Apple could sell 30 to 60 million iWatches over the first year

If iWatch sales followed the same trajectory as iPhone sales, Apple would sell 30 million units over the first 12 months, and at $300 each that would boost revenue by $9 billion

Apple's buoyant ecosystem, combined with a brand loyalty-generated "halo effect" could see Apple sell between 30 and 60 million iWatches during the first year, claims Morgan Stanley analyst Katy Huberty.

(Source: Morgan Stanley)

According to Huberty, Apple essentially only has to release an iWatch and then sit back and rely on the fact that Apple fans will buy whatever comes out of Cupertino.

And Huberty offers three sales scenarios.

  • Base case: iWatch sales follow the same trajectory as iPhone sales, and Apple sells some 30 million units, which if sold at $300 each would boost revenue by $9 billion.
  • Bull case: iWatch sales follow the same trajectory as iPad sales, and Apple sells some 60 million units, and shares increase to $132 (equivalent to $924 at pre-split prices).

But what if things go wrong? There's where the bear case comes into play.

  • Bear case: iPhone sales flatline, there's no interest in iWatches, and Apple's share price falls to $74.

Not long ago UBS analyst Steven Milunovich said that he believed that the iWatch could match initial sales of the iPad, with the Cupertino giant shipping 21 million units during the 2015 financial year, and 36 million units during 2016. Following this trajectory, the iWatch would become Apple's fastest-selling iOS product to date.

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