WWDC 2018 was held yesterday, and the Apple team announced a wide range of new features across the portfolio of Apple platforms: Apple TV, iOS, MacOS and WatchOS as they always do each year. It’s always a bit of a challenge to determine which of these features, if any, is going to change the game. After all, it is Apple. We expect innovation, and the bar is set very high for this icon of “disruption.” We can appreciate that Apple is driving the Privacy First agenda of our digital future on the backs of GDPR and the Cambridge Analytica debacle with the application of AI to protect your online privacy. We can appreciate Group FaceTime very much, but Google Hangouts was there first. Memojis are fun, but they are not going to shake the foundation of the ICT (Information Communications Technology) industry. What is the neXt Curve take on the feature that will matter? Walkie-Talkie.
A Step Toward The Next Big Thing
We believe that the Apple Watch represents a significant step change toward what could very well be the next big thing, so we have been keeping an eye out on it and how it has been evolving since its introduction in 2015. The Apple Watch has experienced significant growth with Tim Cook announcing 50% year over year growth in units shipped with Canalys estimating over 3.8 million units sold in Q1 of this year representing 43% of smart watches shipped. As the Apple Watch installed base continues to grow, the smart watch will become a device category to reckon with.
The Walkie-Talkie feature positions Apple Watch as a catalytic force with the potential to change the way consumers communicate, elevate the smartphone/wearables device category, and shift the economics of traditional voice and messaging services for telecommunications operators. This feature is a simple yet powerful complement to the LTE feature introduced last year with the Series 3 Apple Watch, which was initially panned for delivering short battery life when used for mobile calls. With its focus on family and friends, Walkie-Talkie has the potential to displace a significant degree of voice and messaging usage away from traditional voice and messaging platforms, especially if Apple promotes the feature across it’s device/platform portfolio.
Rather than using iMessage as its communications platform, Walkie-Talkie leverages what appears to be a half-duplex variation of FaceTime Audio, Apple’s OTT voice platform that is available and integrated across Apple’s platforms. This suggests a number of potential benefits for consumers, including lower data consumption and power consumption versus a full duplex FaceTime Audio session, and enhanced privacy secured through end-to-end encryption.
Walkie Talkie: Taking Apple Watch to the Next Level
Here are our thoughts on the implications of Walkie-Talkie on the smartwatch market and its potentially transformative impact on our digital future and the greater ICT industry.
- Asynchronous Consumer Behavior – Walkie-Talkie will introduce a new form of asynchronous OTT communication that delivers what consumers like/love about texting and voice communications in a new communication experience that will shape user behavior going forward. The adoption of Walkie-Talkie will likely accelerate as the feature is introduced across the Apple portfolio of platforms and the 1.3 billion active installed base of iOS devices.
- Smartphone Complement to Substitute – Walkie-Talkie enhances the Apple Watch’s untethered utility by providing one-to-one asynchronous voice communications with the option of making conventional voice calls when you really want or need to speak to someone in a synchronous, real-time fashion furthering Apple Watch’s (in combination with AirPods) progression toward becoming a smartphone replacement.
- Even More OTT Communication Options – Walkie-Talkie adds to an already crowded field of options consumers have to communicate with each other, which will further divert consumer and enterprise use of traditional voice services toward OTT (Over The Top) voice services. The substitution impact will be amplified if or when Apple makes the Walkie-Talkie feature available across its mobile devices such as the iPhone and the iPad.
- New Traditional Telco Service Economics In An OTT World – Walk-Talkie has the potential to exacerbate the OTT threat on the economics and value of traditional voice and messaging services offered by telco carriers and the network infrastructure that they operate putting additional pressure on operators to accelerate their digital transformation.
Implications for Business Leaders
- Enterprise IT leaders should consider the impact of Walkie-Talkie and the inevitable emergence of similar asynchronous voice communications on their enterprise communications services strategy, especially as this feature works its way down the path of IT consumerization.
- Enterprise business leaders should consider how Walkie-Talkie and the inevitable introduction of similar, competing offerings can enable new possibilities in the workplace (in-office, in the field) and how employees interact with each other, with vendors, and with customers. Business leaders should also consider how this new, “hybrid” form of communication may impact their omni-channel and customer experience strategies.
- Network operators should consider the threats and opportunities that Walkie-Talkie presents to their traditional voice business as well as their data business as OTT communications providers such as Tencent, Google and SnapChat begin to roll out their own offerings across consumer and enterprise endpoint devices in the near future. In particular, operators should reassess their investments in the digitization of their voice and presence infrastructure and apply an adjusted lens on the competitive threat that is fast-evolving OTT voice communications.
- Telecom and enterprise network vendors should revisit their product strategies and reset/adjust based on the analysis of the potential portfolio impact and shift in economics presented by the inevitable emergence of asynchronous OTT voice communication services such as Walkie-Talkie.
Contact us if you would like to discuss how neXt Curve can provide unique market insights and perspectives that could be critical for your business and its digital future.
Managing Director, neXt Curve
Principal, neXt Curve
June 5, 2018
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