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iWatch watch: Apple is not here to entertain you

Jason Snell | April 15, 2014
Apple has only "60 days left to either come up with [an iWatch] or they will disappear," analyst Trip Chowdhry told CNBC last month. "It will become a zombie, if they don't come up with an iWatch."

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Apple has only "60 days left to either come up with [an iWatch] or they will disappear," analyst Trip Chowdhry told CNBC last month. "It will become a zombie, if they don't come up with an iWatch."

It's easy--so very easy--to point at Chowdhry and laugh, because what he says is stupid. But it's worth thinking about why Chowdhry and people who make similar proclamations about Apple (and the tech industry as a whole) are so completely clueless.

The boredom factor

I was recently talking about this with Rene Ritchie of iMore, and we came up with two reasons for the cluelessness.

Reason number one: People want to be entertained. For the past few years, the technology industry has been supremely entertaining. New tech products, even entirely new product categories, that change the way we live? Super-exciting. The iPod, iPhone, and iPad have definitely been those. Steve Jobs was the master in converting the slow, often dull march of technological progress into shows in which world-changing innovation seemed to take place live on stage.

Reason number two: The mindset of the financial industry. If I told you that your company was going to be comfortably profitable for the next 20 years, you'd probably feel relieved that you could pay for your kids' college tuition and plan for retirement. But finance types don't think that way. I'm wary of going down a rabbit hole here, so let me boil it down to this: Financial types want to see growth. Static (albeit massively profitable) companies are boring.

I don't want to argue about what this says about our global financial system--chase that rabbit if you want--but to point out that when you see tech stocks react in bizarre ways (like dropping in value when a company announces record profits or sales), it's because what you consider success often isn't what Wall Street considers success. (It's also because Wall Street trades in futures, not in gold stars for past accomplishments.)

Now let's put those two reasons together: People want to be entertained by dramatic new product announcements and financial types are obsessed with future growth. Perhaps we can finally start to understand why people like Trip Chowdhry say stupid things. A bored financial analyst setting a 60-day Apple Doom Countdown is like a little kid holding her breath until she gets what she wants.

Hey, wearables!

From a pure grab-your-popcorn entertainment perspective, the wearables market is fascinating. (TechHive's Jon Phillips is doing a great job of chronicling it, by the way.) If you're desperate to see a new tech product category that will blossom into something interesting, wearables is a pretty good bet. (Car tech and home tech are also good candidates.) And if you're desperate to find new sources of growth for tech companies, why not focus on new categories?

 

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