Why Apple's biggest new bets haven't paid off yet

The big theme of Apple's annual Worldwide Developers Conference this weekwas change.

Apple overhauled the clunky look and feel of its Apple Watch software barely a year after the product launched. It redesigned Apple Music to be simpler to, you know, find and listen to music. And the company expanded Apple Pay to the webso it's not longer solely dependent on the slower adoption of retail stores. 

It may be easy to write-off these changes as evidence that Apple messed up its big new product categories, but longtime Apple analysts have a different take.

"When we look back on history, we tend to be very polite and think that the iPhone from the first version was the perfect device," says Neil Cybart, who runs Apple analysis site Above Avalon, in an interview this week Please podcast about all things Apple, which you can stream below or download on iTunes and Stitcher. "In reality, we are going to see these changes and these small pivots."

Even with these overhauls, some consumers and investors doubt whether any of Apple's current big bets are actually paying off. Does the smartwatch really have the potential to be as big as the iPhone? Is Apple Pay as exciting as the long-rumored Apple Car?

The problem, according to Horace Dediu, a mobile industry analyst with Asymco, isn't that Apple is waiting too long to enter new product categories, but rather that it actually got into markets earlier than usual.

"Apple is best at filling markets from about 5%-50% of the penetration," Dediu says on the podcast. "Which is why Apple doesn't usually enter markets until at least victims [are] laid end to end to sort of show the path forward."

That wasn't true with the Apple Watch, however.

"They probably got in at the 1% level as opposed to the 5%. You are looking at literally hundreds of millions more watches need to be sold before Apple gets in the right groove," Dediu says. "The same thing with virtual reality and the same thing with payments. Those are super early."