The other day Morgan Stanley analyst Katy Huberty crunched the numbers and worked out that, and that each of those iWatches were priced at $300, then this would add a cool $9 billion to the company's revenue pot.
Now there are a lot of ifs and buts and assumptions and guesses in that equation, but the number that popped out at me was the $300 a unit figure that Huberty used. And while it's a number plucked out of the air, it's a good place to kick off a thought experiment.
If Apple is developing an iWatch, and that would retail for $300, what would it need to do to justify that price?
First thing to note is that Apple products tend to pull in a profit margin of at least 30 percent, so for the purposes of this piece, let's assume 33 percent. This means that a $300 iWatch would cost Apple around $200 to make, excluding research and development costs, and marketing.
So we're looking at what Apple can make for say $200.
The answer to that is a lot. After all, the iPhone 5s had a bill of materials of just under $200 at the time of release, and this is a device that includes a 4-inch retina display, a 64-bit processor, and a huge battery.
Even if Apple decided to pull in a 50-percent margin on the iWatch, at $300, money is not likely to be a problem.
If I were to put $300 down for an iWatch, here's what I'd like to see included.
- Wireless charging: While there's an argument for using a cable to charge smartphones and tablets — because it allows you to carry on using the device while it's charging — using a cable to charge a wearable seems pointless, and wireless charging technology is now good enough to supersede being tethered to a cable.
- Solar power: This is an option to help keep the battery topped up.
- Sunlight-readable display: The iPhone and iPad can be hard to read in sunlight, so Apple needs to address this with the iWatch.
- App support: Apps are a cornerstone of iOS, and the iWatch would benefit tremendously from third-party developer support.
- Go beyond being a second screen: I have no interest in a small, wrist-mounted second screen for my iPhone or iPad, neither do I want a huge "iPhone without the phone" on my wrist. That said, having it display emails, iMessages and other notifications would be useful in tying the iWatch in with the iOS ecosystem.
- Multi-day battery life: Charging the thing daily would be a pain, and increases the chance that it is left to gather dust on a shelf.
- Fitness and health sensors: It should feature a pedometer and heartrate sensor, and these should tie in with the Health app coming in iOS 8. There are rumors that Apple could take this further and fit a glucose meter and sweat sensor.
- Security token: Use it as a token to unlock Macs and other iOS devices.
- Locate feature: I want to be able to find my iPhone or iPad — perhaps by making it emit a sound — with a tap of the iWatch.
- Robust: It has to be able to put up with the rough and tumble of daily life. That means being waterproof and shockproof, and resistant to knocks, bumps and scratches.
- Control the Apple TV: I want to be able to ditch the remote!
What would you want from a $300 iWatch?