Apple is the world's biggest fashion company

Apple established itself as the world's biggest fashion company by releasing a smartwatch that is more about beauty and variety than about technology.

I have been hard on Apple for putting off bold moves, focusing on incremental improvements to its products and allowing competitor Samsung to make a rather convincing grab for technological leadership. Tuesday's gala event in Cupertino, California, has done little to change that picture. Apple presented its catch-up big-screen iPhones, waxing eloquent about their high-resolution displays, fast-focus cameras and 25 percent higher processor speeds as if they could surprise anyone.

The Apple Watch isn't a tech miracle. It requires a phone to work, creating an Occam's-razor moment for the consumer: Do I need another device if I still have to carry my phone around with me everywhere? Samsung has overcome this by offering a smartwatch that doesn't need a phone.

The Apple Watch's functionality isn't market-beating. It's a basic fitness tracker that can count steps, measure the heart rate and prompt the wearer to be more active. The device can handle messaging the way its competitors do. The Siri voice assistant makes an expected appearance. Though Apple Chief Executive Officer Tim Cook seemed enthusiastic about the watch's useful features, they are too boring to discuss - particularly in comparison to the Apple Watch's beauty as an object.

Jony Ive, the designer behind Apple's triumphs of the Steve Jobs era, has outdone himself. Various smartwatches have tried to be pretty, expensive looking and Swiss-watch-like. Ive has delivered what is instantly recognizable as the new category standard. The Apple Watch is squarish and is unmistakably an Apple product. It is also instantly recognizable as a watch, not a scaled-down phone. It is not geeky-looking at all.

The magic touch is the crown, which would be the windup wheel in a mechanical watch. Here, it's an input device that makes it mostly unnecessary to manipulate the small screen, though that is also possible. It's not a particularly necessary function - the flexible screen, which responds to the force of a users's touch, is more functional. Psychologically, though, it creates such a recognizable watch-like experience that it can actually convince people to buy the gadget. It's a stroke of design genius that hasn't occurred to any of the other smartwatch makers.

Ive's ultimate accessory comes in three "collections" - one uses stainless steel, another aluminum and a third 18-carat gold. The watches take all kinds of bracelets, and the faces are infinitely customizable. Apple was clearly working to create a device that wearers could easily personalize: Who wants to wear something everybody else has?

In other words, Apple has responded to fashion concerns about smartwatches in a way that no other company can approach. The device will sell despite the $349 price tag - as high as it comes for smartwatches. The crown touch will also undoubtedly give rise to a multitude of imitations - too late, as has been the case with other Apple products.

Apple's other major news of the day was Apple Pay, a payment system using near-field communication - a technology the company's competitors have used for a long time but without much success. Apple Pay potentially offers a solution to credit-card number theft: Card data are stored securely on phones and not shared with merchants. Payments through the newest Apple smartphones, and the watch, are instantaneous - all that is needed is a push of the fingerprint sensor button and a wave. It looks impressive, but again, the technology isn't new and it will take time and effort to become widely accepted.

Apple has signed up a number of major U.S. retailers and restaurant chains, including Macy's, Staples, McDonald's and Subway, to support the system. Rolling it out beyond these, and especially outside the United States, will be a logistical challenge. If its limited brick-and-mortar experience slows down the rollout, Apple will run into the chicken-and-egg problem: Merchants may be unwilling to install new equipment if few customers require it, and customers don't want to experiment with payment methods that are not widely used in stores. Besides, it has a dangerous competitor in PayPal, which recently unveiled its One Touch payment system with similar functionality.

Apple looks less convincing as a service provider, and even as a technology innovator, than as a fashion juggernaut - something it has been turning into with the purchase of Beats Electronics and the hiring of former Burberry chief Angela Ahrendts to run its retail arm. Jony Ive's glamorous watch crowns the transformation.

• Leonid Bershidsky is a Bloomberg View contributor. He is a Berlin-based writer, author of three novels and two nonfiction books.

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