You will agree, my voracious reader, I am not a product reviewer. For this very reason, I mostly refrain from publishing any reviews of products I have purchased. That isn’t to say I don’t have strong opinions about those products (ask my friends, they will attest), but simply that I do not publish them on this site. Let us leave the reviews to our more adventurous writers. Instead, we aim here to understand the hidden complexities that are not often talked about in the contemporary technology and business press. On today’s agenda - the Apple Watch.

As you so astutely recall, I have written about a few scenarios the Apple Watch can take upon its entering the market. For your convenience, I have summarized those scenario below:

1) It can flop, and Apple will abandon efforts.
2) It can be a semi-successful product like the iPad.
3) It can be extremely successful like the iPhone.

Well, as of last week, the Watch became available for preorder, as well as up for display at your nearest Apple Retail locations. Of course it is still too early to tell which scenario the Watch will take, but as of most recently, I have thought of some additional complexities that will undoubtedly affect the success of the Apple Watch.

The Watch, and the Hierarchy of Needs

In a 1943 paper titled A Theory of Human Motivation, Abraham Maslow proposed a psychological theory called the Hierarchy of Needs (HoN), which aimed to describe the patterns of motivation us humans go through. Like any psychological theory, the HoN is imperfect and met with heavy criticism. Despite this, it is still commonly taught in most psychology classes and remains as well regarded as a theory may be. For your double-fold convenience, I have reproduced Maslow’s hierarchy below.

With this hierarchy in our retinas, let us begin to answer some questions. First, where do we think smartphones belong (note: there is no wrong answer, only more correct answers). If you asked your writer, he would answer that smartphones started at the peak of the pyramid (“Self-Actualization”), but have descended one level down to “Esteem”. As you descend down the pyramid, the importance of each step grows until you reach “Physiological” needs such as food and water. We cannot live without those items, making them of the utmost importance. Smartphones started at the top of the hierarchy because their utility went from little to great; their impact on our lives followed the same trajectory.

It is still possible to live without a smartphone, but increasingly, that life is not worth living. I jest, of course, but the importance and value of the smartphone in the life of the average human continues to grow with each new iteration. Deviation from the “Esteem” step, on which I currently place smartphones, leads to helplessness, a lack of respect, and to weakness. Imagine traveling to a new country without a smartphone. Most likely, you would get lost - Helplessness. Alternatively, what if someone told you they don’t have or cannot afford a smartphone? Would that person be given the same respect as a smartphone owner? Lack of respect. Finally, picture yourself doing a group project for which you need to Google something. Without a smartphone, you are helpless. Weakness.

If you are thinking these examples are cruel and not perfectly symmetrical to the real world, you would make a solid argument. But it is impossible to deny the rise of the smartphone in our daily lives, and its downward descent on the hierarchy of needs.

Are you hungry on the day the Dow Jones Industrial Average hits its peak for the year? Probably. What about on the day it falls eight percentage points? Still, you’re probably hungry. And if the market totally plummets, leading to a full-fledged depression. Still, you have to eat. Maslow’s HoN shows that the physiological and safety needs must always be met; the alternative is death. For this reason, companies in the business of selling food, water, and shelter are not as hard hit by the impacts of the economy. This is in stark contrast to companies in the business of selling luxury items such as cars, clothing, and perfume. The hierarchy of needs allows us to gauge the relative importance of these products in our lives, and how the economy and human tastes will affect them. The lower the product is on the hierarchy, the less affected it will be.

Let us circle back to the iPhone for a minute, which sits on the second to last step. In the case of a market downturn, do you think consumers would still purchase smartphones? Well, you might say, it depends who the consumer is and how bad is the market crash. Your answer would be precisely right. The rich and less affected would still upgrade their phones every year, as would the working middle class, since they would probably require the smartphone for work. It is entirely plausible, however, that the less fortunate, poorer demographic would eschew upgrading their phone this year. If things get really bad, they might even cancel their contract and go without a smartphone. And since the smartphone is on the second step, esteem, it would be hit less hard than the products at the top of the pyramid, self actualization. It isn’t too hard to imagine a future where smartphones will descend further down the pyramid, into love and belonging, and thus be further insulated from any market movements.

Finally, we have arrived to the point of discussing the Apple Watch, and where we think it fits within this hierarchy. We can quickly dismiss the Apple Watch from the physiological, safety, and love/belonging steps, since it is not necessary for survival, safety, or belonging. That leaves us with esteem, and self-actualization - the least fundamental needs a human being requires. As you recall, I placed the iPhone on “Esteem”, which is the second to last step. I now ask you to pause and think for your own, omnivorous reader: where do you think the Apple Watch belongs? Once you’re done, return your gaze here and let us continue.

If you placed the Watch in the “Esteem” tier, you expect to be provided with the same value, utility, and prestige as the iPhone. Otherwise, you chose “Self-Actualization”, placing the Watch on the top tier of the hierarchy - a tier which supposedly results in the realization of a person’s full potential (who knows what that means, exactly?).

Despite the cryptic definition of “Self-Actualization”, your dear writer believes the Watch fits in this tier. The utility and cultural value of the smartphone reaches far wider than the smartwatch (at this time); in most developed nations, you will not find many people without a smartphone. The Watch, as it exists today, is a luxury item assembled for prestigious wrists. It is a fashion statement just as much as it is a fashion accessory. The value it provides is ancillary to the value of the iPhone. Alone it does little. If you’ve got food in your fridge, a house and a spouse, respectful co-workers, and a smartphone, the Watch is the last remaining step to your actualization. It does not come before those items, however.

If you feel philosophically enlightened from our discussion of the hierarchy, I hope too you will also feel logically and realistically liberated soon. Given our placement of the Watch in “Self-Actualization”, it is the least critical element to our existence. As such, it is a product that is least insulated from market movements. If an economic disaster were to strike, the Watch would be the first product to have its sales hurt. Therefore, the future success of the Watch is heavily correlated with the movements of the economy; when the economy slows, Watch sales will slow. When the economy speeds up, Watch sales will follow.

The Watch, more than any other product in Apple’s portfolio, sits highest on the hierarchy of needs. It is simultaneously the least fundamental and the most desirable product a person can dream of. Consequently, Apple Watch sales will be predicated upon the buying power of consumers - which itself is derived from the economy - more than any other product Apple has recently released. And that, my friends, is as close to a product review as I will come to.