When Apple Inc. Chief Executive Tim Cook introduced the Apple Watch two years ago, he touted its many abilities, including to display email, a calendar, the weather and to make phone calls.

Mr. Cook also described the watch's health features. But when Apple unveiled an updated model last week, however, the focus was clearly on sports and fitness. "We think Apple Watch is the ultimate device for a healthy life," said Jeff Williams, Apple's chief operating officer.

The evolving presentations underscore a shift in Apple's marketing focus for the watch, from a stylish jack-of-all-trades fashion accessory to a personal trainer.

Apple designed the new version, called Series 2, to be water resistant to a depth of 50 meters, thanks to a custom-designed speaker system that flushes out water after a swim. Apple also touted a partnership with Nike Inc. to market sports-themed watches along with GPS capability that helps the device track hikes, runs and bicycle rides.

Analysts estimate that Apple sold about 12 million watches in the year following its April 2015 launch, but the product hasn't proved to be a breakout hit like the iPhone; Apple has sold more than one billion iPhones over the past nine years. One rumored feature Apple didn't add to the watch: a cellular connection, so the watch can handle calls independent of an iPhone.

"They're still missing out on a central purpose, but they're inching toward a device that does fitness and health quite well," said J.P. Gownder, an analyst with Forrester Research Inc.

Apple still considers the Watch a multipurpose digital accessory. Pacific Crest Securities analyst Brad Erickson agrees. "If you're Apple, your broader purpose is to use your devices and your ecosystem to provide more utility to your user base and enrich that experience," he said.

Still, Mr. Erickson said the new Apple Watch could cut into sales of fitness-focused devices from companies such as Garmin Ltd. and Fitbit Inc.

Amy Nouri, a Garmin spokeswoman, said the Apple Watch will introduce more consumers to the types of products it makes. "It's exciting that Apple is coming out with watches like this," she said. "It really legitimizes the wearable space."

"We believe there's plenty of room in the category given the significant growth it is experiencing," a Fitbit spokesman said.

A significant part of the Apple Watch's sporty push comes via the Nike deal. A new version of the watch, the Apple Watch Nike+, comes equipped with the latest Nike+ running app and Nike-inspired watch faces and bands.

Despite the prominent Nike branding on the watch, it isn't clear if it will help the world's largest sportswear maker gain share in the competitive fitness-tracker app marketplace.

Nike has focused on developing software since abandoning production of its own wearable fitness devices, including its short-lived FuelBand, in 2014. The latest edition of its Nike+ app, released this summer, combines elements of fitness tips and motivation with a customized marketplace, aimed at increasing direct sales of the company's apparel and shoes.

But Apple Watch users will also be able to download apps from Nike competitors, including Under Armour Inc. and closely held Strava Inc.

San Francisco-based Strava offers GPS-enabled fitness tracking largely for runners and cyclists and counts its membership in the tens of millions, according to a spokesman.

Since 2013, Under Armour has spent more than $700 million to acquire a suite of fitness apps and counted more than 175 million registered users as of July. The newest Apple watches, including the Nike branded edition, will be compatible with Under Armour's UA Record and MapMyRun apps, according to a spokeswoman.

In a statement, Nike said the co-branded version of the watch will feature its logo and that some functions, including directing Apple's Siri voice command to begin workouts, will sync only with Nike's running app.

"Apple and Nike both share a passion to make life easier and more fun for our consumers," the company said.

Write to Robert McMillan at Robert.Mcmillan@wsj.com and Sara Germano at sara.germano@wsj.com

 

(END) Dow Jones Newswires

September 11, 2016 21:15 ET (01:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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