Apple Reportedly Planning a Smartwatch Device, Seeking to Stay on Par with Samsung

Tim Cook, CEO over at Apple, recently dropped a few hints at a potential new product category that could be coming to the Cupertino tech giant. During last month’s earnings call Cook, according to analyst at Morgan Stanley Katy Huberty, revealed some information that Huberty believes points to a new wearable technology market for Apple.

Smartwatch rumors are nothing new for Apple. Reports that the iCompany is in the process of creating such a device pop up on the regular. Those rumors could gain even more credence with the forthcoming smartwatch device from Samsung that integrates seamlessly with your Galaxy devices.

According to Huberty, should Apple actually release a smartwatch device this year then Apple could make as much as $17.5 billion in revenue over the first 12 months. That number stems from an assumed $299 price tag and a customer base similar in size to that of the iPad.

To compare and contrast, Apple’s iPad saw sales of $12 billion with the iPhone seeing $2.5 billion during their first years on the market. The only difference for an iWatch (which we all know is what they’re going to call it) is that it could suffer from supply constraints, which could limit revenue generated in the device’s first year on the market to between $12 billion and $14 billion. Regardless, that is still a percentage point increase of 6 to 10 in Apple’s projected 2015 revenue.

The other big question with this is who the product would target and who would actually buy it. According to Huberty, “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.”

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Features on the iWatch would be similar to Samsung’s Galaxy Gear smartwatch, naturally. The Galaxy Gear is an attractive, comfortable and easy-to-use device, though it isn’t without it’s faults. The smartwatch lacks support for both email and social media sites, like Facebook and Twitter and isn’t really compatible with a lot of other devices. In addition to that, it also has a clunky external charging case while the voice controls work about as well as they did on the original Kinect.

With that being said, we can assume that Apple’s iWatch will only be compatible with other Apple products, namely the iPhone, iPad and iPod. This means that the device will be excluded from use by a lot of people. Apple may be the biggest mobile technology producer in the world but it still can’t compete with the sheer number of Android devices on the market.

All in all I see the smartwatch falling into a niche market. While I think some of the features are cool and some of the possibilities are pretty impressive, I just don’t see it appealing to large audiences. I mean, I honestly don’t think there are enough Power Ranger enthusiasts out there that want to recreate communicating to Zordon to make the iWatch viable.

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