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Morgan Stanley sees 'iWatch' ringing up $17.5B from iPhone users in first year

post #1 of 85
Thread Starter 
Apple's entry into the wearables market with a so-called "iWatch" could be an extremely profitable move for the company, with one investment bank predicting that the device will add up to $17.5 billion to Apple's coffers in its first year of sales.

iWatch
iWatch concept by Todd Hamilton


The estimate came in a Tuesday morning research note to investors from analyst Katy Huberty of Morgan Stanley. Huberty believes first-year sales of the wrist-worn device would outstrip even the iPad's impressive $12 billion debut.

Central to Huberty's thesis is Apple's positioning of the iWatch as a natural accessory to tens of millions of existing iOS devices rather than as a fledgeling product category like the iPod and iPhone were when they were first introduced. This would open the market to existing owners of the iPhone and iPad, she argues, as well as first-time Apple mobile device buyers.

Huberty's $17.5 billion first-year figure assumes an average selling price of $299 and no supply chain constraints. If supplies of the device were constricted, she believes revenues would fall to a still-imposing $10 billion to $14 billion.

Though Apple has yet to announce the so-called iWatch, many Apple watchers --?including Huberty --?believe that Apple's continued investments in infrastructure and research and development foretell the company's entrance into the market. The company posted 30 percent year-over-year increases in research and development spending from 2010 to 2013, and capital expenditures are poised to rise significantly.

Apple's "guidance for $10.45B of capital expenditures (non-cash and excluding retail stores) for FY14, which Apple just reaffirmed in the latest 10-Q, is up 32% from $7.9B in FY13. We believe this is an indication that Apple is investing in new product categories as single-digit iPhone and iPad growth no longer demands significant increases in capital expenditures," Huberty wrote.

Apple is believed to have a team of more than 100 working on the iWatch, which is expected to contain advanced biometric capabilities. The company has added a slew of fashion and medical industry veterans in recent months --?including former YSL CEO Paul Deneve, Nike design director Ben Shaffer, and medical devices veteran Michael O'Reilly --?who are thought to be focused on the device.
post #2 of 85

Very impressive for a make believe product.

post #3 of 85
So WS predicts boffo $$$ for an imaginary product so it can drive Apple's stock down in reality when this product is "delayed" or "cancelled."
post #4 of 85
From press release to "article."

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #5 of 85
That concept truly nailed how Apple products look like. It looks so shiny, rounded and soft. The screen won't be that size, but that may be the best concept I've ever seen. The bracelet is exactly like what I imagined for the iwatch myself. Just a big ring. What's simpler than that?
post #6 of 85

Bull! And, this reaction is just from the title!! Apple has not even announced a product!!! I have a morbid interest in reading the asinine crap the analyst is spewing.  :-(((

post #7 of 85
Quote:
Originally Posted by AppleInsider View Postositioning of the iWatch as a natural accessory to tens of millions of existing iOS devices rather than as a fledgeling product category like the iPod and iPhone were when they were first introduced. This would open the market to existing owners of the iPhone and iPad, she argues, as well as first-time Apple mobile device buyers.

 

I don't understand this.  The iPod was not a "fledgeling" if that means a stand-alone product.  It was introduced as an accessory to the Mac.  Without a Mac, the product was a boat anchor.  The iPhone too was not introduced as a stand-alone.  It too needed a computer to sync.  

 

And introducing the watch as an accessory to the iPhone would "open the market" more than if it were a "fledgeling"?  

 

Sorry.  I don't understand what she is saying. 

post #8 of 85

.................... Katy Huberty  <full stop>

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post #9 of 85
Katy Huberty. What a maroon.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #10 of 85
I have a real problem with an analyst predicting income on a product that has not been announced. Apple has not even confirmed that they are making an iWatch. My prediction: Apple will create a flying starship in 2015 that will sell for $199 and create $83.69 million of profit in the 1st week.

You heard it here first.
post #11 of 85
Quote:
Originally Posted by Apple Investor View Post

I have a real problem with an analyst predicting income on a product that has not been announced. Apple has not even confirmed that they are making an iWatch. My prediction: Apple will create a flying starship in 2015 that will sell for $199 and create $83.69 million of profit in the 1st week.

You heard it here first.

Did you mean revenue or profit? Because if you meant revenue, then I will downgrade AAPL to underperform on weak sales of only 420,000 starships. An area ripe for growth
post #12 of 85
Quote:
Originally Posted by justp1ayin View Post

Did you mean revenue or profit? Because if you meant revenue, then I will downgrade AAPL to underperform on weak sales of only 420,000 starships. An area ripe for growth
1smile.gif to you and Apple Investor.
post #13 of 85

Not even an idiot would trust the advice of that company.

Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
Reply
post #14 of 85
Quote:
Originally Posted by Apple Investor View Post

I have a real problem with an analyst predicting income on a product that has not been announced. Apple has not even confirmed that they are making an iWatch. My prediction: Apple will create a flying starship in 2015 that will sell for $199 and create $83.69 million of profit in the 1st week.

You heard it here first.

That's it? SELL! SELL! SELL!
post #15 of 85
Quote:
Originally Posted by leavingthebigG View Post
 

Bull! And, this reaction is just from the title!! Apple has not even announced a product!!! I have a morbid interest in reading the asinine crap the analyst is spewing.  :-(((

I read the story and remembered last year's sudden discovery of millions upon millions of "white box" tablets that had miraculously entered into the marketplace. Katy was one of the analysts who lowered her iPad estimates due to the discovery of the tablets. IF Apple does come out with an "iWatch" this that racks up BILLIONS of dollars and MILLIONS of sales as Katy predicts, why do I have the cynical feeling Katy and crew will find a way to promote "white box" watches having eclipsed "iWatch" sales and earnings some time in 2015?

post #16 of 85

Morgan Stanley's prediction of only $17.5B was below the Street's expectation of at least $19.7B for the iWatch in 2014, which caused Apple stocks to plummet 17% in the first 10 minutes after the announcement.

post #17 of 85
And so begins the analysts dartboard throws
post #18 of 85
Quote:
Originally Posted by SudoNym View Post

I don't understand this.  The iPod was not a "fledgeling" if that means a stand-alone product.  It was introduced as an accessory to the Mac.  Without a Mac, the product was a boat anchor.  The iPhone too was not introduced as a stand-alone.  It too needed a computer to sync.  

And introducing the watch as an accessory to the iPhone would "open the market" more than if it were a "fledgeling"?  

Sorry.  I don't understand what she is saying. 

I believe that she is suggesting that an "iWatch" that somehow extends the capabilities of an iPhone will be a very popular device as opposed to "only" a fitness and health accessory. For example, an "iWatch" that presents notifications and enables the user to act upon notifications without directly using their iPhone would essentially extend the battery life of an iPhone for many users.

In my opinion, the two killer features possible with an iWatch are extending the battery life of the iPhone and offering additional security capabilities (either biometric heartbeat sensor or required pairing with the iWatch for the Apple payment solution ("iWallet") to function). I doubt either of these will occur, however, as this creates dependency on the pairing for the expected "iWallet" solution which seems unlikely.
Edited by MacBook Pro - 2/4/14 at 8:11am
post #19 of 85
Quote:
Originally Posted by MacBook Pro View Post

I believe that she is suggesting that an "iWatch" that somehow extends the capabilities of an iPhone will be a very popular device as opposed to "only" a fitness and health accessory. For example, an "iWatch" that presents notifications and enables the user to act upon notifications without directly using their iPhone would essentially extend the battery life of an iPhone for many users.

In my opinion, the two killer features possible with an iWatch are extending the battery life of the iPhone and offering additional security capabilities (either biometric heartbeat sensor or required pairing with the iWatch for the Apple payment solution ("iWallet") to function). I doubt either of these will occur, however, as this creates dependency on the pairing for the expected "iWallet" solution which seems unlikely.

Actually what I think she means is that with the iPhone and iPod, you needed a computer, but not an iproduct or a Mac, with this new device, it will be made solely for iUsers (iPhone, iPad, etc). Meaning it's not as open to everyone as the previous products
post #20 of 85

LMAO. A new low for analysts shorting Apple into the ground. A fictional product with fictional market demand and unknown pricing is already forecast to bring in 17 billion in revenue year 1 or its a failure.

 

Any chance we just stop re-publishing this utter garbage?

post #21 of 85
Quote:
Originally Posted by SpamSandwich View Post

Katy Huberty. What a buffoon.

Fix that for you....

 

The total watch market size is not that big to day and continue to decline what makes anyone think it would grow that fast, Apple is not that good.

 

She must be a good lay, not sure how else you keep your job with such a bad track record


Edited by Maestro64 - 2/5/14 at 9:03am
post #22 of 85
Quote:
Originally Posted by justp1ayin View Post

Did you mean revenue or profit? Because if you meant revenue, then I will downgrade AAPL to underperform on weak sales of only 420,000 starships. An area ripe for growth

Weak sales = you predicted Apple will sell 420,001 starships. They clearly missed this mark so the stock will suffer as a result.
post #23 of 85
Fledgling: adj. New and untried or inexperienced: a fledgling enterprise.

Seems to me that every new product that comes on the market would be "fledgling".
post #24 of 85

This looks purely like a stock-pumping exercise to me. I'm guessing some big MS clients took a big hit with the recent dip in AAPL, and KH is simply doing her best to help them recover. After all, there is no actual news here, it's a completely hypothetical "IF Apple does X, then Y" ... in other words a positive but vacuous puff-piece. 

post #25 of 85
Quote:
Originally Posted by Maestro64 View Post
 

Fix that for you....

 

The total watch market size is not that big to day and continue to decline what makes anyone think it would grow that fast, Apple is not that good.

 

She must be a good lay, not sure how else you keep you job with such a bad track record

Look's like she'd be a good fit for Fox News. Don't know anything about her private life. :-)

 

post #26 of 85
Quote:
Originally Posted by ClemyNX View Post

That concept truly nailed how Apple products look like. It looks so shiny, rounded and soft. The screen won't be that size, but that may be the best concept I've ever seen. The bracelet is exactly like what I imagined for the iwatch myself. Just a big ring. What's simpler than that?

I've seen a few concepts that are very rigid around the wrist strap and wonder if the people making them bothered to look at their own wrists. They aren't circular for a start, they are elliptical and they come in many sizes so the strap has to be flexible, not least because it has to come on and off the wrist but also for comfort.

At best, the top would be curved like the Galaxy Gear 2 mockup here:

http://thediplomat.com/2014/01/samsung-galaxy-gear-2-preview/

but that means a curved battery. Apple has a patent for such a thing:

http://www.techradar.com/news/portable-devices/other-devices/apple-s-curved-battery-patent-hints-at-ergonomic-iwatch-1156684

Apple will experiment with lots of product ideas but they'll only come out if they can make them worthwhile. They already worked on things like Google Glass years ago but as Google Glass has demonstrated, it just doesn't quite work well enough to bother taking it to market:

http://bgr.com/2013/12/10/apple-virtual-reality-goggles-patent/
post #27 of 85

Wanna know why AAPL tanks after every quarterly results? THIS is why. Speculation about income from unannounced products, expectations that exceed Apple’s guidance. It’s all pure, unadulterated bullshit pulled right out of some analyst’s ass or twat. 

post #28 of 85
Quote:
Originally Posted by Maestro64 View Post
 

Fix that for you....

 

The total watch market size is not that big to day and continue to decline what makes anyone think it would grow that fast, Apple is not that good.

 

She must be a good lay, not sure how else you keep you job with such a bad track record

 

Does that mean that you think that Gene Munster is a good lay?

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post #29 of 85
Quote:
Originally Posted by MacBook Pro View Post

I believe that she is suggesting that an "iWatch" that somehow extends the capabilities of an iPhone will be a very popular device as opposed to "only" a fitness and health accessory. For example, an "iWatch" that presents notifications and enables the user to act upon notifications without directly using their iPhone would essentially extend the battery life of an iPhone for many users.

In my opinion, the two killer features possible with an iWatch are extending the battery life of the iPhone and offering additional security capabilities (either biometric heartbeat sensor or required pairing with the iWatch for the Apple payment solution ("iWallet") to function). I doubt either of these will occur, however, as this creates dependency on the pairing for the expected "iWallet" solution which seems unlikely.

Quote:
Originally Posted by justp1ayin View Post

Actually what I think she means is that with the iPhone and iPod, you needed a computer, but not an iproduct or a Mac, with this new device, it will be made solely for iUsers (iPhone, iPad, etc). Meaning it's not as open to everyone as the previous products

"Our working assumption is that iWatch largely will be adopted as an accessory device and, therefore, sold into the existing customer base, like the iPad, rather than to new customers, like the iPod or iPhone," Huberty said in an an investors note released on Tuesday.

She appears to be suggesting that Apple will sell the "iWatch" to existing customers rather than new customers.

1. Lance Whitney; Apple iWatch could trigger sales as high as $17.5B -- analyst; cnet; February 4, 2014
post #30 of 85
I'm an iPhone owner and I have zero interest in a watch of any kind. Certainly not some expensive wearable electronic jewelry.

One of the primary functions of my iPhone is to be a clock and all the other things a watch does. Beyond that, it's a portable computer with robust Internet access, a calendar & reminder book, and it's the best GPS I've used. It's even a somewhat usable telephone. What the hell else could I want in a small pocket item??

I have no need for other gadgets. I was going to get an iPad for partial laptop replacement, but then iOS 7 happened. I have little faith in Apple's iOS future and I'm scared about Mac OS X's future once the GUI-ignorant Jony Ive gets at it, because it is my computing platform of choice (my only choice, at this point).

I could NOT possibly care any LESS about any so-called hypothetical iWatch.
post #31 of 85
This is what fiction writers do. They take an idea and then create a story around it. You always start with some nugget of truth like the physics of your universe for science fiction or historical documentation for historical fiction. These projections are no different than any other fictitious storyline except they stop after creating a meaningless outline that has no actual story. It's Financial Fiction, nothing more. We shouldn't treat Huberty or any of these other frauds looking for page hits as modern soothsayers. This is just Fin-Fi.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

Goodbyeee jragosta :: http://forums.appleinsider.com/t/160864/jragosta-joseph-michael-ragosta

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

Goodbyeee jragosta :: http://forums.appleinsider.com/t/160864/jragosta-joseph-michael-ragosta

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post #32 of 85

A downside and upside just occurred to me...

Upside: less interpersonal distractions. Instead of having a phone out on the dining table, screaming 'look at me!' all the time, and with virtually infinite ability to drill down (and away from real life), a wearable just gives you the 'headlines'. If its important, then yeah, pull out the phone and deal with it. But less likely to draw you in to your wrist.

 

Downside: Is there a greater universal signal that I'm really bored with you than looking at my wrist? I even use that sign when I don't have anything on my wrist to look at! I think it should be added to International Sign Language to mean 'Hurry the F** up already!'

post #33 of 85

I'd buy one if I could press a button and it made my iPhone ring. 

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post #34 of 85

I've had my doubts, but the FDA aspect brings up the potential to plug into the recent "quantified life" trend and that has distinct possibilities. Then again the boomers are getting old so there's utility in better self-health monitoring across the board.

 

The FDA visit itself? Possibly to work out where the regulatory boundaries are so Apple can AVOID stepping over into medical device-land.

post #35 of 85
Interesting to note that the same analyst predicted 5-6 M iPads would be sold in 2010 (first year of release) when it was released (ipad ended up selling 15 M in 2010). If she could be off by a factor of 3 on an announced product, what is her range on an announced product? I predict the the iWatch will sell between 1 to 1 trillion units when it is released.
post #36 of 85
Quote:
Originally Posted by SpamSandwich View Post

Katy Huberty. What a maroon.

You say some pretty dumb stuff, too. Are you a moron? I'd say she is less of a moron because she gets paid for saying these things.

post #37 of 85
Quote:
Originally Posted by StruckPaper View Post
 

You say some pretty dumb stuff, too. Are you a moron? I'd say she is less of a moron because she gets paid for saying these things.

 

Case closed, I suppose. Or is it that you've kind of put your foot in it? Spam has been on these forums for years and has consistently said sensible things, while often injecting perspective into threads. Why he's calling her a moron in this case is obvious: she's predicting a $17.5B year-one for a product no one outside of Apple knows for sure exists, no one knows what it will cost if released, or if it'll ever see the light of day if in fact it is legit. Such a crazy and specific prediction for an unannounced Apple product such as this is stupid at best, and a reckless market manipulation-tactic at worst.

 

Thusly, then, it would be stupid to make such a prediction. Which would making her stupid. And 'a stupid sermon' is a moron according to Oxford. People get paid for saying stupid things all the time. It's a terrible argument to make.


Edited by Ireland - 2/4/14 at 10:01am
Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of a rumoured device - Comedy Insider (Feb 2014)
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post #38 of 85
Quote:
Originally Posted by SudoNym View Post
 

 

I don't understand this.  The iPod was not a "fledgeling" if that means a stand-alone product.  It was introduced as an accessory to the Mac.  Without a Mac, the product was a boat anchor.  The iPhone too was not introduced as a stand-alone.  It too needed a computer to sync.  

 

And introducing the watch as an accessory to the iPhone would "open the market" more than if it were a "fledgeling"?  

 

Sorry.  I don't understand what she is saying. 

Fledgling does not mean stand alone. It means new, as a in a new product category (unaffiliated with the iPhone). 

post #39 of 85
Quote:
Originally Posted by Ireland View Post
 

 

Case closed, I suppose. Or is it that you've kind of put your foot in it?

Nice try. But you missed (not that you'd either realize or admit it).

post #40 of 85
Quote:
Originally Posted by Marvin View Post


I've seen a few concepts that are very rigid around the wrist strap and wonder if the people making them bothered to look at their own wrists. They aren't circular for a start, they are elliptical and they come in many sizes so the strap has to be flexible, not least because it has to come on and off the wrist but also for comfort.

At best, the top would be curved like the Galaxy Gear 2 mockup here:

http://thediplomat.com/2014/01/samsung-galaxy-gear-2-preview/

but that means a curved battery. Apple has a patent for such a thing:

http://www.techradar.com/news/portable-devices/other-devices/apple-s-curved-battery-patent-hints-at-ergonomic-iwatch-1156684

Apple will experiment with lots of product ideas but they'll only come out if they can make them worthwhile. They already worked on things like Google Glass years ago but as Google Glass has demonstrated, it just doesn't quite work well enough to bother taking it to market:

http://bgr.com/2013/12/10/apple-virtual-reality-goggles-patent/

 

I still think the concept show is doable, but it wont be a perfect circle like shown indeed. Beside the design, I am hoping Apple makes "killer apps" or usage for those watch, something medical for example, or features that links to an iphones and allow to use the watch instead of briging out the phone.

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