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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."
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").
The screen is going to be way too small to type on. And if Apple claims that Siri won't run on even older iPhones, it seems unlikely that it's going to run on this watch. So that leaves only the simplest of input options.
And the screen is going to be crazy small for much output, not that it will have much CPU or memory to do much anyway (unless the form factor is HUGE).
The only thing I can figure is that this is going to be a blutooth front-end for an iPhone, but in that case, having a full iOS install seems like overkill.
Has anyone actually seen a working prototype of this thing in action, who could maybe clue us in?
What political party do you join when you don't like Bible-thumpers *or* hippies?
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.
w/ an ever-increasing number of people just pulling out their cell phones as a latter-day pocketwatch.
Not sure what functionality Apple can come up w/ to reverse this --- I really can't see people doing the Dick Tracy thing....
Sphinx of black quartz, judge my vow.
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.
(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.
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.
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
Definitely something for the atypical slashdotter, but if Apple can bring something to the market which combines iOS, the Nike+t, the Fit Bit, and/or the Suunto Core they could potentially capture a good portion of the exercise watch / band market. Current options aren't truly versatile (e.g. hiking, running, backpacking, daily activity), but combine this with Apple's UI and they could produce a very interesting product that I'm likely to try.
Yes, I've looked at Motorola's GPS watches and was far from impressed.
Yeah, but most of that comes from one sale of the $15 billion "Rolex God" to a Saudi prince.
What political party do you join when you don't like Bible-thumpers *or* hippies?
E-monocles
Like an E-Sir.
I have a watch already. It's called a smartphone.
I have a device that runs apps already. It's called a smartphone.
I have a device with Bluetooth for my headphones. It's called a smartphone.
etc. etc.
You might want to learn the difference between share price and market cap. For example, BRK-A is $152,742/share, GOOG is $821/share, and APPL is $420/share. But BRK-A's market cap is $250 billion, GOOG's market cap is $270 billion, and APPL's market cap is $397 billion.
Do you even lift?
These aren't the 'roids you're looking for.
E-monocle
For even more pretension, and less function, try an e-lorgnette.
Those who can make you believe absurdities can make you commit atrocities. - Voltaire
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.
Nobody wears watches anymore! We carry smartphones with time displays in our pockets. Or are those iPocketWatches?
Hmmm let's see
Step 1) Sell iPhone, with clock.
Step 2) People stop wearing wristwatches, use iPhone to tell time.
Step 3) Sell iWatch, with phone. No one carries iPhone anymore.
Step 4) Sell iPocketWatch. It's just like the iWatch, but bigger! And goes in your pocket!
Step 5) Go to step 3. Head assplodes.
We don't have a state-run media we have a media-run state.
Just for the record, isn't this actually the first product line that Steve Jobs has had nothing to do with?
Back when I had a company, I hired a marketing guy who used this magic math. He'd come up with a huge number for the total market size and then tell me that we could capture x% of the market. He also was big on "hockey stick" sales graphs which predicted exponential sales increases "real soon now".
No clue on actually how to do that though... the guy was a psychopathic liar and nothing he ever said worked out.
I don't read your sig. Why are you reading mine?
What you say is true for most people. Some of us apparently didn't get the memo. At our last project meeting, (a gathering of mostly engineers) I counted six of the ten people there wearing the Timex atlantis (me included). This is about the cheapest watch Timex makes. It is not particularly blingy or status worthy. It does however tell time, has a stopwatch and an up down timer. It is also far more accurate than any mechanical timepiece, including any Rolex, no matter what the price.
None of them can see the clouds; The polished wings don't care.
I, too, think that the $6 billion figure for the possible size of an iWatch market to be completely fictional. Not going to happen, but I'd really like some of whatever these guys are smoking to come up with a number like that.
As others have already said, a lot of people no longer wear watches because they now carry cell phones. Still others only wear watches as jewelry. Yes, I take the point others have made here that many/most/all Apple products are fashion statements, so you could argue an iWatch would still be jewelry, but in the world of watches, there seems to be generally two categories of "fashion" watches: watches that are "traditional jewelry" meaning that they are gold/silver/titanium, or made from other "traditional" jewelry materials, and watches that have an interesting/modern design (think the original "Swatch".) An iWatch can't compete against the traditional jewelry market and still have a touch screen. The two designs are pretty orthogonal -- I have a hard time thinking that the watch's function as something pretty/shiny/classic can be shared with something with a usable touch LCD screen and not fail at both. I can see how it might be possible to go after the modern/interesting style of "jewelry" watch with a stylish simple/elegant design -- again, think "Swatch" only with some ipod/iphone features included. (I realize the Swatch group now owns many luxury brands. I'm referring to the primarily plastic modern-looking watches like the original Swatch that came out in the 1980's) Anyway, a modern-styled plastic-case iWatch sounds really workable to me, but will that capture 10% of the market? Not bloody likely. Look at watch sales. Where is all the money being made? At the low-end plastic watches? Nope. The highest sales and margins are in the traditional jewelry-type watches. Something I can't see Apple competing with.
So, if Apple is going for an iWatch, they can't target the high-end jewelry watch market, so that's out. They can't target the low-end quartz or digital watch market, because that is already saturated with low-margin products. Their only hope is to define a new market somewhere in the middle with enough margin to make money. So, what is this watch going to *DO* that will garner more than a yawn from the general population (certain Apple fanboys excepted.)
You've got to do more than tell time. A cheap quartz watch will do that, and do it more stylishly.
So, okay, add in an MP3 player, stop watch, and maybe GPS, and other features runners/cyclists might want.
Yes, an iPhone/Smartphone can do those things, but they aren't as small/compact/portable. That's really all an iWatch might have going for it. -- size. Target the sports crowd so that you don't have to take your iPhone running with you. Otherwise, the crowd that already stopped wearing watches because they have a smart phone won't give it a second look.
Could they pack the ability to make phone calls into a watch? Maybe. Generally the two things that eat power on a smartphone are wifi and the display. Take out wifi (or turn it off) and make the screen much smaller, and you might be able to shrink a cell phone into a watch. That might make an iWatch attractive. However, the nice thing about having a smartphone is all the other things you can do with it --things that are going to be hard on a watch (texting, web browsing, e-mail, playing games, etc.) So, if you buy an iWatch that can make calls, do you also keep your smartphone? Do you have two cellphone contracts? If that's the case, I'd rather just have one device and use (or not) a regular watch. The trend in smartphone screen size is going bigger, not smaller. So, the iWatch as a cellphone replacement doesn't seem to make sense.
Really, the only market opportunity I can see for an iWatch is as a wearable ipod with more features (like GPS, maybe have it sync with your iPhone calendar to alert you to appointments, etc.) That could actually be kinda cool. Would I buy one? No. Will it grab 10% of the watch market? Um... probably not.
there is approximately a 100% chance that apple will never have 100% of the market. There is actually a lot of competition in the watch market, and apple is not the only entrant - they're just like Microsoft, a late entrant to the market.
The only reason the iPhone was as successful as it was is because the total cost in the US was concealed inside phone plans. If it had been for sale at the full price of $800-$1000 that carriers were paying it would have been a commercial failure in the US.
The US market is highly price sensitive, a do everything product that everyone wants might not sell at all because it's $50 outside people's price threshold.
Could have just said:
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I can only assume you have no kids and don't know any kids, nor have seen any kids lately. I worked for a youth fashion retailer a couple of years ago and watches are huge with the young cool people. My daughter is a tween and her and all her friends have them and love them. They are no longer just a time piece, they are a fashion accessory.
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.
If you are not allowed to question your government then the government has answered your question.
Remember Swatches? They were cool when I was a kid. Some people would wear 5 or 6 of them at a time.
If you are not allowed to question your government then the government has answered your question.