Why the Apple Watch is just the beginning
For Live Events like today’s Apple Event — Scutify.com’s home page and here on https://www.scutify.com/scuttle.html are by far the best way to stay up with the minute-to-minute coverage of it from the best sources on Twitter. See “Trending” under the right side bar on Scutify.com and on Scuttles page and go to the Latest Tweets #AppleEvent. And on the App, simply open it and scroll to the Landing Page on the app to the right. Pull down to refresh.
The buzz around today’s big Apple Event is reaching new fever-pitch levels that are unprecedented, even for Apple in Cupertino, Calif., where the company long ago mastered hyping up events like this.
In my morning analyst notes, I see that Cantor estimates that the Apple Watch will be the best-selling new product in the company’s history, with sales of 20.6M units in its first year of availability. The firm predicts that the device’s sales could potentially reach over 40 million units in its first year of availability. And J.P. Morgan reports that Wall Street consensus is about 15 million total units for 2015.
Feet to fire, I’d look for Apple $AAPL to sell about 20 million in 2015, but more importantly, as we’ve seen Apple growth with iPod, iPhone and iPad units in the out years and that’s what we’ll want to see for the Apple Watch, too — will it sell tens of millions of units in 2016 is more important than whether it sells 15 million or 25 million in the first year. Could Apple hit Cantor’s 40 million units in its first year? I doubt it, but again, that’s not the point for long-term Apple investors anyway, as we want a sustainable new platform to build on with the Apple Watch, not just a one-off hit product.
I’ve written about the Apple Watch a few times in the last couple years, predicting it would be a hit long before it had even been fully developed at Apple back in early 2013 in a column called, “The coolest, most unbelievably revolutionary Apple product ever:”
“The iWatch could be that product, and I can tell you that I am stoked about integrating my iWatch to the rest of my Apple eco-system, if and when the iWatch finally gets here. We need to see some incredible new display/projector technologies and ever simpler ways of engaging the world/Internet/others/etc. with our devices. Wearable computing is sure to be big but I’m not so sure Apple will really commit to that any time soon. They’ve got other opportunities to drive their ecosystem centered around the next-gen iPhones with all kinds of iWatch and/or other wearable computing accessories.”
I’m still disappointed in Apple for not doing whatever it took to get their hands on the iWatch name to brand this new device. The Apple Watch term does perhaps carry a bit more class to it than does “iWatch,” but recall that Apple paid up big to Cisco CSCO, +1.19% to get rights to the iPhone name under Steve Jobs, and I wonder if he’d have wanted the iWatch term bad enough to have gotten it done before this roll out.
Regardless of the name, whether this device booms or busts will be dependent wholly on its functionality and ease of use and ability to get developers to create apps for it. Remember that the Wearables Revolution is built upon and therefore an extension of the App Revolution, as I explained back in May 2013 in a column called “Get in on the wearable computing bubble:”
“Which makes Apple, Google, Amazon and Facebook the purest publicly traded plays on wearable computing for now. You thought the App Revolution Bubble was big and profitable? You ain’t seen nothing yet. Here comes the Wearable Computing Bubble down the pike.”
Remember, too, that the Apple Watch is just the first iteration of a wearables computing device with mainstream potential. There will be many others, as I explained in Best plays on the wearables revolution
The uses/marketplace/applications for wearables don’t even exist yet. The fitbit and the Nike wearables you see around today are like 8-track players before anybody had even invented the Walkman. People like to live better, longer and easier lives. That’s what the future of wearables promises to deliver. Get on board now before you look back in eight years and wonder why you didn’t see it coming.
As for Apple the stock here, well, it depends on your time frame. For the near-term, there’s just too much hype and love and expectations built up here for Apple as this new Apple Watch hits and as it gets included into the DJIA. Longer-term, I expect that earnings and revenue will continue to grow, partly fueled by the success of the Apple Watch (though no matter how big sales of the Apple Watch go, it will take a couple quarters to see those results in the earnings and revenue lines at Apple. I remain long Apple as I have been since 2003 into a classic Steve Jobs product marketing hype job, and I plan to be for a long time to come.
Finally, here’s my podcast all about the Wearables Revolution and why every investor should get in front of it now, while it’s still early. The Apple Watch is just the beginning of a multi-decade Wearables Revolution.
