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Summary:

Morgan Stanley analysts estimate the iWatch could generate up to $17.5 billion in first-year sales, outpacing the iPad debut.

Apple could be sitting on a potential goldmine, according to Morgan Stanley analysts. In a research note to investors on Tuesday, the firm noted that the rumored iWatch could generate up to $17.5 billion in first-year sales, outpacing the iPad, which debuted at $12 billion.

That $17.5 billion figure assumes a price tag for the iWatch of $299 and a well-stocked supply chain. If Apple were to face supply chain constraints — as it did with the iPhone 5s – revenue could fall to $10 to $14 billion, which is still pretty impressive.

The reason for such a high estimate is because Morgan Stanley believes the iWatch will function as an accessory to Apple’s other iOS devices. “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,” the research note said. This would create potential customers out of the millions of iOS device owners currently out there — and could drive new customers to buy into the ecosystem.

There’s still no word on when — or if — Apple will release the iWatch. But after its recent record-setting first quarter failed to impress investors, the iWatch could give the company a secret weapon to really shatter analyst expectations.

  1. Davin Peterson Tuesday, February 4, 2014

    Who cares. We don’t need Apple iWatch. There are always Smart watches out by Sony, Pepple and Samsung. Why is everybody so fascinated with Apple? The last thing we need is for Apple to unfairly dominate the smartwatch like do they the smartphone and tablet market

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    1. Unfairly? If a company makes superior products and it sells in a highly open competitive market, how is that unfairly dominating? It is all fair!

      Also Apple created the smartphone market, so you do get first movers advantage anyways.

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  2. rottenbittenfruit Tuesday, February 4, 2014

    Those numbers are pure nonsense. No iWatch is going to generate anywhere’s near that amount of revenue for Apple. There are far too many cheapskates who’ll never pay the price Apple will be asking. The cheapskates will be buying poor-quality Chinese-made Android knockoffs for $100. Although Samsung already has the Galaxy Gear, they’ll blatantly copy Apple’s smart watch just to keep themselves covered on all fronts. At this point, count me out for buying any smart watch unless it offers a cloak of invisibility or can transport me from place to place by the power of mere thought. I have about as much need for a smart watch as I have for a mood ring.

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  3. What if the “rumors” of an iWatch is just Apple foxing to cover for something else?

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  4. I have some more “next big thing” ideas for Apple to add to the iWatch accessory line:

    1. The iCuffLink.

    2. The iSuspenders.

    3. The iWingTipBrogans.

    4. The iFedoraSnapBrimHat.

    5. The iBuggyWhip.

    6. The iRotaryTelephone.

    7. The i33RPMVinylRecord.

    8. The i8TrackTape.

    9. The iTieTack.

    10. The iBlackAndWhiteTV.

    11. The iConsoleRadio.

    12. The iCassetteTape.

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  5. It seems rather odd to make financial forecasts for something that doesn’t even officially exist yet.

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    1. Not odd, if you’re asserting an investment thesis that you’re willing to be responsible for.

      Done all the time. Welcome to investing.

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  6. No doubt Apple will launch a new product. My guess is wearable, with “Glance” as the new UI. The wrist is the beach front property. But let’s stop calling it iWatch.

    It would be great to see it work with Android, just as the iPod worked with Windows.

    Final guess: It will be quite different from Gear – smaller, simpler, less functions but very rugged with excellent battery life, and of course ‘cool’.

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  7. I really did not thing the iWatch had legs for all the years its been speculated about. That was until the fitbit craze. I see these everywhere and if Apple makes something like that and it also has something like a iPod Mini screen and apps, I can see people buying it if its around $150. Heck, I’m no lover of Apple but I might even buy one if its not too expensive.

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  8. Fanboys and geeks will love the idea of wearing another Apple product….but it is amazing that Morgan Stanley analysts has calculated this ridiculous number. Always remember that products are fulfilling a “need” and not a “want”. The wristwatch carrying solution as an extension of a device in your pocket……that would/may require you to take the device out of your pocket is DOA.

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