Apple Inc. (NASDAQ:AAPL) products look as good when they come out as they look in their intensive publicity campaigns. And they do perform well against their competitors’ products. With all the hype that has been created, one senior investment expert says Apple Inc. (NASDAQ:AAPL)’s watch may live up to the excitement of the money spent on it, but it would still be a matter of whether people would want to wear an Apple Inc. (NASDAQ:AAPL) branded watch-cum-fitness band. Mark Hawtin, Investment Director at GAM, was on CNBC’s Tech Check to express his views on why he does not feel Apple Inc.’s Watch will be a game-changer.
“I personally think it is unlikely to be a game changer. I think we need to see where wearables have come so far: last year Samsung sold about 2 million units of their wearable device but the market has huge, huge expectations for Apple. People are expecting 20-30 million units of this watch to be sold. Having seen the launch yesterday, there is not a great deal that is new: it is more evolutionary than revolutionary. So, I think it is more likely to disappoint, at least initially, in terms of numbers. Many people would be looking to Apple Watch 2 rather than unnecessarily diving into first version,” Hawtin said.
Apple Inc.’s Watch comes with a range of fitness-oriented applications which according to Hawtin are its best features, but consumers can buy those same features in a variety of fitness bands with a price three times less than Apple Inc.’s Watch. While Apple Inc. has spent mammoth amounts of money on publicity campaigns to save its Watch from being tagged as an accessory, Hawtins does not believe this watch will sell millions of units. He does not think Apple Inc. can take the traditional watch market apart with this watch either. He believes it is evolutionary, not revolutionary.
“The iPod brought something very new at the time. The watch does not bring anything particularly new. […]. I think it is much harder to see this opportunity – we already have watches and we already have a whole array of fitness bands. The only thing really that watch brings in terms technology is the fitness orientated applications. And those already exist on the bands that are third its price. So, it’s going to come down to whether people want to wear an Apple branded fashion item. I can see some people wanting to do that. But I don’t see it being a 20-30 million unit market – taking a huge share of the traditional watch market,” Hawtin said.
GAM, Hawtin’s asset management group, where he manages investment strategies, does not hold Apple Inc. at the moment. Hawtin maintains there are better returns elsewhere in the technology sector.
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