Apple might be hard at work to launch a television to drive their stalling growth, but according to sources, a wristwatch-style device, which is still in development, may prove far more profitable than TVs.
Industry sources say that the global watch industry will generate more than $60 billion in sales in 2013. With gross margins on watches at 60%, which is four times bigger than for televisions, Apple can achieve more with the wrist than with the couch.
“This can be a $6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod — something consumers didn’t even know they needed,” said Chen, who covers luxury- goods retailers.
Even with capturing just 10% of the market, Apple can hope to accumulate a gross profit of $3.6 billion for watches.
Apple is rumoured to have a team of about 100 product designers working on a wristwatch-like device that may perform some of the tasks now handled by the iPhone and iPad. The device would probably let users make calls, view the incoming caller, check map coordinates, and more. A pedometer might also be included for counting steps and sensors for monitoring health-related data, such as heart rates.
Apple has filed at least 79 patent applications that include the word “wrist,” including one for a device with a flexible screen, powered by kinetic energy.
What’s interesting is the fact that Apple might adopt the iOS mobile platform to the wrist device, instead of a stripped down version.
“There’s no doubt the wrist is a valuable piece of convenient, glanceable real estate for viewing essential information,” said Wilson, a watch designer who developed a line of watchbands for people who wanted to use an iPod nano as a watch. said. “It’d be great to see information like, ‘Where are we meeting for lunch?’”
The Kickstarter funded Pebble smartwatch plans to sell watches that work with Apple and Google software after raising more than $10 million on the crowd-sourcing site.
The wearable electronics battle is heating up now, and with Apple’s watch foray into it, it is bound to get much interesting. Google has already demoed its Google Glass to a select few. The Glass is a computing device that resembles spectacles and is worn on the face. Users of the glasses will be able to speak commands to snap photos, record videos or ask for directions, among other tasks, just like they do with Google Now on their Android powered smartphones.
Apple’s chief-in-design Jony Ive is reported to have an interest in watches from a long time. It is a challenge to come up with a watch to appeal to millions of consumers. Watches are seen as a fashion statement as of now, perhaps Apple can change that perception as they did with their smartphones and tablets.
“Apple can merge fashion with function,” said Marshal Cohen, an analyst at NPD Group. “An Apple watch could triple the size of the watch business in a year or two. They have the opportunity to get everyone that owns a cell phone to go out and buy another watch.”
Source: Bloomberg
