Priced at or below $150
Few people will pay more than that for a watch.
Proprietary device integration
What if you could get reminders and notifications (texts, twitter mentions, etc.) without having to pull the phone out of your pocket? What if the device had near field communication (NFC) and could serve as a payment device? The possibilities are endless. The majority of iWatch features should only be accessible with a compatible iPhone (the latest version of the iPhone). The iPhone is Apple’s biggest revenue and profit generator. This is where Apple can really shine. The iWatch can be a gateway device to faster upgrade cycles. Samsung and Google Inc (NASDAQ:GOOG) are eating Apple’s lunch globally on market share. Apple’s big advantage is that they integrate their own hardware with their own software. Although Google made the Motorola acquisition, it isn’t as tightly integrated as Apple’s hardware and software offerings. It would be tough for Samsung or Google to compete with a device such as this. That makes the iWatch one tough moat to cross (read more about business moats here).
Fitness Activity Device
NIKE, Inc. (NYSE:NKE) and Garmin Ltd. (NASDAQ:GRMN) dominate the health and fitness device market. Over the past few years, Garmin’s fitness segment, dominated by the Forerunner watch, has been a nice boost to the company with the declining use of GPS navigational devices in vehicles. As a reminder, Apple (with Google) was one of the chief disrupters of that space too by providing integrated mapping services natively within its mobile operating system. Comparing the quarterly financial results on a year over year basis since 2010 shows that Garmin’s fitness devices have experienced >20% sales while their auto/mobile sales have declined >10% in the same time period.
Nike=Fitness to consumers so it just made sense they would make the jump from shoes and clothing to a wearable fitness device with the Fuel Band. The device that captures calories burned throughout the day couples nicely with an awesome mobile application and website. The device has gained in popularity since its release just over a year ago.
Here’s the thing. Apple could easily integrate the technology of these devices into a watch that also offers other functionality. It allows consumers to combine devices and becomes an easy sell for health conscious consumers.
The iWatch is the consumer device that can bring the cool back to Apple and rebound the stock price. What is Apple’s next move? iWatch and see!
Note: That pun was intended and I apologize for my dorkiness.
The article Apple’s Next Move? iWatch and See! originally appeared on Fool.com and is written by Robbie Laney.
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