This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Apple Definitely Cares Less About an iWatch

NEW YORK (TheStreet) -- My Dec. 12 article, I Still Don't Understand the Smartwatch, was steered largely toward Samsung's Galaxy Gear -- which I find completely unattractive in many facets. 

Today's focus, however, is not on Samsung's potential flop of a smartwatch, but rather, Apple's (AAPL) possible duplicate of such a product as I'm not buying into the concept that investors and analysts need to see an iWatch from Apple just to prove it can innovate.

We already know Apple can innovate. Though Apple didn't invent Smartphones, tablets and mp3 players, it was the first company to get them right and really make them into desirable products. Apple not only nailed the products, but it also nailed consumers' perception of them -- maybe I'm the only one feeling this way?

Apple shouldn't rush something to the market that's largely irrelevant. While compiling estimates on a product that has yet to exist seems rather meaningless and slightly idiotic, that hasn't stopped analysts from doing so. 

Piper Jaffray's Gene Munster suggested that if 2-to-4% of current iPhone users buy an iWatch, it will sell between 5 and 10 million units. Taking the best case scenario of 10 million units, that's good for about $3.5 billion in revenues -- based on a $350 price tag for the iWatch. 

If Munster's estimates for this nonexistent product are semi-accurate, the iWatch would hardly constitute as a needle-mover for a company the size of Apple. With fiscal 2013 revenues of $170 billion, the iWatch would have accounted for a minuscule 2%. 

Of course, this isn't accurate either, since it's based off of an estimate of something having a good chance of existing. See my point? We have no clue.

But at that rate, even 25 million units at the hefty cost of $350 would still have only accounted for 5% of revenue at the time. 

In actuality, an investor who is sitting on the sidelines -- ignoring Apple's valuation, current product line up, dividend and share repurchase -- and buys the stock because the company released an iWatch, has invested backwards. 

Apple can innovate, and releasing a product for the sole purpose of releasing a product is stupid. 

The Samsung Gear has reportedly shipped 800,000 units since its release in September. Analysts would be pounding Apple into dust if they saw a figure like that come from the Cupertino juggernaut. 

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,157.17 +25.20 0.15%
S&P 500 2,003.90 +4.92 0.25%
NASDAQ 4,561.7490 +8.99 0.20%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs