iWatch Sales Forecasts
Even though Apple did not yet confirm its intentions to enter the wearable technology market with its own smart watch, supposedly called the iWatch, an analyst already made predictions about the potential of an Apple made smart watch. Gene Munster, an analyst working for investment firm Piper Jaffray, recently made a poll among United States consumers and the results indicate that around four percent of all iPhone users would buy a smart watch from Apple; this would amount to sales of about ten million iWatch units, at least in the device’s first year on the market.
In a note that leaked online, Munster wrote: “While we do not view the watch as a likely needle-mover for Apple in terms of revenue in 2014, we put it in a similar category as the television in that it could demonstrate Apple’s ability to innovate (good for the multiple) and potentially lead to a more meaningful new product category in wearable tech [...]”.
The survey questioned 799 consumers from the United States about the long rumored smart watch from Apple and the results indicate that between two and four percents would consider getting an iWatch. Considering the iPhone user base is estimated at around 293 million users, Munster concluded that an eventual smart watch from Apple would sell five to ten million units during the device’s first year on the market.
Consumers that participated in the survey were asked i they would buy the iWatch for $350; to this question only twelve percent answered affirmatively, while the rest answered they would not be willing to pay such a price for an eventual iWatch. “If you assume that Apple sells 7.5 million units in the first year (midpoint of our 5-10 million unit range) at an ASP of $350 and a 30 percent gross margin, it would increase our 2014 revenue estimates by $2.6 billion or 1 percent and gross profit dollars by $790 million or 1 percent [...]” said Munster.
Katy Huberty, a Morgan Stanley analyst, made some predictions earlier this year, in February. She claimed that Apple could sell 50 million to 150 million iWatch units per year, an estimate that is ten times higher than Munster’s prediction. Katy Huberty’s argument for her numbers is represented by the very high number of iTunes accounts (around 500 million) and assumed a penetration rate of twenty to sixty percent for devices priced between one hundred and three hundred dollars. If Huberty is correct, then Apple will get 10 to 15 billion dollars of additional revenues per year.
CIMB Group analyst Wanli Wang reported this Summer, in August, that Apple is going to make its debut on the wearable technology market during the second half of 2014 and will release its iWatch smart watch with a price tag ranging between $149 and $229. Wanli Wang also mentioned that iWatch shipments could exceed an estimated 63.4 million units next year. iWatch related rumors suggest the smart watch will be released with a touchscreen display of 1.5 inches or 2 inches. The iWatch is also rumored to concentrate on biometric functionality and it may feature an OLED display.
