Apple Watch is Selling for $100 Less, but is a New Model Coming?

10 Dec 2015 | Author: | No comments yet »

Apple Watch 2 and iPhone 6C tipped to debut at March event.

A former Food and Drug Administraton official contends the agency’s oversight is getting in the way of Apple’s ability to develop medical products on its iPhone and Apple Watch.That’s according to 9to5Mac, which has heard from people with knowledge of Apple’s plans that the company is gearing up to launch the Apple Watch 2 in March next year before it goes on sale the following month.

Target TGT -0.89% , another major big-box retailer that sells Apple Watch models, is offering a $100 gift card with the purchase of a regularly priced Apple Watch. No new specifications for the smartwatch are outed in the report, but it notes that Apple has been working on new camera, wireless, sleep tracking, and health sensor technologies for the wearable device.

As a result, Gottlieb claims that many app developers will have to come to the FDA first before getting too far. “More than likely, FDA will give its usual advice that most of the complex questions will be ‘review issues’ that the agency will consider later,” Gottlieb wrote. “This ‘we’ll know when we see it’ approach to regulation leaves innovators in perpetual limbo. A new smartwatch apparently isn’t all Apple’s rumoured March event will have in store. 9to5Mac has also heard that the event could mark the return of the 4in iPhone with the launch of the so-called iPhone 6C. It’s a formula for scaring away digital entrepreneurs, who can easily plumb their programming skills in other areas of commerce.” The FDA, however, said its oversight will not be broad and that its regulations will focus on “a small subset of mobile apps that are medical devices and present a greater risk to patients if they do not work as intended.” “This means the FDA does not intend to enforce regulations for the majority of mobile apps that meet the definition of a medical device,” the FDA told in a statement. “We are regulating the functionality of the app based on risk to the patient, not the platform on which it runs,” it said. “The FDA is committed to policies like this, which seek to balance patient safety while encouraging innovation.” In the FDA’s Mobile Medical Applications Final Guidance, it cites examples such as “mobile apps that control medical devices [including] apps that provide the ability to control inflation and deflation of a blood pressure cuff (wristband) through a mobile platform and mobile apps that control the delivery of insulin…by transmitting control signals to the pumps from the mobile platform.” “FDA has said it doesn’t intend to regulate ‘general wellness’ apps and mobile tech, like fitness and calorie trackers. The idea that both Best Buy and Target are offering deals suggests that they’re either willing to swallow the $100 or Apple gave them permission to run a discount, says Wedbush Securities analyst Michael Pachter. “Apple is pretty strict on discounting,” Pachter says. “It suggests that either Best Buy’s taking all of the discount and is willing to forgo future supply of Apple watches, or that Apple is participating in the discount, and the new model is coming.” On Tuesday, Apple-tracking site 9to5Mac reported that Apple is currently planning to hold a special press event in March.

On the specifications front, the iPhone 6C will reportedly pack an A9 processor and an NFC chip under the hood, which means it will come with support for Apple Pay. It won’t come with the same pressure-sensitive 3D Touch technology as seen on the iPhone 6S and iPhone 6S Plus, though, no doubt in a bid to keep its price low. There’s no word as to whether Apple will unveil new Mac hardware at the mooted launch event, but speculation has it that the firm is planning to announce its first 15in MacBooK Air at its Worldwide Developers Conference in June. µ Krouse, an associate at the law firm Krieg DeVault who is part of its Health Care and Business Practice Groups, said one of the most important guidelines is how Apple presents the device to the public. “The iPhone is a device that has applications that may perform … these intended uses, but the iPhone itself is not marketed in such a way that would avail itself to FDA oversight at this point,” he said, in response to an email query.

However, if “Apple developed a device claiming it cured or assisted in preventing a certain disease, this could certainly fall under the purview of the FDA,” he added. And there’s the rub, according to Krouse. “Regardless of the outcome, the FDA must address this issue because the mobile application industry is expanding at an alarming rate,” he writes in a paper entitled “iPads, iPhones, Androids, and Smartphones: FDA Regulation of Mobile Phone Applications as Medical Devices” for the Indiana Health Law Review. “For the United States to remain competitive, the process needs to be more streamlined so that developers within the industry know where they stand,” he concluded. By starting that process now during the busy holiday shopping season, Best Buy (and Target) could be indicating that a second-generation model is launching in March and they’re using the holidays, when demand is heaviest, to rapidly reduce their inventory.

Trip Chowdhry, an Apple analyst and managing director at Global Equities Research, believes that there is little more to the discount than Best Buy trying “to get more customers in-store” and not an indication of a new model. Regardless of the intent, there is speculation that the first-generation Apple Watch has not been the smashing success the iPhone maker had hoped it would be. In Oct., after Cook made his comments, analysts reduced their average shipment estimates for the fourth quarter down to 3.95 million—20,000 units less than they had anticipated in the third-quarter consensus. Nearly 90% of respondents who had stopped using Apple Watch said that they “didn’t find enough value,” while 80% said that its features were “too limited.” Two-thirds of respondents were concerned that the device was “too slow.” Incidentally, the rumored second-generation Apple Watch is expected to address those issues. It’s possible that the $100 discount is simply a way for Best Buy to sell more Apple Watch units, but as Pachter notes, it could also signal an upcoming second-generation model.

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