Apple unveiled its latest product category, the Apple Watch, and all indications are it will be another big seller. It covers the spectrum for a new product, from tech to fashion to luxury goods. Analysts have chimed in on how big the Apple Watch will be for the company, but the big winner might be the iPhone.
To use the Apple Watch requires an iPhone. The Watch pairs with the iPhone 5 or 6 models and becomes an additional screen for the handset and adds what is shaping up to be a lot of apps. At the Apple Watch launch event the company demonstrated capabilities it adds to the iPhone in tow, like making phone calls and performing text messaging.
If sales of the Apple Watch reach the level analysts predict, it will push sales of the iPhone 6 and 6 Plus. Buyers will want the latest iPhone to pair with the new Watch, even if they already own one of the iPhone 5 models.
This should be particularly true in the huge Chinese market. As Tim Cook shared at the event, Apple is opening retail stores in China at a rapid rate. It seems the Chinese are snapping up Apple products in volume, and this will likely be the case when the Apple Watch goes on sale in April of this year.
Analysts are projecting that Apple will sell almost 20 million watches this year, and I think that may be conservative. If the prediction is accurate, and only 10 percent of those watch sales spur iPhone 6 sales, that's a whopping two million phones sold due to the Apple Watch.
Forbes has calculated that the average iPhone sale price is $687. If that's close, the Apple Watch effect as described will generate a whopping $1.3 billion in iPhone sales this year. That is serious money by anyone's standards.
Tag team retail sales of the two devices may not be the only Apple Watch effect. Don't be surprised to see major carriers in the US offering iPhone/Watch bundles for both new customers and those upgrading their phone. Perhaps they might offer some sort of price incentive when buying both devices, such as a special offer involving data plans. They'll directly use the Apple Watch as an incentive to buy a new iPhone.
This is what I expect to see happen, though others may disagree with me about the Apple Watch effect. Don't be surprised if this time next year Apple shares a staggering figure about bundled iPhone sales.