Apple is expected to announce new iPhones and Watches this month. The Series 7 Watch is rumored to have a new, flatter design with larger display that is closer to the glass, and possibly blood pressure monitoring capabilities. As with every new product, its introduction will move Apple’s other watch offerings around, which got me thinking about the watch at the bottom of Apple’s lineup: the Series 3.
The Series 3 was introduced in 2017 and has held up the lower end of Apple’s lineup since. It brought with it improved performance and cellular capability and is the last design using the original 38 and 42mm display size. Its performance and feature set has allowed it to remain relevant and Apple has dropped the price every year to bring customers into its ecosystem at the low end. Last year introduced the Apple Watch SE, which provided a bridge between the Series 3 and the Series 6, offering the larger screen of the 6, better performance, and a compass. Apple’s Watch line now spans three price points:
- At $200 – a good watch with a smaller screen, GPS, and heart rate monitoring
- At $300(ish) – a better watch with a bigger screen, cellular (if desired), and a compass
- At $400 – the best watch with an always-on screen, ECG capabilities, and blood oxygen monitoring
The Series 3 is now four years old and is starting to show its age. If the Series 7 introduces a new screen size, then the Series 3 will look even older than it already does. Performance is also starting to suffer. I bought a Series 3 when it was new and Sally has been using it for over a year. It works but performance is slow when swapping watch faces or opening the occasional app. I predict that Apple will finally retire the Series 3 this time around. The question is, what will it be replaced with?
I think there are three options:
- Drop the SE to $200, drop the Series 6 to $300(ish), and introduce the Series 7 at $400. That keeps the line to only two screen sizes and still entices customer to upgrade to the next tier to get ECG and blood oxygen capabilities. Getting the largest screen requires upgrading to the Series 7 at $400. If the Series 7 has a blood pressure sensor that will also entice an upgrade and Apple will only offer its full selection of materials on the Series 7, further enticing upgrades. That leaves a low-priced offering to continue bringing in customers while maintaining compelling features at the higher tiers.
- Remove the Series 3, drop the SE to $250, and introduce the Series 7 at $400. This reduces Apple’s offerings to two lines but removes its lowest price entry. I don’t think Apple can get away with $270 as its entry price, so it will have to adjust that down to $250 or $229 to split the difference. That still makes for compelling upgrades but is above the psychological $200 price barrier that will leave potential customers behind.
- Remove the Series 3, drop the SE to $200, and introduce two tiers of Series 7 – standard and Pro, at $300 and $400. This follows the iPhone 12 Pro, 12, SE strategy while maintaining the price points Apple has today. I think this is unlikely because I haven’t heard any rumors about an Apple Watch Pro. The only thing that might make sense is if the blood pressure monitor is only available on the Pro, as there have been conflicting rumors that the Series 7 would include it.
Given my understanding of Apple’s pricing history and its product tiers, I think the first option is the most likely because it retains the entry level price point and keeps Apple competitive with other smart watches. In any case, the Series 3 is going away because it is simply far too old. I think the SE will replace it, the Series 6 will get a discount and lose some material options, and a new Series 7 will reign supreme. The SE’s improved performance and larger screen will give it another 3 years of life at Apple’s low end. I’ll know if I’m right or wrong soon enough.