(Bloomberg Business) — In a lab shut off from communication with the outside world and where visitors can’t bring in a pad of paper, let alone a phone, Apple Inc. (Nasdaq:AAPL) has given some companies special early access to Apple Watch.
Bayerische Motoren Werke A.G., Facebook Inc., United Continental Holdings Inc. and others have spent weeks at Apple’s headquarters in Cupertino, California, working hands-on with the smartwatch to test and fine-tune applications that will debut alongside the device next month, according to people familiar with the process, who asked not to be identified because of non-disclosure agreements.
Apple, which will share more details about the gadget at a March 9 event, uses extreme measures to keep the work secret. No outside materials can be brought in to the labs with the test watches, a person who attended said. The companies, sometimes sharing a room, must bring in source code for their apps on a computer hard drive that can’t leave Apple’s headquarters. To prevent information from leaking out, Apple is storing the code and sending it to the companies closer to the watch’s introduction date, the person said.
“There’s a lot of confidentiality,” said Stephen Gates, a vice president and creative director for Starwood Hotels & Resorts Worldwide Inc., which is building a watch application to unlock hotel-room doors. Apple featured Starwood’s application in September, when it first announced the watch. Gates said he’s made several trips to Cupertino to develop the software, but declined to comment on what those visits included.
As Apple’s first new device since the iPad in 2010, the stakes are high for Apple Watch, and the sophistication of the apps available is critical in wooing buyers. Just as the App Store has been a key reason for the iPhone’s success, tools for Apple Watch will help determine how customers use the gadget and whether it will be a sales hit. The watch must be paired with an iPhone to fully work, and anything less than seamless integration may alienate potential customers.
Tim Cook, chief executive officer of Apple, after unveiling the Apple Watch during a product announcement at Flint Center in Cupertino on Sept. 9, 2014.
Apple Chief Executive Officer Tim Cookwill highlight watch applications at the event in San Francisco. Amy Bessette, a spokeswoman for Apple, didn’t respond to a request for comment ahead of the event. Jessie Baker, a spokeswoman for Facebook, declined to comment, as did United spokesman Rahsaan Johnson and a BMW representative.
Optimism over Apple’s new products, including the watch, has helped send the company’s shares to record highs in recent weeks. Sales of the new device in the first fiscal year may reach almost 14 million, according to the average estimates of five analysts surveyed by Bloomberg. Researcher Strategy Analytics projects Apple will take 55 percent of global smartwatch sales this year, when total shipments may reach 28.1 million units, up from 4.6 million in 2014.
“Initial demand could be stronger than the iPhone and iPad when they launched,” Katy Huberty, an analyst at Morgan Stanley, wrote in a note to investors this month. She’s estimating that Apple may ship 30 million watches in the first 12 months, helping the company generate more than $6 billion in additional revenue.
Apple has made the yet-to-be-released watch available to some companies so they can test out their apps, check for glitches and adjust the tools to the watch’s design. Hundreds of applications may immediately be available once the Watch reaches stores, according to Jim Suva, an analyst at Citigroup Inc.
A big challenge for Apple and its developers is building applications that are useful without being annoying. Apple has recommended that developers be judicious about interrupting people with constant alerts that will buzz their wrist or drain the battery. If desktop computers can be used for hours at a time, and smartphones for minutes, the watch is being measured in seconds. Apple is suggesting developers design their applications to be used for no longer than 10 seconds at a time.
“Not every e-mail that lands in your in-box deserves to jerk you away from what you’re doing at that moment in time,” said Shawn Carolan, the co-founder of Handle Inc., an e-mail and calendar productivity app, and an early investor in Siri, the voice-recognition company Apple bought in 2010. “If your watch is buzzing every 15 seconds with a notification you are going to go crazy.”
Apple has released design guidelines for building applications for the watch. Like those made for the iPhone and iPad, a large team will screen every application to ensure it works and conforms to the company’s policies.
The tools under development give a glimpse of how Apple Watch can be used. There will be several fitness-tracking apps to take advantage of the watch’s ability to measure movement. Cook has also been touting its potential health benefits.
“If I sit for too long it will actually tap me on the wrist to remind me to get up and move because a lot of doctors believe that sitting is the new cancer,” he said at a conference in February. “It’s something that you’re going to think, ‘I can’t live without this anymore.’”
Many companies are building productivity software, with Handle’s watch application to send people reminders about e-mails in part based on location. If a parent gets an e-mail from a school, for instance, the watch will buzz when the person is getting home because that’s when they typically have time to go through non-work-related messages, Carolan said.
Social networks also are creating versions of their apps. Facebook’s Instagram has developed a program to browse through photos and to be sent notifications when certain people post a picture. Twitter Inc. and Pinterest Inc. also will have applications. Airlines are building applications to check in to flights. Automakers are developing software to help locate a car in a parking lot, and Cook said earlier this month that the watch could unlock and turn on a car. During the September event, BMW’s app was revealed to let users track their electric cars’ battery charging status.
Not everyone is rushing to build watch apps. Slaven Radic, founder of Tapstream Network Inc., an application marketing software company, works with app makers to improve their business, and has found that many of his clients are holding back, especially as some struggle to see an early use case.
“It’s requiring some development resources that are very precious for a lot of these guys — most of them are taking the look-and-see approach,” he said.
In working with Apple Watch, some developers have noticed problems, including slowness. The watch requires an iPhone to work and the Bluetooth connection between the phone and the watch caused lag time for some applications, one person said.
Another challenge for developers is building software for an unreleased product. Starwood hotels built a computer simulator to give its designers a sense of how its app will work for customers.
“We’ve gone so far as doing cardboard cutouts to estimate how big it will be on your wrist,” Gates said.
Many fledgling developers are eager to build for Apple’s new platform in hopes it will provoke the same sort of demand that occurred when the App Store was introduced in 2008.
At an event in November, more than 100 software coders spent the day in a San Francisco office competing in a hackathon to create applications for the device in less than 24 hours. Many focused on health, while others built messaging products. One developer made a navigation app that would flash red if a person is walking into a high-crime area.
“It’s such a small screen that you have to be very particular about what you’re building,” said Michele Titolo, a software developer for the online message board Reddit Inc., who judged the hackathon competition. “There are some really big opportunities out there.”
And there’s always a chance for the unforeseen killer app. The winner of the “audience choice” award at November’s coding competition? A whoopee-cushion app called Fart Watch.