EU to force Apple changes: Finally What Garmin Needs? A: Possibly
Using the Digital Markets Act, the EU today announced proceedings to force Apple to improve support for third-party smartwatches and other devices.
The first proceeding focuses on several iOS connectivity features and functionalities, predominantly used for and by connected devices. Connected devices are a varied, large and commercially important group of products, including smartwatches, headphones and virtual reality headsets. Companies offering these products depend on effective interoperability with smartphones and their operating systems, such as iOS. The Commission intends to specify how Apple will provide effective interoperability with functionalities such as notifications, device pairing and connectivity. [europa.eu]
It’s clear to most that Apple benefits from its pseudo-monopolistic control within its ecosystem. For readers of this blog, that translates to only the Apple Watch being the “smartest” option when paired with an iPhone. Maybe that’s as it should be—after all, Apple created the market. While some may argue that “people are free to buy other products,” that line of reasoning likely won’t hold much weight with the EU Commission.
I’ve been bearish on Garmin’s long-term prospects for a few years, largely because a Garmin watch can never be as smart as the Apple Watch. Garmin has made continuous improvements, most recently with the launch of the Garmin Fenix 8, which added features like Siri control, basic voice commands, and enhanced audio playback. However, there are limits to what Garmin can achieve. Yes, it can display notifications, but it can’t access iMessage. A Garmin watch might function as a client device for Apple’s FindMy network, but it will never be able to locate other devices without an iPhone.
Currently, the Apple Watch is becoming both smarter and sportier. I believe this will eventually allow Apple to capture a much larger share of the market from Garmin, potentially forcing Garmin to shift away from its currently profitable business model.
So far today, Garmin’s share price rose by half a per cent but the NASDAQ rose by 1 per cent
The EU has already forced Apple to move to generic USB-C cables…but that’s hardly been an earth-shattering event.
What Might Happen
The EU is going to tell Apple what to do. Apple will appeal as far as it can. Apple will eventually lose to some degree and implement changes.
The impact of today will be down to what those changes are. with a fair wind, Garmin and others could get lucky and be allowed access to iMessage in 2-3 years.
That seems like a relatively big deal today but, of course, in 3 years’ time Apple will be well into the next generation of wearable hardware and its sports-related software will be incrementally better. But the real talk will be around Apple Intelligence and I’m betting that Garmin will be excluded from Apple’s version of that.
What do you think?
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Until and unless Apple decides to extend battery life beyond 12 or 18 hours, Garmin will continue to hold on to the majority of it’s market share on its gps/smart watches regardless of messaging, etc. With almost every Garmin watch touting 7 to 31 day battery life that advantage over Apple will continue to provide them sales. Apple will never delve into MIP based displays so Garmin will continue to own that market though that market is shrinking. Likewise, Apple will never adopt Ant+ and therefore will never challenge Garmin in the cycling world at any competitive athlete level. Garmin is financially sound but Garmin knows that they will never have Apple’s market share or cash. So, this is Apples to Oranges(Garmin), so to speak. Regardless whether Garmin gets imessaging, they will continue to control the niche they are in, at least for the near long term.
and yet the Apple watch is the best selling watch ever…
you are right but only for a certain demogrtaphic. Definitely there will always be people who need 50 hour GPS battery lives…but how many? (A: tiny amount) Apple Watch is going to have official battery lives of 18 hours for at least the next 3 years. Maybe Watch Ultra will be different but even now that’s a perfectly fine product for weekend warriors.
ANT+ : fair point. Like you I very much prefer ANT+ but now that sensors often have 2 or 3 BLE channels it negates the ANT advantage for most people. The vast majority people are fine with BLE except those with legacy products or those who like an easier life! (me!).
Garmin has $2billion of cash in the bank. so, yes they are financially sound. That’s not enough to buy a world-leading phone ecosystem though. they’d need a trillion dolalrs for that (the value of Apple)
Yes the SMART and FITNESS and SPORT and ATHLETE markets were relatively distinct but with each year they overlap more and more. That’s what I’m talking about. You’ll see more people saying the same thing in the comments on Ray’s site.
I think that Apple should have provided APIs to interact with messages forwarded from the phone a long time ago and if the EU kicks them into doing it that is a good thing, but I don’t think they can be forced to allow 3rd party devices to be direct iMessage network clients. For myself, I have all “smart notifications” turned off on my watch and almost none on my phone or computer. Notifications are evil.
Until two years ago, Apple basically made one watch that has a very distinctive retro-future 80’s design. Now they make the Apple Watch and the Apple Watch Ultra. Both have extremely limited battery range and a particular opinionated design. Apple Watch is an iPhone accessory and is likely to remain so for the foreseeable future which limits the worldwide addressable market to about 25% of smartphone owners — essentially the wealthiest 25% though. Apple is probably the default choice for anyone with an iPhone.
I think there is a natural saturation limit for just 2 designs of watch or anything that you actually wear on your body. Although given the popularity of airpods maybe I’m wrong about that. Hmm.
Garmin has a different strategy.
I am fairly bullish on Garmin long-term. The market for watches is large. Garmin has a range of designs for different aesthetics and occupies a reasonable niche. They have a number of niches where Apple barely attempts to compete:
– Very high end: Marq
– Cheap: Lily, Vivo
– Very sporty: Forerunner
– Expensive hobbies: Fenix, Enduro, Descent, Tactix, Quatix, Approach, D2
The forerunner, marq and fenix (and sibling) SKUs all share essentially a common platform and capabilities. Any smart sports sensors that exist in the world integrate with this ecosystem. Any sport you might be into has a special mode with niche features that Garmin supports. The battery life ranges from good to mind-boggling.
This is a lot of SKUs but it’s more like a traditional watch company like the Swatch Group that makes a bunch of models with shared parts from plastic fashion watches to midrange like Tissot to more prestige brands like Omega and Breguet.
Garmin is going after a lot of niche people. Apple is targeting another sale to Apple customers. The latter is clearly a better business but there is money in the former.
Google and Samsung and similar tech companies that are not Apple have not shown that they can build and sustain a watch ecosystem.
I think Coros can continue to exist as a budget but quality brand. Suunto has a chance.
Polar, I am bearish on.
yes to all (as always Brian 😉 ) I don’t think it especially contradicts anything i’ve always said?
“Garmin is going after a lot of niche people. ” not quite. they are going after all the niche people and get more than their fair share of all of them. however i contend the majority of garmin buyers are WANNABE niche. my example of weekend warrior vs amazonian explorer OR first time triathlete vs age group triathlete. All those 4 groups will buy garmin on the whole…only the last of each pair ‘need’ to buy Garmin. they are the two true niches that Apple will NEVER target. but as we’ve seen with Watch Ultra they definitely target the first and do a good job…branding, word of mouth etc etc and a lot of other things have gone into making garmin what it is today.
It’s *NOT* a house of cards, but access to smart features is a foundational issue.
“Notifications are evil”
I’m curious, would you please elaborate?
I can elaborate from my point of view (not sure if it’s the same case for another Brian).
I don’t use notifications at all for anything except calls, Viber app (which we use to text in a family circle, so it is relatively important) and calendar. No any other app on the phone is allowed to make sound/vibration, only silent popup. Nothing of those shows up on my old FR. Why? Because I simply pick up the phone, when I have time (a couple times a day) and peruse those notifications.
I don’t see absolutely any value in getting notifications from email or anything else. I think simple: want to talk to me – call me. For text it is ok to respond in 24 hours, low prio.
I also despise all people, who text with “Hello!” and then wait for a response. Come on, write what you want in detail and _then_ wait.
Darau – That makes sense, I figured something like that might be the case (i.e.notifications are too intrusive) but was curious if it was any other reason.
Apple’s solution so far has been to remove features in the EU rather than be forced to comply with the DMA by opening them up. Just look at what’s missing in Europe from iOS 18 (iPhone control from Mac) and iOS 16.1 (AI)…
agreed
let’s see what the EU comes up with. To me it read like the EU was addressing core aspects of the ecosystem.
i thought you could control the iphone from the MAC? my 15 pro screen defintiely appears on the MAC (that’s a newish thing tho IIRC, i dont really use it)