Apple Watch vs Samsung | The Rise of Apple Watch with Steven Levy (Wired) & Cam Wolf (GQ) | 4

0:06I'm David Brown and this is Business Wars.

0:30If you're an iPhone user, there's a good chance you've got an Apple Watch on your wrist right this very second. It might even be hard for you to remember the days before this smartwatch took over, and now it feels like we're never fully dressed without it, eh? Well, in 2023, smartwatches adorned nearly 220 million wrists worldwide. Apple Watch leads the space with around 32 % market share. Chinese tech company Huawei is in second place with 10%, and Samsung is in a close third with only 9 % of the pie. Apple's quest for domination in the wearables sector doesn't stop with watches. Their futuristic-looking Vision Pro headset that dropped earlier this month is aiming to establish augmented and virtual reality as part of everyday life, not just a sci-fi gimmick.

1:18And hasn't that always been Apple's M.O.? Groundbreaking, stylish technology that people aren't always sure they need, but then decide they can't live without it. Almost a year after being announced, the jury's still out on Vision Pro, but perhaps it could be the next game-changer in Apple's long history of revolutionary product launches. Only time can tell what Apple innovations will stick. And Wired editor-at-large Stephen Levy understands this quite well. He's been covering Apple since the beginning, conducting several one-on-one interviews with Steve Jobs, including a conversation that took place in a pizza shop in 1983, just before the Macintosh was released.

1:59And then when Apple design lead Johnny Ive joined the team, Stephen would interview him regularly about the newest products on the slate. Today, Stephen joins us to talk about Apple's strategy through the years, what the Apple Watch was like when it first hit the market, and its reputation today as one of the most robust health trackers on the market. That is when they're not being sued for patent violations. We'll get into that a little bit later. Also on today's episode, we're diving into the world of watches with Cam Wolfe, senior style writer at GQ. His newsletter, Boxes and Papers, chronicles the latest trends in the watch market, an industry that has surged in popularity over the past few years.

2:39Cam is helping us understand the role that Apple Watch may have played in this, and whether these high-tech timepieces are still the existential threat they once were to the iconic Swiss watch industry. Time to synchronize our watches, because all that is coming up next.

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5:06Stephen Levy, welcome to Business Wars. Thank you. It's my pleasure to be here. We're talking about smartwatches today, namely how Apple changed the game with the Apple Watch. But I want to go back a little bit further to the start of your career as a tech journalist in the 1980s. What was it about the beat that drew you back then? Well, the first story I did about technology was about computer hackers. I got the assignment in 1981. I'd never touched a computer before then. And I went to California and met people who were student hackers and people who were involved in the early personal computer movement.

5:42And I was just blown away by the creativity of the people, the passion, and saw that this was going to be a pretty big deal. So I just decided to write about it more and more and eventually kept writing about it and jobs and books. And now I'm pretty plugged into the scene. Well, you know, you've been plugged in for a long time when you think about it. I mean, since the early days of Apple, you were covering all the players. What did you notice about the culture at Apple surrounding the development of the Mac and Macintosh in 1983? Well, that's one thing that really drew me. I was writing a book called Hackers, and one of the key people in the book was Steve Wozniak, who was the person who built the computer.

6:26And Steve Jobs was involved in design and marketing, the Apple II, which was the thing that drove that company to success. And I was really impressed with Apple because it was the first big company that seemed to follow the values of the counterculture. You know, both Steves were kind of hippies. And it was a different kind of company. And I grew up in the 60s and was really interested in that. And when I went to college, business people were evil. We didn't look at them very kindly. But this was something new. This was something where you were taking a cutting-edge technology and wetting it to the values that we had when we were listening to rock concerts.

7:13So that was super interesting to me. And I spent a lot of time with Wozniak and went to the big rock festival that he funded in 1982. Was it a rock festival? Was that the Us Festival? Am I remembering that correctly? Correct. I covered it for Rolling Stone. Did you really? And because I was hanging out in the computer world, I heard about this thing first. And I said, hey, believe it or not, there's going to be a festival. It'll be the biggest thing since Woodstock. And they hadn't heard of it. And they said, okay, you can go cover it. And it was an amazing weekend. Every 80s band that you could name was there.

7:49Over 100 ,000 rock and roll fans came to DeVore, California to listen to 15 bands make music over a three-day period. The verdict is in. The questions have been answered. And the Us Festival has to be considered a success. Yeah, that was quite an event. That led me to write about the Macintosh when it came out. Right, right. You interviewed a young Steve Jobs over pizza. What a great detail. This was for a Rolling Stone article. And I understand that he had some complaints about the placement of the story in the magazine, as well as an earlier article you'd written about MTV, which I guess he didn't know you had written.

8:27Tell us about that. Yeah, yeah. Well, you know, we were introduced to each other. It was interesting because I had just finished the manuscript for Hackers. I spent a lot of time with Steve Wozniak and some of the people who put the thing together, but hadn't talked to Steve. I had been told he was sort of a prickly person. And he wasn't really a hacker like I was writing about. But this is the first time I had actually meet him. And he just, not even an introduction, he just went into a big tirade about how stupid Rolling Stone was, that they weren't going to put him in particular, in the Macintosh story in general, on the cover.

9:04and he said he called up Jan Wenner the editor and he told him he was making a big mistake and then he saw an issue of Rolling Stone on the plane and he read it and it was like a total piece of you know excrement let's say he said and you know particularly the cover article which is about MTV the worst thing he's ever read and he's going on and on I'm trying to figure out a way to interrupt him and finally he said you know I wrote that article and he kind of went quiet for a minute and then just changed the subject act like i hadn't said anything and you know very interesting so all of this over pizza yeah we hadn't even gotten to the pizza yet we were sitting in the lobby of the bandley three where the big bosendorf piano was uh and hadn't even gotten in his car to go to the pizza yet that's so funny well was he a tough guy to interview?

9:58I mean, clearly he was very opinionated. What was his relationship like with the press? Well, we had a good interview, but the first thing he did when we sat down is he told me how he had been burned by the press. Time magazine had given him the impression that he was going to be the man of the year, but it turned out the personal computer was the man of the year, and they did a story accompanying it about him, which was not very flattering. And he was really wounded by that. And indeed, he would be complaining about that story 20 years later. But we actually had a good conversation. And I kept up with him.

10:37And when I got to Newsweek some years later, and he came back to Apple in 1997, we rekindled our relationship and wound up having a really good professional relationship. And every time Apple came out with a new product, I would interview him sometimes in advance, sometimes right after he did his keynote, you know, did cover stories on him. And we got to be fairly close. When I think of computers, certainly a seminal moment, at least arguably, was the introduction of the Macintosh. So you're talking with him right around the launch of the Macintosh era. And then throughout his life, he kept ushering in these sort of game-changing product releases.

11:22A lot of products were ones we didn't know we needed until they became products that we just seemingly couldn't live without, right? I mean, the Macintosh was transformative for a lot of folks who didn't want to go near a PC. But then you have the iPod that comes along, you know, much later, the iPad, the iPhone. As you were covering some of these iconic keynote unveilings, what was running through your mind as these products were introduced? Were there ever moments where you thought, this will never catch on? Well, it was the opposite with the Macintosh. When I first saw it, I thought, this is amazing.

11:58I've been writing about computers then for a couple of years, and it was by far the most impressive thing I'd ever seen. The iPod, I remember, was right after 9-11, 2001. so I didn't go for that launch, but they shipped one to me. And I thought that was amazing too. Through both the Macintosh and the iPod, I wrote books about them. There were other things that Apple came out with that weren't such big hits. Their first portable computer was a mess. It was super heavy and not very easy to use. I remember. And there were other products down the road that didn't work out. But by and large, they managed to tap into what people wanted, as you say, even if they didn't know they wanted it.

12:44No one was really asking for a little device where you had your whole music library on it. No one really thought to ask for wireless capacity that enabled your computer to get on the internet without wires. but Steve was one of the first to recognize that Wi-Fi was a fantastic thing. They didn't invent it at Apple, but they were the first to build it into a mass market product. It was built at first into the first laptop that they came out with after the iMac. I want to talk about the Apple Watch here because we've just been listening to this battle between Apple Watch and Samsung. After Jobs' death in 2011, his design lead, Johnny Ive, famously carried the torch for the company's innovations, going all in on the Apple Watch.

13:35And I guess lots of folks point to the Apple Watch as the first non-Jobs idea pitched at Apple. And there was considerable pushback from chief software engineer Scott Forstall with Tim Cook making the executive decision to move forward. What do you think the significance was moving forward with a non-jobs idea at Apple? Well, as you know, that was the big question. The question is, how is Apple going to continue the innovation that Jobs brought to the company after he's gone? We knew that Tim Cook was great at keeping the existing product lines going and making the most of them and having the team upgrade the products on a regular basis.

14:21It was super successful at that. And Apple didn't miss a step in building the iPhone business in particular after Jobs left. But people kept asking, well, where's the next big thing that Apple's going to come up with? Can they do it without Steve? And the watch turned out to be the thing that put that to the test. And Johnny Ive took command of that. And it was his vision that helped launch the Apple Watch. And the initial rollout, I don't think was as successful as Apple wanted. I think that the way that they packaged it and marketed it and to some degree conceived it, you know, was off kilter.

15:06It didn't hit the sweet spot. Johnny was very interested in the fashion world. And he was fascinated with the world of high-end watches. So it had very much a fashion component, a luxury component. And as it turns out, that doesn't work very well when you're coming out with an electronic device that, like many computer products, have to be upgraded pretty regularly. So I think what Johnny and Apple got wrong was that part of the luxury component of watches is that they last for years and years and years. And you could say, you know, I have this watch that's passed to me by my grandfather. Right, right.

15:45But no one was passing Apple Watch 1.0 to their grandchildren. They couldn't even pass it to their babysitter. Do you remember the first Apple Watch you got yourself, Stephen? Yeah, I think I had one pretty early on, version one. And I found it useful mainly to bring some of the functions of the phone to my wrist. Not so much talking to it like a Dick Tracy thing, but when you have a notification to take a look right away and be able to quickly respond, I thought that was very useful. personally I found that I didn't really need to update to the latest version every single time. I remember my watch 3 I had for a very long time because it did pretty much what I wanted it to do.

16:31But you know you mentioned that health aspect that sort of seemed to be seemed to crack things open for Apple. Up to that point so many Apple products had been seen as you know sort of moving the high-tech needle in some dramatic way. Was there a version at which you felt like the Apple Watch kind of did that? It had elements of that in version one, but it just wasn't as useful as it later became. To this day, actually, I feel there's elements in the Apple Watch in terms of interface that aren't as smooth as you could possibly have. I mean, there's this crown and there's a button, but it delivers a lot of value.

17:12And what's very Apple-esque about it is really like the beauty of the screen and how it can deliver information. It's very easy to switch the face and add complications. So I think that they figured out what people want from a watch and particularly what they want from a smartwatch and were able to deliver it. It's still not as stunning a product as, say, the iPod or the iPhone. But as smartwatches go, I think it's at the top of the heap. We're talking with Stephen Levy. He's editor-at-large for Wired Magazine. More on the wearables of today when Business Wars returns.

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19:29Welcome back to Business Wars. Our guest is Stephen Levy, tech journalist who's covered the industry since the 1980s, interviewing some of Silicon Valley's most influential people, including Steve Jobs, Johnny Ive, and many others. You know, the wearable market, Stephen, wasn't new when the Apple Watch hit the scene, but quickly became one of the biggest watchmakers in the world. How did the Apple Watch become so popular? What do you think happened there? Well, I think, you know, Apple veered away from this fashion idea and, you know, focused on utility. And they built some things into it, which were things that people hadn't seen.

20:10Not many people had the same thing on their wrist that did the heartbeat and did the notifications there. I mean, you had Fitbits and things like that, but Apple put it together in a package. You could use the apps that you use otherwise. And fitness was something that if you were like a gym rat or an exercise nut, made that an integral part of your routine. And yet, as I'm sure you know and a lot of our listeners know, a bit of irony here in what happened in late 2023. Apple forced to pause production of its Apple Watch Ultra 2 and the Apple Watch Series 9 over this alleged patent violation with a med tech company called Massimo, upset over the blood oxygen monitoring feature.

20:58Apple has since removed that feature from the new watches. But I do wonder, as this moves toward the appeal phase, how this could affect Apple's progress in the health arena moving forward. What do you think? Well, I think Apple has to be careful. You know, Apple's a very competitive company. They're a very tough player. Apple contends that building an oximeter into the watch, essentially, is an obvious idea that there shouldn't even have been a patent, but that gets muddied because they wind up hiring a bunch of people from the company that had that original patent and built their own devices.

21:37I guess if they were being super careful and had a little less hubris, they might've said, you know what, in order to make sure that we're on the right side of the patent angels, we're going to stay clear of that company, go nowhere near it and not be open to a charge that we hired people who took their knowledge to us and used it. Currently in the lawsuit, Apple's claiming, it's like, yeah, we hired those people from that company, but they didn't violate their agreement not to share trade secrets. That's going to be an interesting case to argue. Much more messy in terms of the facts there. A lot of folks are talking about blood glucose monitoring as the next big feature in terms of the biometrics that smartwatches can track.

22:21But as I understand it, in this case, the Chinese company Huawei has already beaten Apple and Samsung to the market on this. How big of a threat do you think Huawei is in this space? Do you think they could ever rise to Apple-level proportions or no? Well, unlike the iPod, the Apple Watch is something that really works best with, you know, almost exclusively with the iPhone. So I feel that in a way, you know, Apple has ceded the rest of the market to others. So Huawei could have a lot of success in the Android world. I don't think it's going to penetrate the iOS world. You know, I've always been a little puzzled why Apple didn't do with the watch, maybe they're planning to, with what they did for the iPod at a certain point saying, you know, wait a minute.

23:15You know, this is something that we should do beyond our operating system, our Mac operating system, and do it for Android. You know, why doesn't Apple come out with an Android watch that does the same things that the Apple Watch does? And that is, I think, for a lot of folks, that sort of seems like a puzzle. I mean, if it's worked as well as it has in the Apple garden, why not? Why do you think Apple's not opening it up more broadly? Yeah, well, with the iPod, it really had to be done. At that point, Macintosh had a very tiny market share, whereas the iPhone market share, though it may not be dominant, of people who would spend$300 to$800 for a watch, they're probably overrepresented with iPhones.

24:04But nevertheless, there's a lot of green fields there, a lot of opportunity of people who, for one reason or another, don't have an iPhone who very much appreciate an Apple Watch. So I don't know what's going on with the conversations they had about that, whether there's a technical barrier. But it seems like something that if you were Apple, you might want to explore. I was going to say, I mean, if you have Samsung trying to nip at your heels, I mean, if Apple were to open up things, you think it could knock Samsung out of the game? I think it definitely would grab a substantial share of the market.

24:42As long as Apple stays out of the Android world, there's opportunities for companies to have a big market without having to take on the Apple Watch head on. Of course, there's also the piece about data, especially when it comes to health tracking. What's the conversation around that right now? Do folks know? where their most intimate personal data is going? And what about safeguards around the distribution of that information? Well, that's a big problem. I just wrote a column about that last week, actually, about how poorly protected our healthcare data is. Maybe you were one of the 10 million people that got a letter, I was, from a company that does medical transcriptions.

25:23And, you know, they were hacked and all information about medical records and hospitalizations and treatments, along with social security numbers and other things, you know, came out there. I don't think it's the watches the main point of vulnerability. The watches don't have really the big cache of stored information about you. All your medical records, the watch might even theoretically aspect would be in the cloud or in data centers of healthcare companies. So I feel that, you know, that's a big problem. But the wearables are part of the problem only to the degree that they gather more information about you.

26:05And that information is going to be part potentially of your record. I don't share my biometrics from my Apple Watch. I don't see the trade-off. To the best of your knowledge, Stephen, that's what a lot of people think, right? Good point. But you have an option of sharing it with a friend to say, hey, I walked so many steps today or got my heart rate up so much. Or even just to share it with the app on the iPhone, which stores in the iCloud, that just keeps a record of that stuff. I think I'd like to keep that information just between me and my watch. Yeah. You know, there's this joke online that when you're done staring at the big screen for work, you'll switch to staring at your little screen, namely your phone.

26:53And if you have a smartwatch, of course, you've got an even tinier screen to help keep you constantly connected. It's a lot. And I think we've already started to hear people pushing back on this, which raises the question, I mean, are we nearing sort of peak smartwatch here? Are we almost over it? Is there a limit to our capacity for these wrist devices? Well, a lot of what a smartwatch does could be done with effective, you know, head-mounted wearables, particularly, you know, what everyone's all looking towards. in the not distant future are a pair of glasses that aren't too much heavier than the glasses that people like me wear or sunglasses that my boss Anna Wintour wears that deliver you the information that you look at your watch for.

27:47So I think you'd have less of a need for a watch if you could get beamed to your eye information, you know, like about the time, your messages, They might even figure out a way by, you know, measuring your temples or whatever, your heart rate or whatever. So it seems to me a lot of what you want from a watch could be done on these head-mounted displays that they're going to be building. You know, I was thinking about where smartwatches might be in, say, I don't know, five, ten years. You think about where we're going with wearables and the potential there. Are we going to be walking around like robots on the streets of New York?