'iWatch' could 'be a $6 billion opportunity for Apple,' says analyst
Why should Apple scrabble in the cut-throat TV market when the wristwatch market is far more lucrative? One analyst crunched the numbers and found that an 'iWatch' could pull in twice as much profit for Apple than a TV could.
There's been a lot of chatter that Apple, renowned for revolutionizing portable music players, smartphones, and tablets, is getting ready to change wristwatches forever. And one analyst thinks that it could be worth billions to Apple.
Yes, that's billions. With a "b".
Citigroup analyst Oliver Chen has been crunching the numbers, and he's pulled together some figures.
Speaking to Bloomberg, Chen said he believes that the iWatch could "be a $6 billion opportunity for Apple", and that there is "plenty of opportunity for upside if they create something totally new like they did with the iPod".
According to Chen, the global watch market is worth some $60 billion a year, and his "$6 billion opportunity" depends on Apple capturing 10 percent of the market.
But the margins on watches are huge, along the lines of 60 percent. Chen's back-of-the-envelope calculations point to the iWatch generating a gross profit of $3.6 billion for Apple.
The iWatch, according to Chen, would be worth more to Apple than capturing 10 percent of the TV market, which would only net Apple a gross profit of $1.79 billion.