Why Apple Watch and Apple Pay are good news for startups

I felt the full range of emotions as Apple (NASDAQ:AAPL) unveiled its new products: disappointment when its live stream went bust, delirium when CEO Tim Cook played that Johnny Ive-narrated video about the Apple Watch, and finally skepticism after more details came to light.

For tech companies and startups, there’s plenty to digest (our recap can help you with that). This is the most hotly anticipated Apple announcement in years, since new product categories could open up new business opportunities and upset the established order. So the question is, will Apple achieve that, just like it did with the iPhone, and to a lesser extent, the iPad?

Apple Watch offers lucrative opportunities to target the luxury segment

The Apple Watch will not become as ubiquitous or earthshaking as the iPhone. Not in the next few years. The big elephant in the room is its battery life, something which Apple CEO Tim Cook failed to address. It doesn’t come across as something people need either. But it doesn’t matter.

Like the iPad and the iPod, the Apple Watch is a niche product. Apple has sold way more iPhones than these two devices, but if you look at the volume of sales, the results aren’t shabby at all.

It’s way too premature to say how successful the Apple Watch will become. But the product itself offers clues. Unlike the iPad and iPod, the watch is an extension of the iPhone, and an expensive one at the starting price of US$349. So unless it makes some adjustments or offers a sweet bundling deal through carriers, don’t expect too many iPhone users to get a unit, particularly in price-sensitive, middle income Asia.

apple watch is robin to iphone's batman #AppleLive

— David Corbin (@CorbinDB) September 9, 2014

High fashion has no price ceiling

Here are the implications: the Apple Watch is essentially a luxury item, and that means insane profit margins since the wealthy don’t mind shelling more for a bit of prestige and exclusivity. The watch is just as much about the hardware as it is about the software: the design team has put a lot of effort into the look and utility of the body. For example, you can swap straps with just a button press and a push.

The Apple Watch heralds the company’s rebirth not just as a tech giant but also a high fashion brand. Cook’s quip is telling. He calls this the “best watch in the world”, rather than the “best smartwatch”. It’s not just a technology product, but a fashion accessory.

Its Edition variant is lined with 18-carat gold. Buyers can choose metallic straps like the link bracelet and milanese loop, or opt for classic leather.

Apple has the best chance of succeeding in payments

Apple will continue dominating the high-end smartphone tier