According to Apple, the Apple Watch “represents a new chapter in the relationship people have with technology”. If this is indeed the case, then the Apple Watch SDK, called WatchKit, represents a new chapter for app monetization.
Though word of the new SDK has been floating around for some time, until its release we didn’t know what to expect. Now that the SDK is out, we can make some reliable inferences and projections about how Watch Apps will impact the mobile app marketplace.
WatchKit SDK: How the Apps Work
Since Apple Watches are specifically designed to work with iPhones, WatchKit apps will have two main components: the phone app and the Watch extension. The Watch extension runs on the iPhone, and executes code in response to interactions on the watch itself.
In this way, Apple Watch apps are quite a bit like iPhone apps that use the watch as an extendable interface.
There are three main ways that you can integrate a Watch app with the iPhone:
- Full Watch-Based UI – You can create an entire UI to run independently on the watch itself.
- Actionable Notifications – In this case, your app notifies users and you can offer specific actions or choices. These actionable notifications are simply extensions of existing iOS interactive notifications.
- Read-Only Notifications – You can integrate read-only notifications into an app. These are called “Glances.”
Naturally, your app can choose to use only specific interactive components, or it can use all three.
The Apple Watch SDK page includes Xcode 6.2 with iOS 8.2 beta, WatchKit, a complete set of reference material, interface templates, icons, notifications, and Glances, all of which are designed to help you launch your first app as soon as possible. All programming specifications are included as well. All of these can be downloaded on the WatchKit main page.
The fastest way to get started is by taking an existing iOS project and adding the Watch to your app. This is by far the easiest way to begin experimenting. Simply open your existing Xcode project and add a Watch App target. Extending your app to the Watch will be no different from building your original app, since you will simply be using the same tools you used when developing the iOS app.
When your app runs on the Watch, the interface is loaded from a bundle that contains your storyboard and other static resources. Every time a user interacts with your app through the Watch, WatchKit – which is present on the phone and the Apple Watch – transmits data back and forth to the iPhone in response to those interactions. The result is a seamless, integrated user experience.
Although you can send dynamically generated content to the Watch for display, the UI itself is stored in the Watch App, so you will need to plan your UI in advance.
There are a few implications we can gather from an initial examination of WatchKit:
The Apple Watch SDK makes it easy to jump right in to development. This is clearly advantageous for developers – since Watch Apps simply build upon existing iOS and iPhone frameworks, developers can have new apps up and running in no time. But at the same time, the low barrier of entry means that the Apple Watch marketplace will be flooded with new apps, Watch extensions for existing apps, and more software developers trying to earn money in the new space.
Advertising is still up in the air. Though there are no details regarding the possibility of in-Watch advertising, it is certainly conceivable that the “dynamically generated content” sent to the screen could be advertising. The new interface in itself has several implications:
- In-Watch ads would introduce entirely new dimensions to the monetization funnel, including new metrics and a new user experience.
- In the past, Apple has cracked down on some pay-per-install apps and low quality apps, so it is certainly reasonable to expect similar quality requirements for Watch Apps.
- The most effective Watch-based ads would probably be interstitial, since the screen resolutions are relatively small, at 272 x 340 and 312 x 390.
- Ad content would need to be extremely simple, short, and to-the-point.
Smartwatches are more personal, so monetization strategies will also need to be more personal. It is well known that people dislike advertising, especially advertising that intrudes on their personal space. Done properly, in-Watch advertising could earn lots of money for the right apps, but if it’s done the wrong way, the result could be spectacular flops.
A smartwatch that is on your wrist at all times and acts as a constant alert center has huge revenue potential. To take advantage of this opportunity, developers will need to create closer relationships with their customers. This will mean developing apps that provide on-the-spot notifications based on a person’s needs.
Watch Apps offer new, real-time marketing data that can be used to provide more utility and earn more revenue. With health-based data and proximity-based data that can interact with beacons and geographic locations, there are new opportunities that didn’t exist before. An app that, for instance, notifies a person of discounts or deals when near a certain retailer, could earn commission-based revenue for every customer that follows up on that notification. This ability to respond to real-world data, perhaps, represents the biggest monetization potential of all.
While some specifics around this wearable remain unknown, some implications are clear. The new screen space will be a more personal, more sensitive extension of the iPhone. With more marketing information to draw upon, developers and advertisers could earn more revenue by presenting highly personalized ads, offers, and other monetizable interactions.