UBS sees Apple selling 21M 'iWatch' units priced at $300 in first year
If Apple does launch a so-called "iWatch" later this year, investment firm UBS believes the ramp up in sales could be similar to the company's wildly successful iPad, hitting 21 million units in fiscal 2015 and 36 million units the following year.
With a projected average selling price of $300, the iWatch could add one to two points of earnings per share growth, analyst Steven Milunovich said in a note to investors on Monday, a copy of which was provided to AppleInsider. At that price, Milunovich believes Apple could achieve product margins at launch around 25 percent, increasing to the low 30s over several quarters.
"We are more confident that Apple will be introducing the iWatch before the holiday season following WWDC's introduction of HealthKit, recent healthcare hirings, the acquisition of LuxVue Technology, and positive comments from Eddy Cue at the Re/Code Conference," he wrote.
Milunovich's estimates would add $6.5 billion in revenue to Apple's projected fiscal 2015, and about $11 billion in revenue to the company's fiscal 2016. He also sees the "iWatch" being 30 to 40 basis points dilutive to Apple's overall margins.
The analyst noted that Apple's first iPhone only moved 5.4 million units in its first year. But after it became well established, the iPad got off to a blistering start, selling 19.5 million units in its first year, and 47.6 million in the second year.
"We expect iWatch sales to roughly track iPad unit sales --?similar penetration rates would mean higher sales," he said. "iWatch might do better because the customer base is larger than when iPad launched and the ASP might be less. On the other hand, iWatch is the first product to be worn, which might not appeal to all users."
UBS's previous 12-month price target for AAPL stock was $700, but with the company's 7-for-1 stock split going into effect Monday morning, the investment firm has a newly revised -- but unchanged -- price target of $100. Shares of Apple opened at nearly $93 and were trading slightly down early Monday.
Last week, the well connected John Paczkowski of Re/code said that Apple is currently planning to hold an event for its "first wearable device" in October. While that device is widely expected to be an "iWatch," he declined to refer to it as a wrist-worn accessory.
Speculation has been mounting for years that Apple may soon enter the growing wearable devices market with its own smart wrist watch that would track health and fitness data. Anticipation of such a device has been bolstered by a number of patents, investments and hires made by the company.
With a projected average selling price of $300, the iWatch could add one to two points of earnings per share growth, analyst Steven Milunovich said in a note to investors on Monday, a copy of which was provided to AppleInsider. At that price, Milunovich believes Apple could achieve product margins at launch around 25 percent, increasing to the low 30s over several quarters.
"We are more confident that Apple will be introducing the iWatch before the holiday season following WWDC's introduction of HealthKit, recent healthcare hirings, the acquisition of LuxVue Technology, and positive comments from Eddy Cue at the Re/Code Conference," he wrote.
Milunovich's estimates would add $6.5 billion in revenue to Apple's projected fiscal 2015, and about $11 billion in revenue to the company's fiscal 2016. He also sees the "iWatch" being 30 to 40 basis points dilutive to Apple's overall margins.
The analyst noted that Apple's first iPhone only moved 5.4 million units in its first year. But after it became well established, the iPad got off to a blistering start, selling 19.5 million units in its first year, and 47.6 million in the second year.
"We expect iWatch sales to roughly track iPad unit sales --?similar penetration rates would mean higher sales," he said. "iWatch might do better because the customer base is larger than when iPad launched and the ASP might be less. On the other hand, iWatch is the first product to be worn, which might not appeal to all users."
UBS's previous 12-month price target for AAPL stock was $700, but with the company's 7-for-1 stock split going into effect Monday morning, the investment firm has a newly revised -- but unchanged -- price target of $100. Shares of Apple opened at nearly $93 and were trading slightly down early Monday.
Last week, the well connected John Paczkowski of Re/code said that Apple is currently planning to hold an event for its "first wearable device" in October. While that device is widely expected to be an "iWatch," he declined to refer to it as a wrist-worn accessory.
Speculation has been mounting for years that Apple may soon enter the growing wearable devices market with its own smart wrist watch that would track health and fitness data. Anticipation of such a device has been bolstered by a number of patents, investments and hires made by the company.
Comments
I love all of these fantasy numbers these dipshits put out all the time. They have no idea what it will look like, or how much it will cost so how the hell do they come to a particular number based on hopes and dreams? Then whats worse, they believe themselves and so do others and of course thats Apple's fault because they didn't live up to these dream numbers based on nothing.
I wish I could just sit on my ass and make up stories and numbers to post to people and get paid millions of dollars like they do.
So you'd be willing to go wrist deep? (That joke probably didn't work)
I love all of these fantasy numbers these dipshits put out all the time. They have no idea what it will look like, or how much it will cost so how the hell do they come to a particular number based on hopes and dreams? Then whats worse, they believe themselves and so do others and of course thats Apple's fault because they didn't live up to these dream numbers based on nothing.
I wish I could just sit on my ass and make up stories and numbers to post to people and get paid millions of dollars like they do.
I would just add that they have no idea what the alleged device will do, nor how it will do it, so it is hard to predict its appeal.
On the other hand - Being an Apple product in an assumed price range, and assuming it will be good looking and desirable, and based on the number of Apple customers world wide I guess it is possible to make a prediction even if nothing else is known.
Those sales numbers he is predicting are really scary big. Samsung sold 800,000 in their first two months of sales of their smart watch. Granted Apple is more than capable of selling more watches than Samsung. If Apple released a watch today, Milunovich's numbers would be 3.6 million watches per month. A guessed at timeframe of October leads to 7 million watches per month. That's a factor of about 5 to 10 times than Samsung is selling. Apple is good, but not that good. Sorry Milunovich, you got this one wrong.
800,000 shipped and sitting on store shelves is not 800,000 sold. I doubt they even sold that many.
I would just add that they have no idea what the alleged device will do, nor how it will do it, so it is hard to predict its appeal.
On the other hand - Being an Apple product in an assumed price range, and assuming it will be good looking and desirable, and based on the number of Apple customers world wide I guess it is possible to make a prediction even if nothing else is known.
You can always assume it will look good and sell well. But I just can't see how these people can make up things based off no information at all. It reminds of the Samsung commercial where everyone is waiting on line outside the store discussing what the specs of the product are before they buy it.
How true. Still Milunovich's numbers are 5 to 10 times larger than the dust bunny collectors.
I predict that Google will get into the wrist-wearable market with a free device that does nothing but collect data about your location and biometrics so that they improve the ads you exposed to online. Ok, perhaps it will also tell time. Or you can upgrade to a non-free version that will have a screen to actually show you ads.
Great analysis.
I love all of these fantasy numbers these dipshits put out all the time. They have no idea what it will look like, or how much it will cost so how the hell do they come to a particular number based on hopes and dreams? Then whats worse, they believe themselves and so do others and of course thats Apple's fault because they didn't live up to these dream numbers based on nothing.
I wish I could just sit on my ass and make up stories and numbers to post to people and get paid millions of dollars like they do.
What’s most disturbing is that individuals and managed funds actually make investment decisions based upon the nonsense that these bozos publish.
800,000 shipped and sitting on store shelves is not 800,000 sold. I doubt they even sold that many.
Samsung is basically throwing them in ceral boxes at this point, and carriers are shoving them down your throat with Samsung phone purchases, for dirt cheap. Every carrier ad I hear on the radio pushes the damn bundles. It's sad, but I assume Samsung have gotten a few sales that way.
This is another attempt to set Apple up to short the stock, they are putting out predictions on a product which they have no clue what it does therefore have no idea what market they would be going after and what the size is of that market.
This is just another attempt by and Analyse to lay the ground work to allow them to short the stock since they will not hit the prediction and then they can claim apple failed.