV?
Any more questions? Ask away in the comments! And please let us know your own company’s plans for Apple Watch.

Glenn Gruber

Glenn Gruber is a Sr. Mobile Strategist at Propelics. He leads enterprise mobile strategy engagements to help companies determine the best way to integrate mobile into their business -- both from a consumer-facing perspective, but also how to leverage mobile to empower employees to be more productive and improve service delivery through the intelligent use of mobile devices and contextual intelligence. Glenn has helped a wide range of enterprises on how to leverage mobile within their business including Bank of Montreal, Dubai Airports, Carnival Cruise Line and Merck. He is a leading voice in the travel sector as a contributing Node to Tnooz where he writes about how mobile and other emerging technologies are impacting the travel sector and a frequent speaker at industry events.

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