Apple is pulling away from the competition to a degree never seen before and has years' worth of competitive advantage in emerging categories like wearables
For the second year in a row, Apple held a developers conference that should frighten its competitors.
Context & Ripple Effects
This Above Avalon piece is the midpoint of an argument that has been building since 2015, when Ben Thompson argued Apple was best positioned to make the wearable market thanks to design, retail, and its customer base. The intervening data backed him up: by August 2019, Apple's wearables business was running at $16B annually and growing fast enough to overtake iPad and Mac as the company's third-largest category.
What changed with this article is the framing — from 'Apple is doing well' to 'the gap is unbridgeable.' The claim that consecutive developer conferences should frighten competitors rests on the same foundation Steve Cheney identified back in 2015: in-house chip design and integration are platform advantages rivals structurally cannot match.
First-order effects
- Google and other less-integrated rivals face a widening gap in wearables specifically because, as Stratechery showed with iPhone X, superior rival services still lose when Apple controls the full hardware-software stack.
- Automakers evaluating smartwatch-and-car ecosystems inherit the same problem Cheney flagged: Apple's silicon and sensor integration advantage applies to any emerging connected category, not just phones.
Second-order effects
- Rivals' rational response is ecosystem consolidation rather than point-product competition — matching Apple requires integrated stacks, which pushes weaker wearable makers toward partnerships or exit rather than standalone roadmaps.
- The wearables run-rate trajectory means Apple's third-largest category keeps funding the custom-silicon investment that widens the gap, a self-reinforcing loop competitors must outspend rather than merely match.
Third-order effects
- If the pattern holds, emerging computing categories consolidate around whichever player integrates silicon first — the same dynamic that decided smartphones now deciding wearables and, per the 2015 analysis, automotive.
- Developer-conference cadence itself becomes competitive infrastructure: platforms with years of lead time compound developer lock-in each cycle, making the moat wider at every WWDC regardless of any single announcement.
The trend: Vertically integrated platforms are converting early silicon investments into multi-year lead times in each successive device category, with wearables as the current proof case.