The Apple (NASDAQ:AAPL) Watch has been a hugely successful product category for Apple. According to market researcher Canalys, the company shipped 18 million Watches during calendar year 2017, representing unit shipment growth of "more than 54%" compared to what Apple shipped in the prior year.
This performance led Canalys Senior Analyst Jason Low to declare that "Apple has won the wearables game."
Right now, Watch growth likely benefits significantly from first-time buyers of the wearable devices; there's a huge iPhone installed base out there and Watch penetration within that installed base is still likely far from saturation.
For Apple to drive increased Watch penetration, and for the company to try to stoke replacement demand among current Watch owners, the tech titan will need to continue to deliver solid feature and capability innovations at a regular clip.
Thanks to a new report from Fast Company, which has previously published accurate details about upcoming Apple products, we now have some idea of what the Apple Watch innovation pipeline looks like.
Fast Company reports, citing a "source with direct knowledge of Apple's plans," that a future Apple Watch -- either this year's model or next year's -- will come with "solid state buttons that don't move up and down but rather sense the touch of a finger."
This move, Fast Company says, will "make the Watch more water resistant because the opening needed for a physical button is eliminated." You might recall that Apple touted increased water resistance as a key selling point for its current Apple Watch Series 3, so it's not surprising that Apple is looking for ways to further enhance the water resistance of future Watch models.
In addition to improving water resistance, Fast Company's source claimed that the move to solid-state buttons will "take up less space in the design, freeing up room for a bigger battery."
One of the biggest limitations of the Watch is battery life. According to CNET's Scott Stein, the Apple Watch Series 3 sees a significant battery life reduction "when making calls or during GPS workouts."
Since both of those use cases -- particularly the latter -- are important use cases for the Apple Watch, it's little wonder that the company's engineering teams want to do what they can to boost battery life. A bigger battery is certainly one way to do that.
The future lacks buttons
Although the next Apple Watch (or, perhaps, its successor) will reportedly move to solid-state buttons, that's not the end of the line for Watch innovation. Fast Company says that Apple's industrial design team "has been working toward a future Watch that has no buttons at all."
How would that work? Well, according to the report, "specific areas on the side of the device would respond to finger touches."
This sounds extremely futuristic and, quite frankly, really cool, so it looks like Apple has a really interesting vision for the future of Watch user interaction.
Beyond the design
Fast Company's report talks mainly about the changes in the external designs of future Watches as well as the way users will interact with the devices, but that's not where all the fun is likely to be in future Watches.
For one thing, we should expect to see rapid advances in processor technology that'll enable more compelling software use cases. The apps that'll be able to run on future Apple Watches could be far more complex and rich than the ones that the current Watch models can run.
Additionally, a report from Bloomberg indicated that Apple is working on building a new type of display technology called MicroLED to supplant the current OLED technology that Apple has been using on the Apple Watch since the first iteration. MicroLED displays promise improvements in brightness compared to OLED displays.
Ultimately, Apple pays a lot of really smart marketing and engineering talent to figure out what consumers are going to want next and how to bring it into mass production at reasonable prices. Given the momentum that the Apple Watch currently enjoys, as well as the company's strong history of technology and user experience innovation, I think that this business could continue to be a fast grower for Apple for years to come.
Ashraf Eassa has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.