Anyoption's  Instablog

Send Message
anyoption™ is the world's leading binary options trading platform. Founded in 2008, anyoption was the first financial trading platform that made it possible for anyone to invest and profit from the global stock market through trading binary options. Our goal here at the anyoption Instablog is... More
My company:
My blog:
anyoption - Official Blog
  • Apple Smartwatch: I'm Not So Bullish 0 comments
    Jul 9, 2014 7:44 AM | about stocks: AAPL, SNE, SSNLF

    Things are heating up in the smartwatch world. In preparation for Apple to release its iWatch, it recently poached TAG Heuer vice president of sales and retail Patrick Pruniaux. Taiwan-based Quanta Computer has reportedly contracted with Apple to assemble the iWatch and has hinted at an October launch date.

    Whether that's the case or not, Apple is going to face some stiff competition in the smartwatch market. Sony, Samsung, and LG have already released or announced their own smartwatch, with the latter two sporting the Android Wear OS. Pebble is also an interesting specimen, whose Kickstarter campaign raised a record $3 million in 4 days. Much to Apple's dismay, there really is a question as to who will win the smartwatch battle, and the answer may not be them.

    But that doesn't stop some analysts from being bullish on Apple's version. In February, Morgan Stanley analyst Katy Huberty predicted that Apple will do $17.5 billion in iWatch sales in the first 12 months after launch. That's 58.5 million units at $299 per watch. And to be honest, it's a little ridiculous. Based on their graph below, that puts the iWatch selling faster than all of Apple's other products in the past, even the iPad. That's just not going to happen.

    (click to enlarge)

    Another forecast done in June by UBS analyst Steven Milunovich estimates that Apple will sell 21 million units in the first year, increasing Apple's fiscal revenue by $6.5 billion. That puts it on about the same track as the iPad. But then again, Milunovich agrees that it could go either way: "The iWatch might do better than the iPad due to a larger customer base at launch or worse because some might not want a wearable."

    And that's where I get hung up on it. Obviously the iWatch is going to be a fashion item as well as a tech device, but to peg sales in the first year at the same rate as the iPad? I think that might be a stretch. Yes, Apple's customer base has grown immensely since the iPad launched. For example, Huberty noted in her report that "The company reported 575M iTunes/App Store accounts as of June 2013 compared to approximately 120M accounts when the iPad launched."

    But I'm not as confident in the wearables market as I am in the tablet market, especially when Apple one of the last to enter the market rather than the first. It also doesn't help that Apple will be releasing the iPhone 6 about the same time or a month or two prior. Do they really expect customers to buy both in such a short time period? Come on, now.

    Disclosure: The author is long AAPL.

    Stocks: AAPL, SNE, SSNLF
Back To Anyoption's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.