How Much Value Can Apple Watch Create?
Sep. 12, 2014 10:31 AM ET | 55 comments | About: Apple Inc. (AAPL)
Disclosure: The author is long AAPL. (More...)
Summary
•Under given economic conditions and market demand, Apple Watch can become a $20 billion franchise for Apple.
•Exquisite product design, combined with companion-based product positioning, is the secret sauce for quickly capturing market share.
•Margin Leverage from Watch will defend margin deterioration in the iPhone, iPad segment.
With its ambitious series of announcements earlier this week, Apple (NASDAQ:AAPL) finally proved to the investment community that innovation is back after a three-year gap. The company introduced new products starting with iPhone 6 and iPhone 6 Plus as well as a long-rumored mobile payment system. A long-standing question remains unanswered - how much value can a wearable category create for Apple?
This device will act as a new platform for storing and displaying pictures, maps, and health/fitness activity, integrated a with voice-activated Siri interface. There will be three collections of designs available and across these three collections a total of 18 different strap styles. This will allow consumers to customize their Apple watch - both physically and with software. The gadget that must be paired with an iPhone will remain as a "secondary product" for the foreseeable future. Nonetheless, this device is immaculate in terms of how function meets design and better looking than clunkier offerings from the likes of Samsung (OTC:SSNLF) and Sony (NYSE:SNE).
Dirk (weekendblues)