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Analyst: iWatch May be More Profitable Than iTV

By - Source: Bloomberg | B 20 comments

We'll see if Apple can meet its 2013 deadline for the rumored iWatch.

Rumors of Apple's much needed iWatch still insist that the wearable gadget will launch this year. Given that the company hasn't introduced anything new since the original iPad, it's not surprising that Apple is pushing for a 2013 release. Let's also not forget that Microsoft just launched the touch-friendly Windows 8 and Windows RT – followed by a string of form factors -- and is set to unload the Xbox Infinity on gamers, cranking up the Cupertino, California heat.

That said, 2013 is about to become a nasty war for the consumer dollar: Microsoft vs. Sony, Microsoft vs. Apple, Sony vs. Apple, Google vs. Apple and Google vs. Samsung. For the consoles, it's not just about gaming anymore, but about pulling consumers away from their tablets and smartphones while providing similar short-n-sweet experiences. Nintendo? It's lost in its own little Mii-infested world, refusing to fully move on from decades past.

So what does the iWatch have to do with gaming? It doesn't really, at least, not that we know of. It's Apple's means of staying in the gadget spotlight in 2013, a device to tide Apple fans over until iTV finally lands in living rooms to really give Microsoft and Sony a hard time. Bloomberg reports that the rumored iWatch will be more profitable than the TV project because gross margins on watches are about 60-percent, four times the margins for televisions.

"This can be a $6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod -- something consumers didn’t even know they needed,” said Citigroup Inc. analyst Oliver Chen.

According to Chen, the global watch industry will generate more than $60 billion in sales in 2013 whereas the TV sector will generate $119 billion. Yet if Apple enters both markets with a 10-percent share, it will generate a gross profit of $3.6 billion for watches and a $1.79 billion for TVs. That said, it's understandable why Apple would push an iWatch first – it may even serve as a TV remote and motion detector for iTV.

Bloomberg reports that Apple has a team of 100 employees, led by lead designer Jonathan "Jony" Ive, working on the wearable device. Features may include handling calls, checking map coordinates, identifying incoming calls, counting steps using a built-in pedometer, monitoring health-related data and more. Apple has filed at least 79 patent applications, and is shooting for a fall 2013 reveal, likely alongside the new iPod Touch and iPhone generation.

Additional reports indicate that yes, the iWatch will use a full-blown version of iOS. Remember that sixth-generation iPod Nano that you could wear as a watch? That didn't use iOS, but a separate mobile OS that resembled Apple's iPod Touch platform. Using a modified iOS this time around means the device will be able to interact with other iOS devices like the iPhone and iPad. But as TechCrunch points out, the only drawback is that iOS for iWatch could add "one more degree" of fragmentation to Apple's OS.

Unfortunately, the company is reportedly having issues with the battery, only receiving a couple of days on a single charge rather than the targeted four to five for a public release. There's also talk that Apple still needs to work on proper pathways between the iWatch to the iPhone for transmitting information and notifications (which may help with the battery).

If Apple can't get the battery issues under control, the company may delay the gadget until 2014. Yet given all the hardware hitting the market from rivals, Apple is likely hell-bent on a 2013 release so that stockholders can sleep peacefully at night knowing the company is still "innovative."

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Top Comments
  • 10 Hide
    soundping , March 5, 2013 7:46 AM
    I used to have a calculator watch in the 80s.. TRS-80 for freaking ever!
Other Comments
  • 0 Hide
    jasongray , March 5, 2013 7:45 AM
    Much needed iWatch? How much more profit do you think Apple needs in order to survive, given that they're currently sitting on $125billion and growing cash reserves, and their last quarterly revenue was better than Google, Microsoft, Dell, HP, RIM, and Nokia combined? A blowout new product category would be a good indication that they could still innovate post-Jobs, but let's not delude ourselves into thinking that they're suddenly in trouble because a few investors lost their chutzpah.
  • 10 Hide
    soundping , March 5, 2013 7:46 AM
    I used to have a calculator watch in the 80s.. TRS-80 for freaking ever!
  • Display all 20 comments.
  • 7 Hide
    dmuir , March 5, 2013 8:01 AM
    What deadline? Since when did Apple come out and say they were going to release an iWatch in 2013?

    Oh no, Apple better hurry and release the iWatch, otherwise all these "analysts" will look really stupid! Oops. Too late.
  • 0 Hide
    becherovka , March 5, 2013 8:06 AM
    Apple does not need money! This is true they need to give more away in dividends!
    It is interesting if they can do something cleaver with it. But its not for me (someone that hasn't spent a cent with any apple products or services.) The only products that i even considered were the iphone 3 and 3g they were good for their time. But now iphones are boring and lacking too many functions and maybe a couple of features.
  • -4 Hide
    tomfreak , March 5, 2013 8:24 AM
    phones are starting to have water resistant. so I can swim with my phone.

    people still use watch these days? Probably when they are going scuba diving.... but daily use... not so much.
  • 2 Hide
    ojas , March 5, 2013 9:56 AM
    iAnalyst is the most profitable, yes sir.
  • 2 Hide
    wannabepro , March 5, 2013 11:25 AM
    I'm not really interested in something tiny like that.

    I want something resembling the NanoForge from Red Faction Armagedon. Say around a 5 inch screen, going down the top of my arm..

    Make this: Take my money.
  • 1 Hide
    CrArC , March 5, 2013 11:54 AM
    ITV is a television channel, stop referring to this fictional "iTV" nonsense. At least in the UK, that name will never be accepted due to ITV's trademark.

  • -3 Hide
    game junky , March 5, 2013 12:11 PM
    Not gonna lie, I'll probably buy one - here's hoping they make it near indestructable (waterproof, scratchproof, shock resistant, yada yada yada) because I intend to use it at the gym and I am not likely going to be nice to it.

    I will be more intrigued when it's actually revealed and we know more about how it interfaces with other iOS devices. Since it's Apple, it will probably look pretty slick as well. They need a homerun after Tim Cook's recurring case of foot-in-mouth disease.
  • 1 Hide
    g00fysmiley , March 5, 2013 12:46 PM
    I am interested in seeing what apple and supposedly samsung come up with for smart watches, I love my sony smartwatch and it interfaces well with my galaxy nexus for quick glance notifications of texts emails, getting directions and even for the gps uses to determine speed and distance at a glance (all calculated on the phone but displayed on wrist) would love to see something with greater pixel dencity and mroe functionality. making the watch thinner would also go a long ways to making them more adopted. .. then again if google glass beats this and the samsung watch to the market it might render it a DoA product
  • 1 Hide
    catfishtx , March 5, 2013 12:50 PM
    I don't wear a watch, so I am not interested in this device. But, if I did have an iWatch, what is it going to better than the smartphone in my pocket? The smartphone tells time, make calls, displays maps, etc. much better than a watch could. Or is it designed for people who don't have a smartphone but want some sort of smartphone functionality? I guess I am not innovative enough to get it.
  • 1 Hide
    velosteraptor , March 5, 2013 3:05 PM
    game junkyNot gonna lie, I'll probably buy one - here's hoping they make it near indestructable (waterproof, scratchproof, shock resistant, yada yada yada) because I intend to use it at the gym and I am not likely going to be nice to it.

    No no no, you have to spend 80 dollars on an otterbox for that. otherwise the first time it hits the edge of the table it will break.
  • 2 Hide
    rantoc , March 5, 2013 3:07 PM
    Piling up money while evading taxes ect just shows how "American" the company is, greed at its best!
  • 1 Hide
    downhill911 , March 5, 2013 3:10 PM
    Google glass FTApple!
  • 0 Hide
    LukeCWM , March 5, 2013 4:55 PM
    Wouldn't it be more appropriate to compare the expected profit margin to the profit margin of smartphones instead of the profit margin of watches? Truly, the device will be a lot closer in components to a smartphone than to a watch.
  • 0 Hide
    frank_drebin , March 5, 2013 6:06 PM
    somebody say "innovative" one more time!
  • 1 Hide
    pjmelect , March 6, 2013 12:17 AM
    A watch with only 4-5 days battery life ! My watch lasts 4-5 years on a single battery. I don't think it will catch on if this is true.
  • 0 Hide
    Bonestoo , March 16, 2013 8:24 PM
    I wear a watch but I don't think I will ever buy this, especially if it only has 5 days of batter life.
  • 0 Hide
    calmstateofmind , April 2, 2013 8:18 PM
    Who would want to keep having to recharge their watch? People are used to watch batteries lasting years off a full charge, not just a few hours.
  • 0 Hide
    themarin8r , April 7, 2013 9:03 AM
    They already had this marketed, when the Nano was a little square and they had watch straps you could buy for it.