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Apple Inc. (AAPL)’s Watch a Big Gamble as a Niche Product: Neil Hennessy

Stakes are high in the wearable space as companies rush to convince consumers that smartwatches are poised to be the next big thing. Questions are already being asked whether Apple Inc. (NASDAQ:AAPL) will get it right with Apple Watch, with Hennessy Funds chief investment officer, Neil Hennessy, remaining skeptical of its ability to live to the hype like the iPhone product cycle. During an interview with CNBC, Hennessy said Apple Watch may end up being a niche product.


It remains to be seen if Apple Inc. (NASDAQ:AAPL) will be the company to convince people to invest in the smartwatch in masses as success in this area will help silence critics of the company. There is no doubt that the watch might end up being a breakthrough fashion-tech accessory that the wearable industry has been yearning for, backed by a  huge marketing campaign that is to be initiated by Apple.

“The difference with the watch compared to the  phones is the phones had that type of aura that I have to have to have that and I am not sure you are going to get that with the Watch. [..] I think it is going to be a niche product, and it is not going to be what they are hyping it to be,” said Mr. Hennessy.

The fact that the watch works only with the latest versions of the iPhone shuts down millions of potential buyers on rival platforms who would have wished to own it, which makes it even more of a niche product. The hefty price tag for the gold-coated version of the watch could also limit Apple Inc. (NASDAQ:AAPL)’s ability of enjoying the mass market appeal in the $10,000 plus price range.

“Not to make a joke out of it, but if you are going to try and sell a $17,000 watch it better be something on the very high end.[…] I just think it is a niche product. It is not going to do a whole lot for them. They are going to have to come out with something a lot bigger like a Google or car or whatever,” said Mr. Hennessy

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