Apple should take notice of the partnership announced today at the Baselworld watch and jewelry conference, because Google has put together partners that could build a watch that even iPhone customers would want.
One can't dispute that Apple will sell a lot of watches. Just take a look at investment bankers UBS and Bernstein's forecasts. But if this Android Wear partnership is effective, it might be hard for Apple to achieve its optimistic forecasts.
Each partner has unique skills, where the whole of the partnership is greater than the sum of the parts. Individually, one could argue that these three have better software engineering, better hardware engineering, and better design.
Google is ahead of Apple with Android Wear, a more extensive smartwatch app development platform. Android Wear developers benefit from Android's long open source, Linux, and Unix legacy. Culturally, open source developers want to improve software development for the next programmer and want to share their experience. This is why Apple chose BSD Unix for the Mac, and why developers often choose Macs.
Wear developers also benefit from Google and the developer community's experience understanding what a glanceable app is, and how to make it useful to the wearer. In New Jersey, parlance building glanceable apps says easy does hard.
Intel missed the mobile processor market, but the company likely isn't sad about that. Intel is angry, and like an enormous and cunning leviathan lying in wait under the tiny wearables market, it is prepared to use its enormous size and technical resources to win emerging new businesses like wearables.
Intel succeeds using a reference design business model. It engages its engineers with companies building new products, and sometimes Intel will even build its own products to understand the problem its customers are trying to solve with its semiconductor components. Once the design challenges are solved, Intel produces references designs for systems that use its semiconductor components. The company won the PC market and almost put AMD out of business with better reference designs and field engineers that helped customers get products to work and often better technology in its microprocessors and other silicon components.
If Intel could do this again with a watch reference design, the company would pose a significant threat to Apple's proprietary watch architecture. Intel won't keep its breakthrough reference designs to itself, but it will pollinate it to everyone who wants to increase the number of competitors and decrease prices.
TAG Heuer has designed watches for 150 years. That kind of experience can't be recreated in a lab in a few months or years, even with all of Apple's money. If TAG Heuer can bring its design skills to bear on not just how the smartwatch looks but how one is used, it could contribute to the yet-to-be-discovered killer wearable app, packaged more beautifully than the Apple Watch.
Better software, better and cheaper hardware, and a more useful and elegant design could depress the high side of Apple Watch forecasts.