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iWatch could bring $2.3bn a year to Apple, but may be a 'grave mistake'

o Karen Haslam
22.03.2013 kl 12:34 | Macworld U.K.

Sanford C. Bernstein analyst Toni Sacconaghi reckons Apple could capture an additional $2.3 billion of cash flow a year if it started selling a $250 iWatch. However, a number of reports have appeared suggesting that iWatch may not be the best path for Apple.

 

Sanford C. Bernstein analyst Toni Sacconaghi reckons Apple could capture an additional $2.3 billion of cash flow a year if it started selling a $250 iWatch.

However, a number of reports have appeared suggesting that iWatch may not be the best path for Apple. Forbes suggests that the wristband smartphone accessory will not have enough kudos attached for it for Apple; and Fortune thinks that the watch market is too low-margin to be worth Apple's effort.

Sacconaghi said: "The successful introduction of the [iWatch] device could illustrate that innovation remains high at Apple and underscore the option value of owning Apple as a platform company - ie, having a large and loyal iOS installed base that Apple can sell additional products and services into," writes Forbes' Haydn Shaughnessy.

He concedes that: "If any company can make a success of a smart watch, it is Apple because Apple will explore the use-case more fully that its competitors could."

However: "I cannot believe Tim Cook will want a legacy of people checking their watches every five minutes. An iWatch will not revive its [Apple's] reputation for innovation and it's easy to read the figures as a gouge on existing customers."

"Apple needs to think of its next generation of products. If it is a wristband smartphone accessory, how much kudos will come with it? Next to none. On the other hand there is a bridge to be built between computing and wearables," suggests Shaughnessy, suggesting that Apple should instead market its own line of clothing.

iWatch will be a "grave mistake"

It will be a "grave mistake" if Apple (and Samsung) enter the "low-margin cellular accessory market" writes Fortune's Cyrus Sanati.

Sanati notes: "The competition is fierce and the barriers to entry are incredibly low."

He adds that an iWatch is likely to appeal only to a "limited subset of consumers of unfashionable geeks and pudgy weekend warriors."

Sanati also makes the observation that: "Your supposed smartwatch would be pretty dumb without a smartphone in close proximity."

A dumb watch

The iWatch wouldn't actually be Apple's first entry into the watch market. There was an ecosystem of watch straps which sprung up around the iPad nano leading Apple to ship a number of software watch faces with the device. The company has now stopped shipping the watch shaped nano.

"Why didn't iPod nano watch work?" asks a Gigaom report.

"I continued to wear my iPod nano as a watch for a little over a year in all before the novelty of wearing an iPod as a watch stopped outweighing its shortcomings as an actual watch," writes Geoffrey Goetz.

The shortcomings were the need to regularly recharge the battery; daily syncing requirements; earphone cable issues; and the fact that "it just could not tell the time" The clock face wasn't always on, he explained, noting: "Having to turn on your watch to tell the time sort of defeats the purpose of placing it on your wrist in the first place."

In defence of Google Glass

On another matter of wearable technology, Mashable is defending the Google Glasses from the privacy advocates in an article entitled: "I, for One, Welcome Our Google Glass-Wearing Cyborg Overlords". The article suggests that

"Heaven forbid that here, in the 2010s, jetpack-less and flying car-free, we might actually gain an item of personal gear that looks the teensiest bit futuristic".

If Google Glass is successful we'll all be on camera 24 hours a day as we become Google's eyes and ears on the world. This is likely to cause privacy concerns. In fact a Seattle cafe has already announced that anyone wearing Glass will be banned from the establishment.

Follow Karen Haslam on Twitter / Follow MacworldUK on Twitter

Related:

The iWatch conundrum

iWatch rival: Samsung exec reveals it's readying smart watch in race against Apple

Apple iWatch set to disrupt what exactly?

iPhone 5S, Apple Television delayed, but iWatch to launch this year, says analyst

Apple iWatch: is it an iPhone nano on your wrist?

Which way Apple ticks on the iWatch will show how gutsy the firm remains

Apple patent adds further iWatch evidence to growing pile, but do we need one?

Wearable computing steps out of fantasy

Keywords: Consumer Electronics  
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