5. Apple TV and the iWatch may not be runaway hits.
SICA Wealth Management Founder and CIO Jeffrey Sica doesn't see much corporate enthusiasm for the Apple TV and the upcoming iWatch. That signals to him that the company might not see the products as having the growth potential many would expect. The products are still developed and supported by Apple only because the consumer tech giant wants to keep an arsenal of products available to its core consumer base.
"Apple is not showing any building excitement for the Apple TV and an Apple iWatch, which makes me believe that these products don't have the potential people expect," Sica said.
Apple TV generated more than $1 billion in revenue for Apple in 2013, but that pales in comparison to what the other iDevices are doing, so it's fair to say that the future of the product may not be a runaway hit. However, Cook has been adamant that Apple is interested in doing more with television, though those plans aren't exactly clear.Morgan Stanley analyst Katy Huberty has put some public projections on what the iWatch could do for Apple in terms of revenue, and while it's likely to be bigger than the iPhone or the iPad in its first year, that's coming off a much, much larger fan base. "Our working assumption is that iWatch will largely 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," Huberty wrote in a Feb. research note about Apple. "Assuming an ASP of $299 and Apple customer base penetration rate similar to the iPad, we see up to $17.5B of revenue in the first 12 months compared to $12B for the iPad and $2.5B for the iPhone." See Also: Tim Cook: TV Is 'an Area of Intense Interest'
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV