Apple's iWatch Could Come With IOS, Earn $6 Billion a Year

Nerval's Lobster writes "Apple's long-rumored "iWatch" could earn the company $6 billion a year, if an analyst quoted by Bloomberg proves correct. Citigroup analyst Oliver Chen estimated the global watch industry's annual revenue at $60 billion a year, with gross margins of roughly 60 percent. "This can be a $6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod," he told the newswire, "something consumers didn't even know they needed." Meanwhile, The Verge reports that Apple has " chosen to rework the full iOS to run on the watch instead of building up the iPod nano's proprietary touch operating system," which has led to battery issues: while Apple would like the device to last "at least 4-5 days" between charges, the current prototypes give somewhat less. While an "Apple TV" long dominated the rumor mill as Apple's next big product, the frequency and detail of "iWatch" rumors over the past few weeks suggests that a timepiece could be the company's next big project."

Comments

"totally new like the ipod"

[sneezinglion]

Say what? Exactly what was totally new about the ipod?

I suppose you could say the design of the case was new, but MP3 players were out before the iPod.

Re:"totally new like the ipod"

[Anonymous Coward]

The generic MP3 player is just a solid-state version of the Sony Walkman. The Stereobelt, ancestor of the Sony Walkman, was new. In my opinion, there's been nothing particularly novel about any of the derivatives.

Re:"totally new like the ipod"

[SilentStaid]

Exactly what was totally new about the ipod?

It worked out of the box, as intended and easily for everyone from soccer moms to geeks and everything in between. It looked slick, the marketing campaign was tight and most importantly it fulfilled the needs of 'the majority' of consumers better than any other product on the market. Bash Apple all you want, but if you deny that I'd assume you're being deliberately obtuse.

Re:"totally new like the ipod"

[MightyYar]

It was "totally new" in terms of being the first commercially viable product of its kind. There were flash-based players that held a few songs, laptop-drive based players that held more music but were not pocketable, and even MP3-capable CD players with the same problem. And then there was the issue of connectivity - the iPod used a much faster 1394 connection which made it feasible to sync. Even the similarly-sized Toshiba that came out shortly after the iPod - using the same drive - used a horrid DRM that made the device extremely painful to use. It was not a new idea, but then neither was the first airplane, telephone, or lightbulb.

very uncertain conversion

[Algae_94]

I'm not sure how well traditional watch sales would convert to iWatch sales. traditional watches are really more of a jewelry piece, not a highly functional device, they just happen to have a couple of functions. At the same time, it is very much not clear if iWatch devices would cannibalize iPad/iPod/Iphone sales. To just estimate $6 billion of sales at a product we don't even know if its real sounds like analysts trying to pump up AAPL share price.

Re:very uncertain conversion

[fuzzyfuzzyfungus]

Honestly, it seems like the 'analyst' pulled the number straight out of his ass even by financial analyst standards.

Aside from the problem you note(today's watch spending is heavily skewed toward overpriced jewelry and 1$ quartz cheapies by the metric ton, which doesn't tell you how big the market for a 'far more expensive than a cheapie, far more powerful and less purely aesthetic than jewelry' product would be), why the focus on revenue?

Apple doesn't give a damn about revenue, never has, they care about profit(so, theoretically, do all for-profit corporations; but Apple is particularly aggressive about simply ignoring segments whose margins don't excite them).

In terms of Apple's ability to make a profit on watches, today's watch market tells us essentially nothing: the cheap seats tell us nothing because Apple would never hit those price points, the expensive seats tell us nothing because Apple doesn't do jewelry. As it stands, the market for 'smart watches' is vanishingly small, almost wholly irrelevant to the watch market generally.

Re:very uncertain conversion

[AmiMoJo]

traditional watches are really more of a jewelry piece

iDevices are to some extent jewellery too. All the way back to the white headphones that came with the original iPod and all the posers with their original iPhones or talking to Siri in Starbucks.

Come On!

[Anonymous Coward]

(Posting AC because I'm at work)

Look, I'm a huge Apple fanboy, believe me, but come on! We're posting articles from FINANCIAL ANALYSTS now? When these nimrods have something valuable to say, it'll already have been old news for several months. His entire job is built on speculation and generating (or deflating) interest in a company. He does NOTHING OF VALUE! And we're going to put stock in his thoughts?

Come on. I know the Slashdot of yesteryear is gone and dead but let's not post commentary from financial analysts, even if it is about Apple.

What kind of astrotrash is this?

[Pecisk]

iWatch? 6 billions a year? I mean, seriously? Or is it some crazy Apple shareholder wanting to jump a ship and spamming like crazy all channels to get price up "back where it belongs"?

Apple is history as supergrowth company. Niche products. No amount of hype will save it from fall. And this show screwed logic of public companies in US - it's all about "supergrowth", not profit.

I love watches, but won't get this

[kannibal_klown]

I love watches: mostly purely mechanical (automatic) watches. I have a couple of them: ranging from hundreds of dollars to $2,000. I think they're great, and love the mechanical nature. I have a couple of digital ones because I think they're neat, but I don't wear them that often. The digitals are also cheap so when I wear them when I travel or something.

That being said: I can't imagine myself getting this one. Sure, on one hand I guess it's interesting... but no.

As it stands, a watch is pretty much just jewelry now-a-days... clocks are everywhere and most of us already have cellphones to check the time. Now to put an iOS device on your wrist instead of your pocket. No thanks.

I mean, I could see wanting to get the Google Goggles more than this thing and THAT's saying something.

Re:Does anyone use watches anymore?

[tyrione]

This could be really cool if they were able to pack the functions of an iPhone into a stylish looking watch.

However, until they've got the tech that well established, it's going to be a hard sell for most of us: we replaced our watches will cell phones and, in the interest of not carrying duplicate expensive devices, rely on the phone exclusively to tell time.

Watch sales are nearly $20 Billion, annually, so yes, ``someone still uses a fucking watch.'' http://www.fhs.ch/en/statistics.php

Re:Great, but what does it *DO*?

[CanHasDIY]

Aside from the fact that the Apple logo alone will have people lined up outside of Apple stores across the country to buy this thin, I'm inclined to ask what this watch actually DOES (aside from the obvious "tells time").

I can tell you one thing it doesn't do, as of this writing:

Exist.

Re:What time is it?

[poetmatt]

don't worry, your comment is about as valid as the article's magic math.

Basically: let's come up with a value for a market
and then: let's imagine apple getting 10% of that market. Forget costs, forget how they get to 10% or how long it takes them to get there. Let's just magic that they do.

cause/reality/logic? None of the three exist. Possibly the dumbest people on businesswatch aside from everyone else at businesswatch.

Re:Hey... kid...

[tompaulco]

Yeah like how do you even tell the time on a phone?!

Easy, by spending more time on taking it out of your pocket and putting it back afterwards than on actually looking at the time....

What's really funny is how often I wonder what time it is, so I dig my phone out, then notice I have texts or e-mails or whatnot, then after checking that out, put the phone back in the holster, then several seconds later, I still wonder what time it is.