Just Apple Inc. (NASDAQ:AAPL) is expected to offer the iPhone 6 in more than one size this year, so now we have a report which suggests that the iWatch might also come in multiple sizes using various materials. He suggests that the goal would be for Apple to compete with smart watches in all ends of the market.
But perhaps what is most shocking about this report is the suggestion that Apple Inc. (NASDAQ:AAPL) would have the gall to charge thousands (yes, thousands plural) for its smart watch.
Analyst offers pricing details about iWatch
KGI Research analyst Ming-Chi Kuo has a pretty good track record in terms of providing insider details about Apple Inc. (NASDAQ:AAPL)’s products before they come out. Now in his latest report, he says not only will the iWatch come in multiple sizes at multiple price points, but also be very expensive.
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Of course we wouldn’t expect anything less coming from Apple Inc. (NASDAQ:AAPL). The company charges ultra-premium prices for its products, so people would expect to pay more for its iWatch. But would they pay “several thousand US dollars” for it, as the analyst says?
Kuo describes the rumored iWatch
According to the analyst, the less expensive iWatch will have a display that is 1.3 inches in size. He said it will be designed for those who have smaller wrists. The larger model will feature a 1.5-inch display. He believes both of them will have flexible AMOLED screens and sapphire glass covers and that the mechanical parts might be made of liquid metal.
He echoed past rumors that the smart watch will have several health sensors which will monitor everything from motion to heart rate. The iWatch will also likely integrate with the iPad and iPhone, and Kuo said it would have a chip for near-field communication and the capability to charge wirelessly. Of course it wouldn’t be one of Apple Inc. (NASDAQ:AAPL)’s devices if it didn’t look fashionable, which he says it will be.
Kuo expects to see the iWatch begin shipping in the third quarter of this year. He predicts that it will be this year’s most important product for Apple Inc. (NASDAQ:AAPL)—even more so than the iPhone 6. He’s also already predicting how many Apple will sell. He expects the company to sell 5.5 million watches this year and then between 30 million and 50 million next year.
Apple’s new competitors: Rolex, Cartier
If Apple Inc. (NASDAQ:AAPL) really does plan to charge thousands of dollars for the high-end version of its iWatch, then it wouldn’t be competing with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s Galaxy Gear or any of the smart watches made by other electronics makers at the high end. Instead, the company would be taking on Rolex and other luxury watch makers.
As The Street’s Chris Ciaccia points out, this market is extremely small, which would mean that the iWatch wouldn’t bring in very much revenue for it. He believes that Apple Inc. (NASDAQ:AAPL) will actually price the high-end version at around $1,000 and that the model “most people buy” will cost around $300.
Could Apple compete with Rolex?
Most of the smart watches being sold today are around the $200 to $300 range, and Ben Lovejoy of 9to5 Mac believes that even if the iWatch is priced closer to $500, people will still buy it. He also thinks Apple Inc. (NASDAQ:AAPL)’s smart watch will look more like a watch and less like a small smartphone strapped to the list. Contrary to what Ciaccia thinks, he wouldn’t be surprised if Apple ends up competing with luxury watch makers instead of makers of Android smart watches.
In addition, even if the single-digit thousands, he makes the argument that the market is fairly large.