I am going to touch on a theme that I have always sensed since I started to do marketing. That is the fate of “sandwiched products”, or products that are positioned in the middle of the market.
When Steve Jobs introduced the iPad, he was very careful and deliberate in describing the problems of a product in the middle.
Steve Jobs says, “Is there room for a third category of device in the middle? The bar’s pretty high. In order to create a new category of devices, those devices are going to have to be far better at some key tasks.”
He clearly acknowledges that creating a category of device in the middle is hard. Steve should know. He introduced the very simple product matrix, had great success, but subsequently succumbed to the temptation to put something in the middle; the ill-fated G4 Cube. Steve knew more than anyone else that products in the middle are hard.
In retrospect, when we look at the declining sales of the iPad, we can clearly see that the problem it is having is that there is no longer room in the middle. The iPad is being sandwiched by the smartphone on the one side and by the PC on the other. In particular, the improvements on smartphones are squeezing it out.
The interesting thing is that the Apple Watch is in a very different situation. Although one can draw parallels with the iPad, for example, the lack of carriers and a subsidy structure, that isn’t the most important difference. What is most important is that the Apple Watch is not sandwiched. It is totally free to explore a new dimension of computing without bumping into any significant competing category. Since it is exploring a new frontier, convincing customers of the benefits will be harder than the iPad. However, once it does convince customers, it will have the market totally to itself.
Simply put, the upside of the Apple Watch is much higher than the iPad. The iPad is now struggling to find a new niche that is not in the middle of the smartphone and PC. The Apple Watch will not have to do that. If it takes off, and data suggests that it already has, it has a broad frontier all to itself.
Sandwich products eventually get squeezed. Products at the frontiers do not.