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Apple's Red Herring

|About:Apple Inc. (AAPL) Includes:GOOG, Samsung Electronics Co., Ltd. (SSNLF)

Apple (NASDAQ:AAPL) disappointed the Street with its Q1-14 results when it reported earlier this week. While much of the disappointment was related to lower-than-expected iPhone unit growth and the company's apparent maturation, there was another major factor behind the Street's lack of enthusiasm: no new products.

A new and improved Apple TV is on everyone's radar, but the real disappointment has been the lack of wearable technology. Apple has been supposedly working on a smartwatch for quite some time, but Samsung beat them to the market, releasing its Galaxy Gear smartwatch in 2013. Some observers have considered this evidence of poor execution by Apple, as Samsung (OTC:SSNLF) was able to bring a relatively well-received product to market before Apple itself could. But might this have been Apple's plan all along?

The 4-star rating for the Galaxy Gear on Amazon indicates that the adopters have been relatively pleased by it, but there are certainly limitations to the first-generation device, namely, compatibility is limited to few Samsung devices running some of the newest Android (NASDAQ:GOOG) builds, and native and third-party applications are limited.

But perhaps more importantly, adoption seems quite limited. I live in New York City, and I've never seen one while riding the subway, at work, at lunch, or anywhere else (all while generally noticing other consumer electronics trends - the proliferation of Kindles (NASDAQ:AMZN) years ago, the success of Samsung's Galaxy phones, etc.). The smartwatch simply isn't a must-have device - at least in the minds of consumers, at this moment; after all, a smartphone can do much more than a smart watch can (and a pocket isn't much less accessible than a wrist). Some people might actually prefer to wear a real watch!

So while Apple has supposedly been asleep at the wheel, maybe the iWatch non-launch was all part of Tim Cook's master plan? Apple successfully coaxed competitors into bringing devices to market while spending billions of their dollars, many thousands of employee-hours, and a significant portion of corporate focus on a device that's a relative dud. They were able to perform the world's largest product test ever - using the actual buying population - to figure out whether there was appetite for a pipeline product. They were able to evaluate individual features to determine what should and shouldn't be included in a potential future device of their own, if there becomes an appropriate time to bring it to market.

Tim Cook has been criticized as lacking vision because Apple hasn't release a truly new product since his tenure began. But if indeed the non-release of the iWatch was a strategic decision - one that has allowed Apple to preserve shareholder value by avoiding wasted money and effort on a dead-on-arrival product category - he should be applauded as a truly brilliant operational visionary.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.