BizFeed: The Apple Watch is Underwhelming Customers

Plus: AT&T fined $100 million for "unlimited" data plans.


1. Many Don’t Recommend Apple Watch

The News: The Apple Watch has a long way to go before becoming a mainstream success. In a new study by UserTesting, just 38 percent said they’d recommend the device. Meanwhile, 35 percent were passive and more than a quarter (27 percent) were detractors.

Forbes has the story:

Asking open-ended questions, UserTesting found that third-party apps were the most frustrating or difficult thing about the watch at 19%. These users found third-party apps slower and less reliable than the built-in Apple apps. One user told the firm: “The Apple Watch has lots of potential, but right now it’s under baked. Performance is a major problem, the app screen is an inconvenience, and the ‘apps’ are embarrassingly useless, bar just a few.”

“These survey results are not overwhelming,” said Michael Mace, the vice president of mobile at UserTesting and who worked at Apple from 1987 until 1997 as a director of marketing. “If Apple wants people to get excited and recommend heavily, it needs to get additional hooks. Third-party apps will be best way.”

Why It Matters: I don’t know about you, but I’m not seeing an Apple Watch on everybody’s wrist just yet. In fact, it’s still pretty rare. If the company’s hoping smartwatches become ubiquitous, it has a long way to go. (We could ask Apple how sales have been, but they’re super-secretive and will never tell.)

But that hasn’t stopped Apple from raking in profits. A new study finds that 20 percent of Apple Watch customers are buying extra bands, which come at a huge profit margin.

Reuters has that story:

The data from Slice Intelligence, a research firm that mines e-mail receipts, offers a rare window into the money-making potential of Apple’s first brand-new product under CEO Tim Cook.

The ever-secretive company has yet to release how many units of the watch it has sold, let alone how profitable it is. Slice estimates the company has sold 2.79 million as of mid-June.

But if the band purchases are any indication, sales of the watch itself are just the beginning of Apple’s profits.

Although the entry-level sports band retails for $49, it costs only about $2.05 to make, according to an analysis of the 38-millimeter size by IHS, a technology research firm.

2. AT&T to be Fined $100 Million For “Unlimited Data”

The News: Remember when AT&T offered seemingly too-good-to-be-true unlimited data plans for wireless customers? Well that didn’t work out too well because the company has just been fined $100 million by the Federal Communications Commission for promising unlimited data, but then alllegedly slowing down speeds for those customers without alerting them. (AT&T will “vigorously dispute” the charge and says it did disclose the slower speeds.)

Why It Matters: Wired called AT&T “insane” for offer unlimited data plans, reporting that people “consume 1.2GB of cellular data each month.”

Meanwhile, Bloomberg compares the fine to recent incidents:
The fine is the largest proposed by the FCC, said Neil Grace, a spokesman for the agency. In October, AT&T agreed to pay $105 million to settle claims it billed wireless customers for unauthorized charges for services including horoscopes, ring tones and love tips. In May, Sprint Corp. and Verizon Wireless agreed to pay a combined $158 million to settle similar claims.

3. Restaurant Chain’s $25 Million Move

The News: Philadelphia restaurant chain Honeygrow has secured $25 million in financing to fuel a growth spurt, according to the Philadelphia Business Journal. The fast-casual restaurant has four locations in the region but has plans to open four more in West Philly, Hoboken, N.J., Wilmington, Del., and Newark, Del.

Why It Matters: Companies often wrestle with whether they should take funds to expand. Honeygrow is hoping that it will join other successful Philadelphia brands that have expanded recently, like La Colombe which took investment money to start building 100 cafes around the country.