Apple's "iWatch" is much more likely to arrive this year than an Apple TV. I've been avoiding the iWatch hype for the same reason I ignore the yammering about Apple building a television: Apple works on a lot of projects that don't see the light of day, and what's important to me is what people will actually get to buy.
But with respectable news organisations like The Verge and Bloomberg weighing in (see our report from earlier today), I have to say that the iWatch fits Apple's pattern of new markets to join, and it looks like the next 12 months are the prime time.
Apple must keep moving forward. The company's successes have been driven by helping to establish new mass-market product categories: The home PC (1977), desktop publishing (1985), MP3 players (2001), smartphones (2007) and consumer tablets (2010). Even in the dark years of the 90s, Apple kept trying to build new beachheads in PDAs (1993) and digital imaging (1994). It's in the company's nature to keep looking for new markets so it can repeat its successful formula.
Smartwatches are ready for Apple
Smartwatches (and wearable tech in general) are now in a traditional Apple entry phase. Apple tends to enter new markets once there's significant tech-world interest in a new technology, but while there are still usability problems Apple could solve. Apple arrives after the first pioneers, but before a category has entrenched leaders. It makes a category mainstream not by increased functionality, but by better usability.
The smartwatch market existed on a very low simmer for several decades, but has really started heating up this year with buzzy, geeky entrants like Pebble and MetaWatch (see our article on Apple’s smartwatch rivals), driven by the low-power connectivity of Bluetooth 4.0 and the trend towards larger, less glanceable smartphones.
All the existing players are marketing towards the tech-savvy, and none of them have any real consumer brand recognition. Someone like Apple stepping in with strong design, overwhelming marketing, and integration between device and content (as it did with the iTunes Store and the App Store, which helped cement the iPod and iPhone's market positions) could easily define the category.
Zoom out to the category of wearables in general, and it's still a fertile field for Apple. Apple has dabbled with partnerships in things like Nike+, something it's done previously before establishing new product lines (with the Motorola ROKR phone, for instance.) Its most comprehensive competitor, Google, is still at least a year from making Google Glass a usable, decently priced consumer hit.
The iWatch can also serve to backstop Apple's iOS ecosystem against lower-priced Android phones that are currently outselling iPhones globally. The developed world is becoming smartphone-saturated, and most of the new smartphone customers are in emerging markets – that's why you're hearing so much chatter about Apple trying to figure out a way to build a cheaper iPhone without damaging its brand.
A device like the iWatch helps in two ways. It gives Apple a fresh purchase from developed-world consumers, and if it has some standalone functionality, it could be a "low-priced" entry device to the iOS ecosystem in emerging markets where iPhones are unaffordable.
Watches are an Apple market; TVs aren't
I probably don't need to tell you that the TV market is completely different from all this. The hardware side is a largely commoditised, extremely mature market led by huge, entrenched leaders with excellent brand recognition. The content side is basically a stultified, government-regulated quasi-monopoly of huge cable and satellite companies with almost total consumer penetration.
Entering the TV market means going head to head with wealthy, entrenched interests with something to protect and decades of experience studying consumer demand. Entering the smartwatch market mostly means going up against smaller companies in a confused, nascent welter where they're still trying to figure out what people want. You're Apple. Which market would you pick?
You may want Apple to shake up the TV market, because the TV market – especially the content side – sucks as a consumer experience. But it doesn't fit the pattern of markets in which Apple succeeds. The smartwatch market does. I expect to see an iWatch sometime in 2013.