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Apple Watch Ultra ‘could move the needle’ for the tech giant, analyst says

IDC’s Mobile Device Tracker and Program Vice President Ryan Reith joins Yahoo Finance to discuss the latest products from Apple and what it means for the tech giant.

Video Transcript

BRIAN SOZZI: All right, let's stay on the Apple product barrage. IDC's Ryan Reith is here with us now. Ryan, good to see you. So all the products that our very own tech editor, Dan Howley, mentioned, is there a sleeper product in there that might really move the needle for Apple, besides the new iPhone?

RYAN REITH: Yeah, so good to talk to you again, and thanks for having me on. I think honestly, I think it's the Watch Ultra that he was just referencing at the end that might not be for him, may not even be for me. And the reason why I say this is-- and it comes-- well, let me just start by saying it does come with a pretty significant price point increase. So I think it starts at $799.

The reason why I say that this is a potential sort of needle driver for Apple is that Apple has got almost 50% of the smartwatch market already today. And we don't see that changing going forward. But I think it was Dan mentioned Garmin. They're about 8% of the overall global smartwatch market. And they're ultimately selling to buyers that are, I guess, we were calling them sort of niche. It wasn't your everyday consumer. It's people that are outdoorsy and really try to do more extreme things. But they're willing to pay for this equipment.

So I think that this is a direct play at going after even more market share beyond the 50% mark. We'll see if that happens over time. But I think that's-- to me, that's probably the biggest sort of product announcement yesterday that I think could actually move the needle. The other products are excellent products, by the way. I just want to be very clear. A lot of those we expected. But I think this launch, Ultra, is really going to go after a different crowd. And I'd say watch for some marketing to follow very, very soon to really target that audience.

JULIE HYMAN: Hey, Ryan. Is-- on the phone front, do you think what Apple is rolling out is enough to sort of hold its position against the likes of Samsung?

RYAN REITH: I think so. I don't think it gains more, but I don't think it loses anything. And I say that in the sense of right now, the high end of the smartphone market is really just Samsung and Apple. And I'm not just talking about in the US. It used to be a three horse equation when Huawei was involved, and they're really just not part of that picture anymore.

So I think that they continue to iterate. We've clearly seen that two of the Pro models introduced their next generation of processor. There's camera technology. But let's be honest. For Samsung or Apple, for show me the other brands down the line, it's getting harder and harder to sell these devices because they look very similar to the previous version. So a lot of the upgrades, if you will, are sort of under the hood. So but yeah, I don't think it gains anything, but I don't think it loses anything significantly by any means.

JULIE HYMAN: Ryan, I want to ask about services and specifically a newish service that the-- or new service that the company discussed yesterday, which is this new satellite connectivity, which is sort of a safety service. It sounds like they're going to offer, what, free for two years, paid after that. What do you think the appetite is going to be, particularly when it switches over to being a paid service?

RYAN REITH: Yeah, that's an excellent part of the question. So I think anyone will take anything for free. And I think it's going to take time for people to understand what this actually means. And I'm talking about the average consumer. Even if it's an outdoorsy person that you would go into areas without cell service, it's going to take a little bit of time for people to understand this. So the two years free makes perfect sense.

My opinion is that this is a long play into other things. I think we've seen all this notion of leveraging satellites more for communications, things like Starlink. And they partnered with, I think it's Global Star, if I'm not mistaken, for this project. I look at this as the very first step in what they're looking to do to leverage satellite communications for their devices.

So it's going to take time, but ultimately, if they can build the right sort of consumer understanding and education around what this means and how it could help you down the line, and whatever that service fee looks like when they do introduce it, which they will, I think that they've got to just be cautious about how they play that to make sure that there's traction.

But it's an interesting first step. And it's one we've known, we've been watching. They've been working on with a handful of partners for satellite communications for at least four years, probably longer than that, to be honest.

JULIE HYMAN: Yeah, well, historically, they've been pretty good at letting consumers know what they're up to and convincing them to buy stuff. We'll see if it works this time around. Ryan Reith, IDC Group VP of Consumer Devices, thanks for joining us with your perspective. Appreciate it.