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UBS sees Apple selling 21M 'iWatch' units priced at $300 in first year

post #1 of 42
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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.

iWatch
iWatch concept by Todd Hamilton


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.
post #2 of 42
I think I would buy an iWatch. I'm already in neck deep with Apple, so why not?
post #3 of 42
And yet.. no leaked hardware to even hint at what it would look like.. I smell a flop with Analyst prediction of an iWatch this year.. or iBand, or such..
post #4 of 42
In other words UBS analysts pulls completely random projections out of his you know what because that is what he is paid to do. When he is completely wrong in either direction he'll "revise" his numbers again. Then he'll do it again and again. Total waste of space these analysts.
post #5 of 42

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. 

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post #6 of 42
I don't get these reports. I think a reasonable report of unit sales could be made if they had a graph that detailed various potential price points but to just project a $300 as the MSRP seems foolishly limited. Did they learn nothing from the iPad?

Quote:
Originally Posted by MrPezman View Post

I think I would buy an iWatch. I'm already in neck deep with Apple, so why not?

So you'd be willing to go wrist deep? (That joke probably didn't work)

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post #7 of 42
"I think I would buy an iWatch. I'm already in neck deep with Apple, so why not?"

1smile.gif
post #8 of 42
Quote:
Originally Posted by macxpress View Post
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. :no:

post #9 of 42
Set up to fail. Imaginary product on pace to sell as much as iPad . We haven't seen it.
post #10 of 42
I predict iWatch "red" sells for a hundred grand.
post #11 of 42
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.
post #12 of 42
Quote:
Originally Posted by imagladry View Post

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. 

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post #13 of 42
Quote:
Originally Posted by paxman View Post
 

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. :no:

 

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. 

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post #14 of 42

How true. Still Milunovich's numbers are 5 to 10 times larger than the dust bunny collectors.

post #15 of 42

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.

post #16 of 42
So he basically says it may do as well as the iPad as there is a potentially higher base of users but that it is the first ever worn device so it may have a potentially lower base of users.

Great analysis.
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post #17 of 42
Quote:
Originally Posted by macxpress View Post
 

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.

post #18 of 42
Quote:
Originally Posted by macxpress View Post
 

 

 

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. 

post #19 of 42
Fewer people are wearing watches due to using their phones for the time. Watches are barely more than a fashion statement at this point. I don't know why anyone would buy a "smart" watch that has to be charged every day or two and is very limited in what it can do. It can't compete with a phone. After all the geeks buy one (The same people who used to sport calculator watches) and then athletes, who's left? I just don't see the average Joe buying one of these. And don't trust Samsung's 800,000 sales number... They lie, cheat and steal whenever they can. I see the whole smart-watch market as a black hole that will never make enough to cover the R&D plus marketing to even get to the break even point!
post #20 of 42
Analysts also predicted we'd all be using Windows Phones by 2012.

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post #21 of 42

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.

post #22 of 42
Quote:
Originally Posted by Slurpy View Post
 

 

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. 

 

You'll do anything when you've over produced any nobody is buying them. 

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post #23 of 42

I am skeptical. While there is no question that the threshold question for AAPL is profitability, they will also not make a crap product that damages their brand. They've done it before with mobileme (Steve's famous rant at the group that rolled it out is a fun read) and maps (the poor guy that rolled that out unprepared is now essentially persona non-grata at 1 Infinite Loop).

 

That said, at $300 it better be a wow product. No idea what it can or will do, but if it is just a watch, or some half baked sport monitor, forget it.

post #24 of 42

Likely. How does the SEC not act on this?

post #25 of 42
Quote:
Originally Posted by lkrupp View Post
 

 

What’s most disturbing is that individuals and managed funds actually make investment decisions based upon the nonsense that these bozos publish.

 

May or may not be the best approach...buy if I were a major Apple investor, I'd take the wait and see approach and never listen to these so called experts who are typically wrong. 

 

I can see Apple getting more and more secret. There was only a couple leaks before WWDC and some where things Apple didn't seem to care about such as the Yosemite banner going up uncovered. How many people knew about Swift? I don't recall anyone...anyone at all talking about this and this was a project 2yrs in the making before it was released at WWDC (from what I read). If they could do this with almost everything they develop and produce, the better for Apple in more than one way. Its going to be hard, especially when things are made in China.

 

If Apple can truly double-down on secrecy like Tim said, its going to be harder and harder for these experts to predict anything other than false assumptions. I expect to see more and more of this BS reporting down the road. 

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post #26 of 42
Quote:
Originally Posted by Lawrance View Post

Fewer people are wearing watches due to using their phones for the time. Watches are barely more than a fashion statement at this point. I don't know why anyone would buy a "smart" watch that has to be charged every day or two and is very limited in what it can do. It can't compete with a phone. After all the geeks buy one (The same people who used to sport calculator watches) and then athletes, who's left? I just don't see the average Joe buying one of these. And don't trust Samsung's 800,000 sales number... They lie, cheat and steal whenever they can. I see the whole smart-watch market as a black hole that will never make enough to cover the R&D plus marketing to even get to the break even point!

You're thinking about it all wrong, misled by the term 'watch'. Apple have no interest in a watch that simply tells the time (phones replaced that function already, even though not as conveniently). It seems the concept will be health related if the rumours are true, packed with sensors. Phones can't emulate that functionality easily, and just like the iPad it may well turn out to be one of those things people thought they didn't need and couldn't see a purpose for until they tried it and realised it's a remarkably useful tool. :-)
post #27 of 42
All this speculation sh$$ is crazy.
post #28 of 42

21M in first year.  $300.   yep you heard it here first.... 6B in revenues in year one.   With Apple's profit margin... that's 2B in net profits.  (30%)

If I were spinning a story, that's probably the net numbers you have to sell (2B in profits... because anything less is just noise against 2015 projected earnings) to make a buzz.

 

Personally, I don't see the $300 given the 'job' a wearable is to do.   $149 to me is about the max I see as pricing point.  So cut profits in half (or more).

 

The 21 million then makes more sense, but I see that as a year 2 run rate, once the 'chasm crossers' prove out the benefits.

 

The goal of a wearable is to (like apple's implementation of iOS/OSX integration) is iP* lock in.   you 'wear' something that talks only to an iOS or OSX system.   It's amazing in what it can do, but it locks you into the product that makes it do 'that thing you need'

 

You have an iPhone... you buy a wearable thing from Apple.  Now the stickiness gets all the tougher.  If Apple retains 80% of iPhone users now... with an iWatch, or iRing, and a couple killer apps....  you get 90% lockin,   at 300 Million iPhones in circulation, that's 15 Million phones a year that you sell that before were lost to 'other options.).

 

I see this as a 'break even business' ala iTMS... driving sales of Apps, and iCloud, and all other things Apple.

 

So, will I Buy or Sell on UBS's analysis.  No.  

post #29 of 42
Quote:
Originally Posted by macxpress View Post

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. 

You can have the 1st two...
post #30 of 42
Quote:
Originally Posted by imagladry View Post

How true. Still Milunovich's numbers are 5 to 10 times larger than the dust bunny collectors.

Let's not forget that the Samsung watch is a crap product that only exists so that they can claim Apple copied them when/if they release the iWatch.

I highly doubt Apple would bother with it if they didn't think they could blow Samsung out of the water.
post #31 of 42
The Moto 360 looks like the best attempt so far at a watch. Joshua Topolsky was wearing one recently:

http://techgeek.com.au/2014/06/07/nda-verges-joshua-topolsky-wears-moto-360-tonight-show/

The good thing about it is it looks just like a classy wristwatch and not some squared off geekwatch. This should have a $249 price point. I could see that selling better than Samsung's junk watch but it depends on how well it functions and what the market size is at that price point.
post #32 of 42

Steven Milunovich certainly has an active imagination.

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GOA

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Proud AAPL stock owner.

 

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post #33 of 42

Even though I am a fan of most Apple products, I will never own one of these pieces of crap. 

post #34 of 42

I'm not getting why anyone thinks this gadget will be successful. $300 for something that is gone in 60 seconds when a car door slams into your wrist? Or you lose your balance and...down...went...Frasier? An iPad, sure. People take care of those things...iPhone, too. But the 'risk of breakage' with an iWatch trumps anything else Apple sells. And that risk is all yours...try going to the Genius Bar with any even remotely plausible story and see what happens.

 

$300 might seem like a modest amount for some people, but that $300 is most often going to the health care that someone said was going to be 'more affordable'...but isn't. And what kinds of content could POSSIBLY look good on a surface that necessarily will be tiny?

post #35 of 42
Quote:
Originally Posted by ChrisNH View Post

I'm not getting why anyone thinks this gadget will be successful. $300 for something that is gone in 60 seconds when a car door slams into your wrist? Or you lose your balance and...down...went...Frasier? An iPad, sure. People take care of those things...iPhone, too. But the 'risk of breakage' with an iWatch trumps anything else Apple sells. And that risk is all yours...try going to the Genius Bar with any even remotely plausible story and see what happens.

$300 might seem like a modest amount for some people, but that $300 is most often going to the health care that someone said was going to be 'more affordable'...but isn't. And what kinds of content could POSSIBLY look good on a surface that necessarily will be tiny?

1) Have you destroyed a lot of watches on car doors? I can't say I've ever damaged a watch like that and would think that because of the size and being attached to the wrist (i.e.: no easily droppable) that it's inherently less likely to be damaged. Watches are a multi-billion dollar business.

2) I'm not sure I quite get your health related comments. $300 for a multi-function health monitoring device is cheap in the medical world. We've seen lots of things in the health field become cheaper because of common technology.

3) What kind of content are you expecting? I'm expecting nothing but basic things not much more complex than what fits on a typical watch face. The power of the health monitoring will come from interacting with the iPhone, not from a misconception it can be used to play Angry Birds. I wouldn't even consider this a "smartwatch" but rather an accessory device to an iPhone.

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post #36 of 42
Quote:
Originally Posted by iaeen View Post

Let's not forget that the Samsung watch is a crap product that only exists so that they can claim Apple copied them when/if they release the iWatch.

I highly doubt Apple would bother with it if they didn't think they could blow Samsung out of the water.

Whether they think that or not, I don't think it's their motivation. I believe making a dent in the universe is more of a reason.

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post #37 of 42
I guarantee the "iwatch" IF it ever happens will be about as successful as the 3D televisions everyone was supposed to buy a couple of years ago. Apple will sell some, but it won't be a huge success and will be labeled a failure. Just wait and see. Just about everyone I know who has an iphone will not buy a iwatch.
post #38 of 42
i think his assumptions are off...try half as much and twice as expensive for starters
post #39 of 42
Quote:
Originally Posted by Lawrance View Post

Fewer people are wearing watches due to using their phones for the time.

 

On multiple occasions I have had people that own smart phones see the watch on my wrist and ask me the time instead of going through the trouble of dragging their phone out of their pocket or purse to check the time.

post #40 of 42
Quote:
Originally Posted by Adrayven View Post

And yet.. no leaked hardware to even hint at what it would look like.. 

 

Good point. However, if this thing actually does exist, it is possible that it could be made in the US, in which case the hardware is as secretive as the new Mac Pro. At the very least only the components that could possibly identify it even remotely as a wearable device could be made in the US and assembled as well, along with some other non-descript Asian components that would not attract much attention.

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