Why the Apple Watch could completely disrupt the digital watch business

Apple’s track record of disruption is solid. While iPod crushed competitors in the MP3-player space, the iPhone was an even bigger game-changer for the smartphone industry, and the iPad has had significant adverse impact on the PC market.

Apple has already disrupted big consumer electronics markets

In the early years of Apple, Steve Jobs openly admired Sony and wanted Apple to be as dominant and successful in the consumer-electronics market as Sony in its heyday. In hindsight, that admiration and aspiration makes perfect sense as Apple has come to dominate the music, smartphone, and tablet markets. Now, personal computing is just one aspect of Apple’s products: They are also our music player and camera of choice.

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Could anyone have predicted that the iPod would not just dominate digital music but music, period? In less than half a decade, the iPod went from being the preferred way to consume music to eliminating the need for physical media and the devices on which they ran (rest in peace, optical drives). Similarly, the iPhone crushed both the phone and digital camera markets by offering a quality networked camera product, and the most popular camera on Flickr, in fact.

Apple will disrupt the digital watch industry

The digital-watch industry is prime for disruption. It’s a device with which we already have a relationship whose function has been temporarily replaced by our phones. When the watch comes back en vogue as a networked device, it will also redefine how we think of and use it.

Here are the key factors that will make the Apple Watch disruptive:

• The next step in connectivity: The Internet on PCs transformed the desktop computer to a daily-use device. Smartphones put the internet in our pocket and changed our on-the-go lifestyle. With the Internet on our wrists, the implications are huge for the Internet of things.
• Enabling new services: The Apple Watch comes with big features for enabling health monitoring and frictionless payments with Apple Pay. The health and mobile payments industries have yet to embrace mobile internet; the Apple Watch will significantly impact both.
• Massive user base: Apple already has a massive install base of iPhones, iPads, and iPods. During last WWDC, Apple boasted a total of 800 million shipments of iOS devices, which provide Apple with an amazing customer base to upsell new products to.
• iPhone as the hub: Sure, we’ve seen watches that check your pulse, play MP3s, and check email — but those watches were not functional extensions of the most powerful smartphone in history. The iPhone 5s has more speed, memory, and performance than PCs of a few years ago and is the hub of our digital lives. Because Apple Watch will use the iPhone for Internet and connecting to other iOS apps, this creates a great moat for Apple.
• Third-party apps boom: Developers are already waiting in the wings to build third-party Apple Watch apps, offering a robust ecosystem of existing functionality right out of the gate. Messaging, social networking, and real-time information apps will be exceptionally popular with consumers.
• Innovation that fits in an existing product category: Unlike Google Glass, the Apple Watch is an innovative product that’s also socially acceptable to use. It fits into an existing product category that consumers understand.

With an unbroken string of successes in mobile devices, the dominance of the App Store, and the thriving iOS developer community, Apple is again poised to reinvent and dramatically upend an existing consumer-electronics category, in this case with digital watches and potentially health care and mobile payments as well. Watch out, Switzerland!

Ash Kumar is chief executive and a co-founder of mobile advertising exchange TapSense.