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One analyst believes the Apple Watch will be the company's most profitable item ever

Written by Andre Yoskowitz (Google+) @ 20 Apr 2015 19:21 User comments (14)

One analyst believes the Apple Watch will be the company's most profitable item ever Last week, Apple began pre-orders on the Apple Watch and its hundreds of varieties before the smartwatch goes on sale officially this Friday.
Carl Howe of Think Big Analytics has been one of the biggest bulls on the launch of the device, suggesting that Apple has already sold over 3 million units at an average price of over $500, selling 1.8 million Sports (starting at $349), 1.3 million Watches (starting at $549) and 40,000 Edition (priced at $10,000 or higher).

"I've built a simple model that predicts that the initial run of watches was more than 3 million units and will yield Apple Watch revenues of over $2 billion for the first two weeks of sales," said Howe. "The model suggests that while Sport Watch will lead sales in volume, selling 1.8 million units through May 8, Apple Watch will actually lead in revenue during that period, garnering about $900 million versus Sport's $675 million. I also believe that Apple's decision to introduce the Edition will be validated by $500 million in sales on only 40,000 units." If accurate, the figure crushes all other smartwatches to date, including the popular Moto 360, and that's only with pre-order sales.

In addition, Howe believes the device will be Apple's most profitable, with gross margins over 60 percent compared to the already large 35-40 percent it sees for its iPhone line. "Why? Because the core electronics modules in the expensive models are the same ones used in the Sport models, and they just don't cost that much," noted Howe.

Source:
BI

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14 user comments

121.4.2015 1:22

I sure have trouble seeing how the watch will be profitable. Seems every phone, laptop, or mp3 player out there has a clock already. And the phones out there have most apps then what the watch will limit you to. Oh i get it what a novel idea to watch a feature length movie on such a huge watch screen :) Or possibly in 5 years watches will be pushing 7" as well. Didn't some predict google glass would be a huge hit too?

This message has been edited since its posting. Latest edit was made on 21 Apr 2015 @ 1:39

221.4.2015 11:55

£350.00 for a watch with a no replacement battery. Don't think so! The idiots will do it but I don't think the masses will fall for this one.

321.4.2015 11:55

£350.00 for a watch with a no replacement battery. Don't think so! The idiots will do it but I don't think the masses will fall for this one.

421.4.2015 14:33

Originally posted by SomeBozo:
I sure have trouble seeing how the watch will be profitable. Seems every phone, laptop, or mp3 player out there has a clock already. And the phones out there have most apps then what the watch will limit you to. Oh i get it what a novel idea to watch a feature length movie on such a huge watch screen :) Or possibly in 5 years watches will be pushing 7" as well. Didn't some predict google glass would be a huge hit too?
Do not underestimate the i-Sheep. They are legion.

521.4.2015 22:53

I think it will because I envision many people breaking these devices so them coming in with cracked screens and other issues will cause them to have to pay to exchange it and I am sure Apple will make tons selling their over-priced "Apple Care" on these things too. People already abuse the crap out of and lose their smartphones left and right. Imagine what will be done on something worn outside the body and I am not gonna even count people getting robbed when one of these things are noticed on their wrist by a thief.


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621.4.2015 23:17

Originally posted by DarthMopar:
Originally posted by SomeBozo:
I sure have trouble seeing how the watch will be profitable. Seems every phone, laptop, or mp3 player out there has a clock already. And the phones out there have most apps then what the watch will limit you to. Oh i get it what a novel idea to watch a feature length movie on such a huge watch screen :) Or possibly in 5 years watches will be pushing 7" as well. Didn't some predict google glass would be a huge hit too?
Do not underestimate the i-Sheep. They are legion.
True, you have a great point, just like my favorite philosopher Forest Gump, "Stupid is as stupid does...." hard for me to think stupid :)


722.4.2015 18:39

The article's title should be, "Analyst predicts lots of stupid iFans will pay way too much money for a smartwatch because it is made by Apple."

I have no way of knowing how many stupid people are out there, so I have no way of debating the analyst's predictions.

I can say, however, that Apple once made gobs of money by giving people something very useful and desirable. I'm not an Apple fan, but the iPod met a real and important need -- people like listening to their music, not just what's on the radio, and they don't like carrying around 100 CDs. Same with the iPhone -- it's great to have a phone that can provide you with limited but meaningful computing and connectivity. And even the iPad -- it's nice to have a handheld device with a screen big enough to watch movies and read articles.

But smartwatches don't give me any function I don't already have in a form factor I'm already comfortable with. I do own a fitness tracker, and I get the need for that. But for people that aren't looking for fitness trackers, I simply don't see a glaring need that the marketplace needs to satisfy with a smartwatch. What I do see is a post-Jobs Apple that is desperate to come up with the next great market innovation and couldn't think of anything other than a watch, and a bunch of iFans that are so eager to embrace anything new from Apple that they convince themselves of a need that does not exist.

In the short term, this may sell some Apple Watches and make some profit. But the fad will end soon. And people will start wondering whether Apple has any magic bullets left in the chamber. (Some of us have been wondering that for years.)

This is the beginning of the end for Apple.

823.4.2015 2:32

I was once a huge fan of apple products, and then I saw the light and realised how superior android is.
I agree with many people's view that Apple is overpriced for what u get and the isheep just want all to see the logo while they walk around with the device stuck to there face.
Even funnier when u see the ipads come out to take photos, who carries an ipad round for a camera, the answer is the isheep who want a bigger apple logo to show off, lol


"Trying is the first step towards Failure" Homer.J.Simpson

923.4.2015 5:14

I am completely against owning an Apple product. I agree with the other comments on the isheep crowd and let everyone I know in on my feelings. It does have some results as slowly my colleagues and friends are moving over to Windows Phone, which I really like (I not too keen on Android either).
Now, I was adamant that smart watches would not take off and as someone above states, we have enough devices that do all of the things a watch could do and anyway I like my smart Deep Sea wrist watch.
But... I got an offer from MS to get a Band at a reduced price and have worn it ever since. In fact I haven't worn my expensive automatic watch since! I am not using it for what looks like the excellent workout routines and fitness functions (although the GPS biking function may come in useful), what I really like is that it tells me who's calling and what texts/facebook messages etc. are coming in to my phone without me having to find my phone or get it out of wherever when driving. Great on a bike too. News headlines flash up and it has the weather and of course how many calories and steps I do which is going some way to me losing a few pounds.
Yes, it's a pain having to charge it up every two days but I do this on my desk when working and only takes an hour.
Now if the Apple watch does this then I am sure all the iPhone followers will get one. The thing is though, the Apple version is at a much higher price.

1023.4.2015 5:19

I should say that I have owned Apple products and do buy them in for customers who express a desire to have one.. so do have experience.

1123.4.2015 10:19

Originally posted by SomeBozo:
I sure have trouble seeing how the watch will be profitable. Seems every phone, laptop, or mp3 player out there has a clock already. And the phones out there have most apps then what the watch will limit you to. Oh i get it what a novel idea to watch a feature length movie on such a huge watch screen :) Or possibly in 5 years watches will be pushing 7" as well. Didn't some predict google glass would be a huge hit too?


Did you even read the article… He spells it out for you. How do you have a hard time believing,


Music is Life!

1223.4.2015 10:33

Originally posted by SoTired:
The article's title should be, "Analyst predicts lots of stupid iFans will pay way too much money for a smartwatch because it is made by Apple."

I have no way of knowing how many stupid people are out there, so I have no way of debating the analyst's predictions.

I can say, however, that Apple once made gobs of money by giving people something very useful and desirable. I'm not an Apple fan, but the iPod met a real and important need -- people like listening to their music, not just what's on the radio, and they don't like carrying around 100 CDs. Same with the iPhone -- it's great to have a phone that can provide you with limited but meaningful computing and connectivity. And even the iPad -- it's nice to have a handheld device with a screen big enough to watch movies and read articles.

But smartwatches don't give me any function I don't already have in a form factor I'm already comfortable with. I do own a fitness tracker, and I get the need for that. But for people that aren't looking for fitness trackers, I simply don't see a glaring need that the marketplace needs to satisfy with a smartwatch. What I do see is a post-Jobs Apple that is desperate to come up with the next great market innovation and couldn't think of anything other than a watch, and a bunch of iFans that are so eager to embrace anything new from Apple that they convince themselves of a need that does not exist.

In the short term, this may sell some Apple Watches and make some profit. But the fad will end soon. And people will start wondering whether Apple has any magic bullets left in the chamber. (Some of us have been wondering that for years.)

This is the beginning of the end for Apple.
There are a lot of stupid Apple fans and there are a lot of stupid things that smart phones can do! And yet we are all so excited to get the newest and latest and greatest updated phone . I don't know where all of you haters come from, especially since theoretically Apple is late to the game with a smart watch. But like always and with everything else they have done in the past they do it right because they take their time and perfect it, there are actually people out there that like to wear watches still. I myself own several watches that cost more than an Apple Watch, and it actually only tells time!! most people wear them (watches) as an accessory or jewelry! I happen to believe the Apple Watch is a beautifully crafted device. Usually when I wear a watch I find myself still looking at my phone for the time. Like the rest of us I'm sure you own an expensive pair of sneakers or shoes that don't give you any more benefit sitting around the computer playing video games than a pair of $10 Payless shoes! Just because you can't afford it or you don't like Apple products doesn't mean you have to be so negative and hateful to Apple fans....! Apple owns the market share with their products and their smart phone, so what makes you think that the millions of people that own an iPhone, even if only a fraction of them buy an Apple Watch, the sales will still be incredible! Years ago a watch used to be a status symbol and an accessory or piece of jewelry… It still is !

Music is Life!

1323.4.2015 11:12

I agree with your last line. It's a good one but my Rolex is a lovely piece to own and yes it cost many times the price of one of these Apple watches BUT.. it will hold a good price for many years to come and may even go up in value. Apple Watch v1 will drop massively when v2 comes out and probably be worthless by v3. - 50 years into the future and if very few survive then they may be worth a small fortune on the then equivalent of eBay!

1423.4.2015 16:52

Originally posted by magictown:
I agree with your last line. It's a good one but my Rolex is a lovely piece to own and yes it cost many times the price of one of these Apple watches BUT.. it will hold a good price for many years to come and may even go up in value. Apple Watch v1 will drop massively when v2 comes out and probably be worthless by v3. - 50 years into the future and if very few survive then they may be worth a small fortune on the then equivalent of eBay!
I agree completely, point well made

"Trying is the first step towards Failure" Homer.J.Simpson

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