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Apple Seeks Identity for Smartwatch

Envisioned as a health monitor, it now provides data, communicates in new ways and serves as fashion accessory

When Apple Inc. started developing its smartwatch, executives envisioned a state-of-the-art health-monitoring device that could measure blood pressure, heart activity and stress levels, among other things, according to people familiar with the matter.

But none of those technologies made it into the much-anticipated Apple Watch, due in April. Some didn’t work reliably. Others proved too complex. And still others could have prompted unwanted regulatory oversight, these people said.

That left Apple executives struggling to define the purpose of the smartwatch and wrestling with why a consumer would need or want such a device. Their answer, for now, is a little bit of everything: displaying a fashion accessory; glancing at information nuggets more easily than reaching for a phone; buying with Apple Pay; communicating in new ways through remote taps, swapped heartbeats or drawings; and tracking daily activity.

Apple declined to comment.

“One of the biggest surprises people are going to have when they start using it is the breadth of what it will do,” Apple Chief Executive Tim Cook said last week at an investor conference.

Even as Apple amasses record profit from the iPhone, Apple Watch is a big bet, offering a potential new growth driver that could ease Apple’s dependence on smartphones. For Mr. Cook, it’s also a chance to prove that Apple can still produce the types of breakthrough products that defined the company under his predecessor, Apple co-founder Steve Jobs.

Apple Watch faces significant challenges. The device needs to be close to an iPhone to have wireless connectivity or gather global-positioning-system location information. This makes the watch an accessory to a device that already performs most tasks well.

It also straddles the line between jewelry and consumer electronics, creating different types of expectations from consumers about quality, obsolescence and the buying experience.

To cover that landscape, Apple plans a range of watches at different prices, starting at $349. The high-end models, with 18-karat gold casing, are expected to be among the most expensive products Apple has ever made, likely surpassing the $4,000 high-end Mac Pro.

Marketing the Apple Watch won’t be as simple as marketing past Apple products. The iPod was a way to carry a music collection in your pocket. The iPhone was a mobile phone plus Internet device, with a revolutionary touch screen. Apple sold the iPad as a simpler way to browse the Web, view photos and watch videos.

Still, analysts expect Apple’s brand appeal and the company’s loyal customers to make Apple Watch the most successful wearable device on the market.

Apple is gearing up for a strong start. People familiar with the matter said the company is asking suppliers in Asia to make five million to six million Apple Watches in the first quarter.

One of those people said half of the first-quarter output would be for the entry-level Apple Watch Sports and one-third for the mid-tier model, which has stainless-steel casing and a watch face covered by sapphire crystal.

The total would be on par with Apple’s last major all-new product. Apple sold 7.5 million iPads in the six months after they went on sale in April 2010.

But such output would far outpace the production of wearable devices from Samsung Electronics Co. , LG Electronics , Sony Corp. , Motorola Mobility and a host of fitness trackers. Research firm Canalys said last week that just 720,000 smartwatches powered by Android Wear, Google Inc. ’s operating system for wearable devices, shipped in the last six months of 2014.

ABI Research estimates that Apple will sell 11.8 million Apple Watches in 2015, accounting for nearly half of all wearable devices, including fitness trackers and non-Android smartwatches.

“People have left the door open for Apple. The others haven’t done a great job here yet,” said Nick Spencer, an analyst at ABI Research.

Apple’s ability to lure millions of users to a new type of device will help prod software developers to create the types of enticing apps that boosted the appeal of the iPhone and iPad. That eases the burden of conceiving and delivering a killer feature from the get-go.

“This whole notion that there needs to be a killer app in an Apple product just isn’t true,” said J.P. Gownder, an analyst at Forrester Research. “For different people, different things will pop.”

One likely draw is Apple Pay, the company’s budding payment service. It allows shoppers to pay for goods by waving a mobile device in front of a card reader. Apple Pay is now limited to the latest iPhones, but the service will work through Apple Watch with older iPhones. Watch users will also be able to make small purchases without carrying an iPhone, such as when they’re out jogging and want a sports drink.