Down the coast in Cupertino, Calif., Apple (AAPL) is reported to introduce a smartwatch/wrist device, this fall, which may effortlessly connect to iOS 8 devices and will feature apps and services geared toward health-conscious consumers. The device, rumored to be called the iWatch, may be a huge hit, according to Wall Street.
Evercore Partners Rob Cihra, who rates Apple "overweight" and recently raised his price target to $115 from $100, believes the company could sell as many as 5 million iWatch units in the December quarter, and 18 million units in fiscal 2015, priced at $249.
"We model iWatch/iBand adding 2% to Apple revs but 10% attach rate + $299 price-tag could make it a 5% business," Cihra wrote in a research note earlier this week. "Either way we see it extending a growing Apple theme of "continuity" across platform, a unique point of leverage off a closed-loop ecosystem. This makes iOS devices more valuable to users (e.g., seamless functionality, ease of use) and developers (e.g., iOS per-user monetization/profitability consistently higher than Android's), as well as sets stage for more secure services in e/mCommerce, advertising (leveraging Apple's uniquely high-end demographic) and location (e.g., iBeacon)."
Apple CEO Timothy D. Cook has intimated that Apple may move into wearable technology, noting the wrist is an "interesting" area to explore. "The whole sensor field is going to explode," Cook said during a 2013 conversation with Kara Swisher and Walt Mossberg. "It's a little all over the place right now. With the arc of time, it will become clearer. The wrist is interesting. You still have to convince people it is worth wearing."
Though Microsoft and Apple have garnered much of the attention in recent weeks, they are not the only ones betting on wearable computers.
In June, Google gave an update on devices that will run on its wearable-centric operating system, Android Wear. LG and Samsung were the first to announce their smartwatch designs conforming to the new standards, and Motorola is also working on an Android Wear wrist computer of its own, set to be released in a few weeks.
In addition to working on a Android-based watch, Samsung has its line of second-generation Galaxy Gear watches. All three of the recently released devices run on Samsung's own operating system, codenamed Tizen. The aforementioned Sony has been making Android-based watches for a few years now, and several other companies make watches, from companies such as Garmin (GRMN) to other smaller firms such as Pebble.
There are also a host of fitness-centric wrist bands currently on the market, including the Nike (NKE) FuelBand (Nike will be discontinuing its FuelBand hardware, but will still make software), Jawbone's UP 24 and the Fitbit Flex. There are also a multitude of multi-colored models from SYNC, Rogue, Soleus, Basis (now owned by Intel (INTC),) iFit and Garmin.
Despite the slew of devices already on the market, consumer reaction has been mixed, with adoption less than what some had expected by now. While no one has yet been able to convince mainstream consumers why they need a computer on their wrists, Current Analysis analyst Avi Greengart said via phone Microsoft and Apple are best poised to do so. "Microsoft and Apple would be the ones to explain to the buying public why they need a device like this."
-- Written by Gary Krakow and Chris Ciaccia in New York.
To submit a news tip, send an email to firstname.lastname@example.org.