When Apple reveals its Q2 2014 sales numbers later today, few people are expecting any miracles: Mostly, Wall Street expects that growth will have stalled. All the more reason why Apple needs a major new product like the iWatch to give them some of their mojo back.
One business that everyone definitely expects to have declined this quarter, though, is the iPod. Apple CEO Tim Cook has himself said that the iPod is a “declining business” and sales have been dropping ever since 2008.
The bad news for iPod fans is that at least one analyst thinks the iPod business is in such serious decline for Apple that they won’t bother updating the line at all in 2014. But the good news? He thinks the iWatch will replace the iPod.
In a research note to clients, the Susquehanna Financial Group’s Christopher Caso agrees with other analysts that the iWatch is coming in 2014 in a couple of different screen sizes. He says Apple is targeting to make 5 million to 6 million units initially.
Intriguingly, though, Caso says he thinks the iWatch will “essentially replace the iPod in the consumer portion of AAPL’s product lineup.” He thinks consumers will opt to buy an iWatch instead of an iPod.
That makes a lot of sense. Steve Jobs himself, when unveiling the sixth-gen iPod nano, commented that it could be worn as a watch. The iWatch will be aimed at the fitness market, a group of customers who are still buying iPods because they are smaller and easier to carry than iPhones. If the iWatch can play music as well as read biometrics, it’s going to be the music player of choice for exercise nuts.