iWatch could be a bigger hit than iPad



While smartwatches are currently a niche product, they may not stay that way for long, says USB analyst Steven Milunovich, who predicts that the iWatch could match sales of Apple’s iPad — unloading 21 million units in fiscal 2015 and a further 36 million units the following year.

The iPad, by comparison, sold 19.5 million units in its first year, rising to 47.6 million in its second. (The iPhone moved a relatively paltry 5.4 million units in its first year of sale, since it was still establishing Apple’s mobile platform.)

“We expect iWatch sales to roughly track iPad unit sales — similar penetration rates would mean higher sales,” Milunovich wrote in a note to investors. “iWatch might do better because the customer base is larger than when iPad launched and the ASP might be less.” However, he also hedges his bets — noting that the iWatch is Apple’s first wearable device, and that this might not appeal to all users.

In terms of launch dates, Milunovich agrees with recent reports placing it at later this year.

“We are more confident that Apple will be introducing the iWatch before the holiday season following WWDC’s introduction of HealthKit, recent healthcare hirings, the acquisition of LuxVue Technology, and positive comments from Eddy Cue at the Re/Code Conference,” he wrote. He also suggests that with a projected average retail price of $300, the iWatch could add 1-2 points of earnings per share growth. At this price Milunovich believes that Apple could achieve product margins of around 25% at launch — increasing to the low 30s over several quarters.

For those wondering what this would mean to Apple’s bottom line, Milunovich’s estimates would add a projected $6.5 billion in revenue to Apple’s fiscal 2015, and around $11 billion in revenue to the company’s fiscal 2016.

Source: USB note to investors


  • “iWatch absolutely will be bigger than iPad.”
    Fixed it for ya. ; )

    • BarryDwight

      How so? The iPad is a device for so many different types of people.. I see iWatch as being mostly for fitness buffs and a small number of foks who simply HAVE to have a remote control on their wrist at all times. For me and I’m sure many others, my pocket will do just fine. Maybe I’m just not seeing the forest for the trees here.. Anything’s always possible.

      • tHoj101

        I’m sure a ton of people said ‘I don’t need an oversized iPod’ when the iPad came out, and look what happened there.

      • Bo Guss

        This will be huge for people on the go. Which is pretty much everyone. A friend of mine has the Pebble Smartwatch, and I’m guessing the iWatch will do what that does, and then some. His Pebble is synced with his smartphone. So when he gets a call, a text, a notification, it all goes to his watch. He never has to take out his smartphone from his pocket. He can also reply back from his watch. Very convenient if your hands aren’t free. Great for joggers, cyclists, motorcyclists, rock climbers, etc…

  • Grunt_at_the_Point

    Say it isn’t so. Samsung will be devastated.

  • Craig Grummitt

    I think you’ll find the analyst is from UBS, the investment banking company. A representative of USB, the computer port, declined to comment…