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Bloomberg said it could be more profitable than the TV

Apple fans rejoice: the next addition to your iCollection -- the so-called "iWatch" -- will reportedly be available later this year.

Apple has been testing designs for a smart watch, which would act like a small-scale iPhone. According to Bloomberg, the wearable device will be available later this year and will run iOS.

Apple is currently tweaking certain features, such as increasing battery life to last four or five days (it currently only lasts a couple of days) and working on the iPhone's iOS so it can support the device. Apple also wants to build the watch's iOS from the ground up instead of starting with the iPod nano's touch operating system (which has a screen about the size of a watch).

The tech giant has been talking
with manufacturer Hon Hai Precision Industry Co. about the new device, and Hon Hai has been working on new technologies for wearable devices (such as more efficient displays and chips at that size).


[Image Source: Lunatic]

Last month, a patent application for a "Bi-stable spring with flexible display" was filed by Apple in 2011. It described a bi-stable spring that would be made out of thin steel and wrapped in fabric covering, then heat-sealed. The display would be located on one side of the bracelet (overlaid with an adhesive) and the logic board and battery would be placed on the other side. It also showed a universal fit, a plethora of onboard sensors, wireless charging, etc.

No matter what the end result is, Bloomberg believes Apple could rake in the cash on this new venture. In fact, the report stated that the iWatch could be more profitable than the TV it's been working on.

According to Bloomberg, the global watch industry will generate over $60 billion in sales in 2013, where gross margins are about 60 percent. The TV industry will generate about $119 billion in sales this year, but with gross margins about four times less than watches. If Apple were to take a 10 percent share in each market, it'd be a gross profit of $3.6 billion for watches and $1.79 billion for TVs.

Sources: The Verge, Bloomberg



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Completely missing the mark
By theapparition on 3/4/2013 2:29:38 PM , Rating: 2
quote:
According to Bloomberg, the global watch industry will generate over $60 billion in sales in 2013, where gross margins are about 60 percent.

The bulk of that gross margin is skewed towards the higher end brands that make only certified Swiss designs. The lower end quartz watch industry makes nowhere near 60% gross margin. Citizen, the largest watch maker in the world only makes around 25%.

If Bloomberg is delusional enough to think that people will ditch their Rolex or Omega for an Apple, then they get what they deserve, I guess. My guess is they won't really capture any of the current watch market at all. However, I do believe they will convince the legions of Apple fans, who don't currently wear a watch to consider this product. Basically, they won't capture any marketshare, but will create their own niche market.

With all that said, I still see this as being a long term flop. Watches have basically been obsoleted as time keeping instruments, but have re-surged as jewelry. Wearing a Ulysse Nardin on your arm is fashionable. Wearing an Apple watch, no matter how hipster you think you are, is just plain pathetic.

Speaking of Citizen, they already make a watch that integrates with the iPhone. The Proximity series uses bluetooth to sync time through the iPhone, plus the watch also alerts you to received texts/emails and alarms programmed in the phone. It's still classic analog, uses their Eco-Drive solar charging and actually seems somewhat practical.

So yes, you can quote me. I might be wrong, but I'm going to call this an Apple flop in the long term. Yes, we all grew up with the sexy Dick Tracy video watch (ok, at least I grew up back then). We thought it was soooooo cool. But now that it's here, I'm pretty sure no one is going to live with these long term.




RE: Completely missing the mark
By ritualm on 3/5/2013 8:04:44 AM , Rating: 1
quote:
Watches have basically been obsoleted as time keeping instruments, but have re-surged as jewelry.

When I need to know what time it is:

- on a phone: take the phone out of whatever pocket, bag, holder, turn it on
- on a watch: look at my wrist

When I need to recharge:

- on a phone: worst case scenario is a scant 60-90 minutes between charges, best case scenario never goes beyond two full weeks.
- on a watch: worst case scenario, swap in a new battery after 6-12 months.

Bloomberg isn't delusional when it thinks people will replace their existing watches with Apple. Put a shiny fruit logo and people will buy it, even if all they get was a large slab of mirror. And you'll see lots of people wear this publicly in no time at all.

Meanwhile, I'll keep using my Timex 'dumb' watch and laugh at all the folks who overpay 10X+ for something this incredibly useless.


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