by Jean-Louis Gassée

Few Apple products have agitated forecasters and competitors as much as the company’s upcoming watch. The result is an escalation of silly numbers — and one profound observation from a timepiece industry insider.

Apple Watch 2015 sales predictions are upon us: 10 million, 20 million, 24 million, 30 million, even 40 million! Try googling “xx million apple watch”, you won’t be disappointed. Microsoft’s Bing doesn’t put a damper on the enthusiasm either: It finds a prediction for first year sales of 60 million Apple Watches!

These are scientific, irony-free numbers, based on “carefully weighed percentages of iPhone users” complemented by investigations into “supplier orders” and backed up by interviews with “potential buyers”. Such predictions reaffirm our notion that the gyrations and divinations of certain anal-ists and researchers are best appreciated as black comedy — cue PiperJaffray’s Gene Munster with his long-running Apple TV Set gag.

Fortunately, others are more thoughtful. They consider how the product will actually be experienced by real people and how the new Apple product will impact the watch industry.

As you’ll recall from the September 14th “Apple Watch Is And Isn’t”, Jean-Claude Biver, the LVMH executive in charge of luxury watch brands such as Hublot and TAG Heuer, offered his frank opinion of the “too feminine” AppleWatch:

“To be totally honest, it looks like it was designed by a student in their first trimester.”

At the time, it sounded like You Don’t Need This sour grapes from disconcerted competitor. But recently, Biver has also given us deeper, more meaningful thoughts:

“A smartwatch is very difficult for us because it is contradictory,” said Mr. Biver. “Luxury is supposed to be eternal … How do you justify a $2,000 smart watch whose technology will become obsolete in two years?” he added, waving his iPhone 6.

Beautiful. All the words count. Luxury and Eternity vs. Moore’s Law.

To help us think about the dilemma that preoccupies the LVMH exec, let’s take a detour through another class of treasured objects: Single Lens Reflex cameras.

Unless you were a photojournalist or fashion photographer taking hundreds of pictures a day, these cameras lasted forever. A decade of use would come and go without impact on the quality of your pictures or the solid feel of the product. People treasured their Hasselblads, Leicas (not an SLR), Canons, and more obscure marques such as the Swiss Alpa. (I’m a bit partial, here, I bought a Nikon exactly like the one pictured above back in 1970.)

These were purely mechanical marvels. No battery, the light sensor was powered by…light.

Then, in the mid-nineties, digital electronics begin to sneak in. Sensor chips replaced silver-halide film; microcomputers automated more and more of the picture taking process.

The most obvious victim was Eastman Kodak, a company that had dominated the photographic film industry for more than a century — and filed for bankruptcy in 2012. (A brief moment of contemplation: Kodak owned many digital photography patents and even developed the first digital camera in 1975, but “…the product was dropped for fear it would threaten Kodak’s photographic film business.” [Wikipedia].)

The first digital cameras weren’t so great. Conventional film users rightly criticized the lack of resolution, the chromatic aberrations, and other defects of early implementations. But better sensors, more powerful microprocessors, and clever software won the day. A particular bit of cleverness that has saved a number of dinner party snapshots was introduced in the late-nineties: A digital SLR sends a short burst of flash to evaluate the scene, and then uses the measurements to automatically balance shutter speed and aperture, thus correcting the classical mistake of flooding the subject in the foreground while leaving the background in shadows.

Digital cameras have become so good we now have nostalgia “film packs” that recreate the defects — sorry, the ambiance — of analog film stock such as Ektachrome or Fuji Provia.

But Moore’s Law exacts a heavy price. At the high end, the marvelous digital cameras from Nikon, Canon, and Sony are quickly displaced year after year by new models that have better sensors, faster microprocessors, and improved software. Pros and prosumers can move their lenses — the most expensive pieces of their equipment — from last year’s model to this one’s, but the camera body is obsolete. In this regard, the most prolific iterator seems to be Sony, today’s king of sensor chips; the company introduces new SLR models once or twice a year.

At the medium to low end, the impact of Moore’s law was nearly lethal. Smartphone cameras have become both so good and so convenient (see Chase Jarvis’ The Best Camera is the One That’s With You) that they have displaced almost all other consumer picture taking devices.

What does the history of cameras say for watches?

At the high-end, a watch is a piece of jewelry. Like a vintage Leica or Canon mechanical camera, a Patek watch works for decades, it doesn’t use batteries, and it doesn’t run on software. Mechanical watches have even gained a retro chic among under-forty urbanites who have never had to wind a stem. (A favorite of techies seems to be the Officine Panerai.)

So far, electronic watches haven’t upended the watch industry. They’ve mostly replaced a spring with a battery and have added a few functions and indicator displays — with terrible user interfaces. This is about to change. Better/faster/cheaper organs are poised to invade watches: sensors, microprocessors + software, wireless links…

Jean-Claude Biver is right to wonder how the onslaught of ever-improving technology will affect the “eternity” of the high-end, fashion-conscious watch industry…and he’ll soon find out: He’s planning a (yet-to-be announced) TAG Heuer smartwatch.

With this in mind, Apple’s approach is intriguing: The company plays the technology angle, of course, and has loaded their watch with an amazing — some might say disquieting — amount of hardware and software, but they also play the fashion and luxury game. The company invited fashion writers to the launch; it hosted a celebrity event at Colette in Paris with the likes of Karl Lagerfeld and Anna Wintour in attendance. The design of the watch, the choice of materials for the case and bands/bracelets… Apple obviously intends to offer customers a differentiated combination of traditional fashion statement and high-tech functions.

But we’re left with a few questions…

Battery life is one question — we don’t know what it will be. The AppleWatch user interface is another.

The product seems to be loaded with features and apps… will users “get” the UI, or will they abandon hard-to-use functions, as we’ve seen in many of today’s complicated watches?

But the biggest question is, of course, Moore’s Law. Smartphone users have no problem upgrading every two years to new models that offer enticing improvements, but part of that ease is afforded by carrier subsidies (and the carriers play the subsidy game well, despite their disingenuous whining).

There’s no carrier subsidy for the AppleWatch. That could be a problem when Moore’s Law makes the $5K high-end model obsolete. (Expert Apple observer John Gruber has wondered if Apple could just update the watch processor or offer a trade-in — that would be novel.)

We’ll see how all of this plays out with regard to sales. I’ll venture that the first million or so AppleWatches will sell easily. I’ll certainly buy one, the entry-level Sports model with the anodized aluminum case and elastomer band. If I like it, I’ll even consider the more expensive version with a steel case and ingenious Marc Newson link bracelet — reselling my original purchase should be easy enough.

Regardless of the actual sales, first-week numbers won’t matter. It’s what happens after that that matters.

Post-purchase Word of Mouth is still the most potent marketing device. Advertising might create awareness, but user buzz is what makes or breaks products such as a watch or phone (as opposed to cigarettes and soft drinks). It will take a couple months after the AppleWatches arrive on the shelves before we can judge whether or not the product will thrive.

Only then can we have a sensible discussion about how the luxury segment of the line might plan to deal with the eternity vs. Moore’s Law question.

— JLG@mondaynote.com