10% might seem a lot especially for a company, the size of Apple Inc. (NASDAQ:AAPL), whose revenues have been compared to the GDPs of various countries, and it was the countries in many of these cases, which were found wanting. According to an article by Tiernan Ray on Barron’s, Apple Watch seems to be very much in place to achieve the 10% increase feat. in Apple’s revenues.
While Ray’s own input centers around the more qualitative and aesthetic elements of Apple Inc. (NASDAQ:AAPL)’s new gadget, which is scheduled to be released in April this year, the mathematics behind the 10% bump is borrowed from Rod Hall, who follows Apple for JPMorgan Chase. Hall expects the Cupertino based tech giant to sell nearly 26 million watches in this calendar year. While there is a $1,000 and a $4,000 steel and gold version of the watch respectively, 95% of the sales are expected to come from the less fancy $400 model. This mix would end up boosting the top line of the company by a staggering $23 billion.
Coming back to the question whether such numbers are even realistic is an even more dodgy investigation. It is not even easy to predict the future of products that aim to cater to a much more concrete market segment in terms of catering unmet consumer needs, let alone the case of Apple Inc. (NASDAQ:AAPL)’s new market entrant, which is at best subservient to another product, which is still in the consumers pocket. Is a product adding the utility of not making one reach for their pocket, but glancing at their wrist instead really worth $400.
Ray argues that it is, and highlights features such as sending instant replies to text messages by either recording a message or sending preset snippets such as “I will get back to you,” directly from the watch, with a “tap on the wrist” as he puts it. I don’t see how this tap on the wrist is a long way from a tap on the phone.
Apple Inc. (NASDAQ:AAPL)’s Watch, at least in the form of its first version, will have a very hard time convincing people to spend that kind of money for a gadget that is anything but essential. However, if the company continues to expand the horizons of its product, and there is considerable expansion that is
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