iWatch may pose challenge to Apple

By Kim Yoo-chul, Bahk Eun-ji

There was a lack of major fanfare about Apple's first smartwatch ― the Apple Watch.

Apple CEO Tim Cook summed up the product’s key challenges at an unveiling event Tuesday, when he said, "We've never sold anything as a company that people could try on before.”

Market research firms and analysts wonder whether the Apple Watch is a fashion statement or a functional device.

Critics say it fails on both counts, which poses Apple with a “smart watch dilemma.”

"If Apple succeeds, other smartwatch makers will benefit from an increased market. If Apple fails to make its case, then the smartwatch category will remain a niche and all makers will suffer," IHS Technology analyst Antonios Maroulis said in a report after the event.

"The smartwatch market is still undefined. We are at a time similar to when Apple launched the iPhone into the smartphone market. All kinds of companies, smartphone OEMs, start-ups, wristwatch makers are trying to catch the eye of consumers," the IHS analyst said.

Apple set the price of the Apple Watch at $349 for an entry model and $1,099 for a premium model. The starting price of the Apple Watch Edition Collection starts from $10,000.

Viewed as a digital device, the new Apple smartwatch is expensive given its limited functionality. The product does offer however mobile payment systems and backs up some healthcare-related features.

Such a high price will make things tough for consumers to buy the new device when it doesn't feel "completely new."

"We expected the Apple Watch to create its own definition of a smartwatch and how it will be able to change people’s life style. But the device is nothing new and the pricing is also higher than expected," NH Investment analyst Sophia Kim based in Seoul said in a separate report.

Son Eun-jong at Hi Investment, another local brokerage, also painted a negative outlook for the Apple watch. "It takes time for wearable devices to be popular as it doesn't provide new services that a smartphone can't. The chain benefit of components for the Apple watch will be limited."

For some, it has some "cool" things like sending messages and tracking heartbeats.

With 700 million iPhone users, the Apple Watch's ResearchKit has the potential to significantly increase participation in medical research while reducing costs in data collection, said analysts.

"This is a significant addition to the medical researcher's took kit, a potential enabler of heightened patient engagement," said Shane Walker, director at IHS.

But officials at the nation's leading manufacturers said the new Apple watch needs to go a long way before making people see it as "really attractive."