Market Insight

Apple Watch apps extend rather than replace iPhone experience

May 01, 2015

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IHS analysis of the top performing US iPhone apps shows that Health & Fitness services have been quickest to market with Apple Watch apps. Based on analysis of the top ranked apps in major app categories, IHS found that five days after the Apple Watch launch 38% of the top 100 grossing and 29% of the top 100 free US Health & Fitness apps were compatible with Apple’s new smartwatch.

The next best performing categories were Lifestyle, Weather, and News apps. Games, Photo & Video and Entertainment were among the app categories with the lowest proportion of Apple Watch compatible titles in the top ranked charts.

Overall an average of one in five of the top performing free, paid, and grossing iPhone apps are Apple Watch compatible.

Our Analysis:

Apps are crucial to smartwatch success

More than 3,500 Apple Watch apps are now available. The strong performance of Apple Watch compatible apps at the top of the charts shows that Apple has done a good job engaging developers to make their content compatible in time for launch. Providing a compelling app experience is crucial for the success of wearable devices. Apps make smart devices smart.

Apple Watch apps extend the smartphone app ecosystem rather than replace it

At launch all Apple Watch apps are run from the iPhone and delivered via the iPhone App Store. The top ranked apps are all existing iPhone apps that have been updated to provide Apple Watch compatibility, rather than a standalone experience. In this context, Apple Watch extends the iPhone app experience rather than replaces it. This means it will not necessarily drive additional downloads and revenues because users may well already have the apps installed on their smartphones.

Health & Fitness success may not be enough to drive mainstream adoption

Across all wearable devices, Health & Fitness has been the leading app category so it is not surprising that the category has taken an early lead on Apple Watch. To reach a mass market opportunity, smartwatches and wearables must offer more use cases and experiences to avoid being just a niche, albeit a potentially large, product category. Smartwatch apps are unlikely to mirror the smartphone app success story which has been driven by games. There are smartwatch compatible games – but these are often customised versions or extensions of existing smartphone games and so will not grow the overall mobile games market. 



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