What I think will be the biggest media talking point after the upcoming Apple Watch event will be the high prices for the stainless steel
and Edition versions, if rumours from some of the more reliable sources are true. Upwards of $10,000 for Edition (not including a possible gold band addition), and closer to $1K for the ?Watch (depending on band). If true, the media and Apple haters will go ballistic! Expect millions of cyber trees to be felled to supply the digital ink proclaiming how badly Apple has screwed up their pricing and that Apple will have to immediately change it or doom their watch.
And Apple will still sell lots, earning the maximum out of the high end of the market. Everyone has their own view - I think Apple will sell many millions (>10M) of the watch in 2015, setting up the platform for long-term success. But I also only expect a small % of the market will buy the Edition watch (1% maybe) at $10K USD. Then maybe 10-20% of the Watch version, with vast majority the Sport version (though with some upgraded bands). Including bands, the ASP of the Apple Watch will be well over $500, with the highest margins of any Apple device. It might not move the needle a lot in 2015, but should be providing strong earnings growth in 2017 and beyond (version 3+).
I always think it funny when people say that $350 is too much and they will never buy one at that price, but might if it as $199. What they are saying is they want the price to be something they can try & throw away if they don't like it, since they just want to try it out. When has Apple ever priced their products that way? (and please don't bring up the iPod Shuffle as an example - something which is still higher priced in its category than competition, and came in the 5th year after iPod introduction). Anyone who thinks Apple should price their products like that does not understand Apple at all.
If the Watch cost $5000 I can't see it being worth less than $5000 in 10 years if its left unopened and will probably worth at least DOUBLE. How many other investments can you say that?
I can say that about all investments. We'll see what you say in 10 years As you wrote previously, you can always sell the gold. However, the gold content probably won't account for more than 10%-20% of the cost of the thing. If you're selling it for the melt value, it probably won't have been a great investment. You're probably better off enjoying it. Of course, some folks are getting damn good money for an unopened original iPhone, so who knows?
I think if it sells for $5000 you could sell it for $15,000 in 20 years if its unopened. At most you would probably need to replace the battery if the collector wants to acutally use it.
Will the battery be available? Are there batteries for a 1st gen iPhone?
... but with stocks you can generally get in the range of 8-10% compounded return.
Given where valuations, inflation expectations, and real interest rates are, I doubt that very much. I think the 8%-10% era is behind us. Perhaps 6%-8% from a diversified portfolio of stocks is more realistic.
I find it amusing that people stopped wearing watches because they had a phone in their pocket and that the company that sold us millions of smart phones is now going to replace that watch that we stopped wearing because of the phone that they sold us. It's shiny, I want it.
To be fair, the watches we were wearing almost all just told us the time. The feature phones that killed the watch could tell time. These watches are capable of monitoring us more than loose phones in our pockets and offer other conveniences such as Apple pay, glancing for rich content, not to mention the time.
Will the battery be available? Are there batteries for a 1st gen iPhone?
Remember how a digital watch is designed and Apple showing us the SIP. It seems to me that since this is stacked design with fairly consistent footprint for the internals that Apple could standardize the battery.
Remember how a digital watch is designed and Apple showing us the SIP. It seems to me that since this is stacked design with fairly consistent footprint for the internals that Apple could standardize the battery.
A similarly designed battery doesn't necessarily mean it'll work for an old device.
A similarly designed battery doesn't necessarily mean it'll work for an old device.
That's true, but it could, and any device from Apple that I think could have a forward-thinking upgrade system in place would be ?Watch.
I would love to hear Apple introduce an S5 series chip that is the same size as the current chip but with a lot more features and using a lot less power along with a new battery tech so that the same size battery can last a couple times longer. Along with that upgrade you get a new ceramic base which is also standardized, because you need the additional sensors now available for the S5. And sense the ceramic base is how you access the internals it's easy to have this done by an Apple Watch Authorize Jeweler in 10 minutes because Apple planned so well. And you get to do all this while keeping the ?Watch styling that you either feel is the most attractive, defines your style best, or because the watch itself was a gift you cherish and want to wear for years.
That's what I hope to see, but the complexity of that much future-forward planning has, up to date, not been something Apple has proven themselves to be capable of completing. Then again, Jony Ive said this was the most difficult project he's worked on. I guess he could be lying or perhaps there is some other aspect of a smart watch that is complex.
exactly. They will be marketing the GoldWatch as a generational item. Pretty sure they will have batteries avaliable for a long time.
You don't know it. We both would like that to be the case. I certainly think a trade-in program so they can melt down the gold is not the most sophisticated way to go, but we simply have no idea if what I propose above is feasible. I believe people at Apple would have had the same desire I would and have tried to see if it was feasible to accomplish but we simply don't know at this point.
for the next 5-10 years I think 3%-4% would be lucky.
I'm serious. We have been on a massive bull run the last 6 years and are due for a correction within the next 5 years
That's perhaps a tad pessimistic, although at a forward PE ratio of 17.5x now, the US market is looking VERY fully valued.
I do also worry a great deal about a bunch of silly 'tech' companies hyped by VC types and the likes of Bloomberg West, such as FB, GOOG, NFLIX, LNKD, TSLA, TWTR, BABA, AMZN, etc. whose collective valuations are stratospheric, and ripe for a major correction: the worry is that such a correction will spill over into the larger market (as people have to sell the good stuff to pay for the margin calls on the bad). If/when that happens, it will end up impacting stocks like those of Apple, at least in the short run.
No one would buy a $10k watch that would be useless in 5 years.
1) Again, you don't know that. You don't even know that ?Watch Edition will start at $10,000, but you decided it would make you happy if it did so you determined that was the absolute truth despite any evidence to support your position.
2) You're claims account for only a best and a worst scenario, not the more common scenario where you could sell your ?Watch Edition back to Apple for a fair trade to get the latest model. Neither of us want to see that "mid-range" scenario play out, but that doesn't mean it doesn't exist.
It looks gorgeous, but how many people under 40 still wear watches these days? While the Apple Watch is much more than a timekeeper, the question of whether or not it will become a mainstream item remains to be seen.
A 3-4% annualized return is very realistic for the next 10 years. Especially since the S&P500 is up 115% in the last 5 years.
First, you're wrong with the data you cite. Compared to its level On Jan 1, 2000, the S&P500 was up 40% through end-2014. Second, you cherry-picked a base year that was a bubble. The PE ratios in 2000 (I think ~45x?) were much higher than they are now (~17.5x). Third, the Index currently gives a dividend yield of ~2%. So, you're saying that the capital gains looking ahead are going to be in the range of ~1% - ~2% per year. Really?
I think if it sells for $5000 you could sell it for $15,000 in 20 years if its unopened. At most you would probably need to replace the battery if the collector wants to acutally use it.
Speaking as a long-time collector of things various and sundry (and who's done very well with enough of my many thousands of comics to be smiling), I doubt the A-watch is going to be a prime collectible.
Things that are pre-touted and sought as such (as the ?Watch is being to an extent) seldom are - even when there are millions (or in the case of something the price of the "Edition edition" hundreds of thousands). E.g., among Macs, only the very first has shown a lot of appreciation.
Comics of the 90s were released into a speculative froth in the millions and the vast majority are lucky to be worth cover price 20-25 years later. And don't get too excited if you have a Commodore 64 or Texas Instruments 99 4/A (model # right?) in the garage or basement.
The original Apple, OTOH was only made in very small quantities and not much collected, and the Cube was a failure, limiting its distribution. And, while paring down my hoard, I was recently surprised to find that '70s copies of Oui, Viva and Gallery are worth more than Playboys and Penthouses of the same vintage. Basically IMHO because they weren't much collected.
My Apple Lisa catalog, price $0.00, though is worth about $50-75, and first Ed. of MacWorld is fetching somewhere around $50 on eBay in mint condition.
However, even things that are rare - and there are gajillions - don't necessarily have resale value just because of that fact as I've learned over and over....
So you'd be better advised to listen to the comments below....
Jus' sayin'....
Quote:
Originally Posted by GregInPrague
You should be able to earn a better rate of return than that just by putting your money in a mutual fund for 20 years. If you bought actual decent stocks (like AAPL) you could expect far more.
Quote:
Originally Posted by williamh
Just a thought, but perhaps you would be better off with $5,000 of AAPL or some other stock. In 20 years you ought to be able to make a better return on investment some other way. Perhaps just by buying gold.
I think the jury is still out on it's real world usability.
It hasn't launched yet. Naysayers said the same about the Mac with it's weird mouse, the iPhone with it's weird virtual keyboard, and the iPad which was just a larger iPod Touch, too.
I'm sure Apple has had field tests, but it does seem to require fine motor skills to navigate given the small display.
]Not so much an issue if you're sitting having a coffee, but less so when you're walking to a meeting and have to dive into a specific app.
:???: I don't see how that is a valid argument against ?Watch.
I meant Jan2014 not Dec 2014. I did not cherry pick.
I could have used 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 as the end date and it would be worse since it would be negative return.
My calculation was without dividends. I'm not saying it will happen but there is good chance. I'd say the chance of 3-4% annualized returns the next 10 years is better than 8-10% returns.
That makes no sense to me. Why not Dec 2014? Or better yet, Feb 2015? (Btw, even if you use Jan 1, 2014, you're wrong again since the gain was 25% relative to Jan 1 2000; that does not even include the dividend yield).
More importantly, of course you're cherry-picking your beginning date. You have not made the case for, or answered my question to you about why a start date with an overvalued market -- with a PE ratio in the 40s -- is similar to the market that we have today (with a PE ratio in the upper teens). You cannot make an assessment about expected returns in the future without making a case for where the valuation is, currently.
Also, you cannot talk of 'returns' without including dividend yields (and share repurchases, but at least dividend yields).
Also, I did not say '8-10%' returns, someone else did. Please be careful when you cite people.
It hasn't launched yet. Naysayers said the same about the Mac with it's weird mouse, the iPhone with it's weird virtual keyboard, and the iPad which was just a larger iPod Touch, too.
I don't see how that is a valid argument against ?Watch.
Hence why I said the jury is still out.
I don't understand your
You can't deny the Apple Watch has a small screen. Certainly not as easy to select icons as on an iPhone.
And I think this speaks more to the Apple Watch more than say an Android watch, which is more simple.
Look, once we get this in our hands, we can truly judge. Just an observation.
Comments
What I think will be the biggest media talking point after the upcoming Apple Watch event will be the high prices for the stainless steel
and Edition versions, if rumours from some of the more reliable sources are true. Upwards of $10,000 for Edition (not including a possible gold band addition), and closer to $1K for the ?Watch (depending on band). If true, the media and Apple haters will go ballistic! Expect millions of cyber trees to be felled to supply the digital ink proclaiming how badly Apple has screwed up their pricing and that Apple will have to immediately change it or doom their watch.
And Apple will still sell lots, earning the maximum out of the high end of the market. Everyone has their own view - I think Apple will sell many millions (>10M) of the watch in 2015, setting up the platform for long-term success. But I also only expect a small % of the market will buy the Edition watch (1% maybe) at $10K USD. Then maybe 10-20% of the Watch version, with vast majority the Sport version (though with some upgraded bands). Including bands, the ASP of the Apple Watch will be well over $500, with the highest margins of any Apple device. It might not move the needle a lot in 2015, but should be providing strong earnings growth in 2017 and beyond (version 3+).
I always think it funny when people say that $350 is too much and they will never buy one at that price, but might if it as $199. What they are saying is they want the price to be something they can try & throw away if they don't like it, since they just want to try it out. When has Apple ever priced their products that way? (and please don't bring up the iPod Shuffle as an example - something which is still higher priced in its category than competition, and came in the 5th year after iPod introduction). Anyone who thinks Apple should price their products like that does not understand Apple at all.
I already hold AAPL stock and index funds.
If the Watch cost $5000 I can't see it being worth less than $5000 in 10 years if its left unopened and will probably worth at least DOUBLE. How many other investments can you say that?
I can say that about all investments. We'll see what you say in 10 years
As you wrote previously, you can always sell the gold. However, the gold content probably won't account for more than 10%-20% of the cost of the thing. If you're selling it for the melt value, it probably won't have been a great investment. You're probably better off enjoying it. Of course, some folks are getting damn good money for an unopened original iPhone, so who knows?
Will the battery be available? Are there batteries for a 1st gen iPhone?
... but with stocks you can generally get in the range of 8-10% compounded return.
Given where valuations, inflation expectations, and real interest rates are, I doubt that very much. I think the 8%-10% era is behind us. Perhaps 6%-8% from a diversified portfolio of stocks is more realistic.
I find it amusing that people stopped wearing watches because they had a phone in their pocket and that the company that sold us millions of smart phones is now going to replace that watch that we stopped wearing because of the phone that they sold us. It's shiny, I want it.
To be fair, the watches we were wearing almost all just told us the time. The feature phones that killed the watch could tell time. These watches are capable of monitoring us more than loose phones in our pockets and offer other conveniences such as Apple pay, glancing for rich content, not to mention the time.
GORGEOUS.
those who say the Watch is ugly have no taste
It's gorgeous because it's on a hot supermodel photographed with proper lighting.
Can't wait to see the real thing and see how it looks on my wrist.
My guess is, it'll look uglier on you.
Remember how a digital watch is designed and Apple showing us the SIP. It seems to me that since this is stacked design with fairly consistent footprint for the internals that Apple could standardize the battery.
A similarly designed battery doesn't necessarily mean it'll work for an old device.
That's true, but it could, and any device from Apple that I think could have a forward-thinking upgrade system in place would be ?Watch.
I would love to hear Apple introduce an S5 series chip that is the same size as the current chip but with a lot more features and using a lot less power along with a new battery tech so that the same size battery can last a couple times longer. Along with that upgrade you get a new ceramic base which is also standardized, because you need the additional sensors now available for the S5. And sense the ceramic base is how you access the internals it's easy to have this done by an Apple Watch Authorize Jeweler in 10 minutes because Apple planned so well. And you get to do all this while keeping the ?Watch styling that you either feel is the most attractive, defines your style best, or because the watch itself was a gift you cherish and want to wear for years.
That's what I hope to see, but the complexity of that much future-forward planning has, up to date, not been something Apple has proven themselves to be capable of completing. Then again, Jony Ive said this was the most difficult project he's worked on. I guess he could be lying or perhaps there is some other aspect of a smart watch that is complex.
You don't know it. We both would like that to be the case. I certainly think a trade-in program so they can melt down the gold is not the most sophisticated way to go, but we simply have no idea if what I propose above is feasible. I believe people at Apple would have had the same desire I would and have tried to see if it was feasible to accomplish but we simply don't know at this point.
for the next 5-10 years I think 3%-4% would be lucky.
I'm serious. We have been on a massive bull run the last 6 years and are due for a correction within the next 5 years
That's perhaps a tad pessimistic, although at a forward PE ratio of 17.5x now, the US market is looking VERY fully valued.
I do also worry a great deal about a bunch of silly 'tech' companies hyped by VC types and the likes of Bloomberg West, such as FB, GOOG, NFLIX, LNKD, TSLA, TWTR, BABA, AMZN, etc. whose collective valuations are stratospheric, and ripe for a major correction: the worry is that such a correction will spill over into the larger market (as people have to sell the good stuff to pay for the margin calls on the bad). If/when that happens, it will end up impacting stocks like those of Apple, at least in the short run.
1) Again, you don't know that. You don't even know that ?Watch Edition will start at $10,000, but you decided it would make you happy if it did so you determined that was the absolute truth despite any evidence to support your position.
2) You're claims account for only a best and a worst scenario, not the more common scenario where you could sell your ?Watch Edition back to Apple for a fair trade to get the latest model. Neither of us want to see that "mid-range" scenario play out, but that doesn't mean it doesn't exist.
The S&P500 returned 0% in 14 years from 2000-2014
A 3-4% annualized return is very realistic for the next 10 years. Especially since the S&P500 is up 115% in the last 5 years.
First, you're wrong with the data you cite. Compared to its level On Jan 1, 2000, the S&P500 was up 40% through end-2014. Second, you cherry-picked a base year that was a bubble. The PE ratios in 2000 (I think ~45x?) were much higher than they are now (~17.5x). Third, the Index currently gives a dividend yield of ~2%. So, you're saying that the capital gains looking ahead are going to be in the range of ~1% - ~2% per year. Really?
I told you so. The Home Screen design is pure genius.
I disagree.
It’s awful. Tiny icons make it more like Android than iOS. And they look like a load of pus globules on someone's wrist.
Originally Posted by sog35
it will be a collectors item.
A collector will not use the watch.
I think if it sells for $5000 you could sell it for $15,000 in 20 years if its unopened. At most you would probably need to replace the battery if the collector wants to acutally use it.
Speaking as a long-time collector of things various and sundry (and who's done very well with enough of my many thousands of comics to be smiling), I doubt the A-watch is going to be a prime collectible.
Things that are pre-touted and sought as such (as the ?Watch is being to an extent) seldom are - even when there are millions (or in the case of something the price of the "Edition edition" hundreds of thousands). E.g., among Macs, only the very first has shown a lot of appreciation.
Comics of the 90s were released into a speculative froth in the millions and the vast majority are lucky to be worth cover price 20-25 years later. And don't get too excited if you have a Commodore 64 or Texas Instruments 99 4/A (model # right?) in the garage or basement.
The original Apple, OTOH was only made in very small quantities and not much collected, and the Cube was a failure, limiting its distribution. And, while paring down my hoard, I was recently surprised to find that '70s copies of Oui, Viva and Gallery are worth more than Playboys and Penthouses of the same vintage. Basically IMHO because they weren't much collected.
My Apple Lisa catalog, price $0.00, though is worth about $50-75, and first Ed. of MacWorld is fetching somewhere around $50 on eBay in mint condition.
However, even things that are rare - and there are gajillions - don't necessarily have resale value just because of that fact as I've learned over and over....
So you'd be better advised to listen to the comments below....
Jus' sayin'....
You should be able to earn a better rate of return than that just by putting your money in a mutual fund for 20 years. If you bought actual decent stocks (like AAPL) you could expect far more.
Just a thought, but perhaps you would be better off with $5,000 of AAPL or some other stock. In 20 years you ought to be able to make a better return on investment some other way. Perhaps just by buying gold.
I disagree.
It’s awful. Tiny icons make it more like Android than iOS. And they look like a load of pus globules on someone's wrist.
I think the jury is still out on it's real world usability.
I'm sure Apple has had field tests, but it does seem to require fine motor skills to navigate given the small display.
Not so much an issue if you're sitting having a coffee, but less so when you're walking to a meeting and have to dive into a specific app.
It hasn't launched yet. Naysayers said the same about the Mac with it's weird mouse, the iPhone with it's weird virtual keyboard, and the iPad which was just a larger iPod Touch, too.
:???: I don't see how that is a valid argument against ?Watch.
I meant Jan2014 not Dec 2014. I did not cherry pick.
I could have used 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013 as the end date and it would be worse since it would be negative return.
My calculation was without dividends. I'm not saying it will happen but there is good chance. I'd say the chance of 3-4% annualized returns the next 10 years is better than 8-10% returns.
That makes no sense to me. Why not Dec 2014? Or better yet, Feb 2015? (Btw, even if you use Jan 1, 2014, you're wrong again since the gain was 25% relative to Jan 1 2000; that does not even include the dividend yield).
More importantly, of course you're cherry-picking your beginning date. You have not made the case for, or answered my question to you about why a start date with an overvalued market -- with a PE ratio in the 40s -- is similar to the market that we have today (with a PE ratio in the upper teens). You cannot make an assessment about expected returns in the future without making a case for where the valuation is, currently.
Also, you cannot talk of 'returns' without including dividend yields (and share repurchases, but at least dividend yields).
Also, I did not say '8-10%' returns, someone else did. Please be careful when you cite people.
It hasn't launched yet. Naysayers said the same about the Mac with it's weird mouse, the iPhone with it's weird virtual keyboard, and the iPad which was just a larger iPod Touch, too.
Hence why I said the jury is still out.
I don't understand your
You can't deny the Apple Watch has a small screen. Certainly not as easy to select icons as on an iPhone.
And I think this speaks more to the Apple Watch more than say an Android watch, which is more simple.
Look, once we get this in our hands, we can truly judge. Just an observation.