Apple Watch Could Be the Next Big Revenue-Driver
Tech conglomerate Apple Inc. (NASDAQ:AAPL) is gearing up for its March event, when it is speculated to reveal its two new products. AAPL stock had a great run this year and is poised to soar further, as we bid farewell to 2015 and embrace the New Year.
Apple is likely introducing a new installment of the “iPhone” and “Apple Watch” in March. While I’m certain that the rumored smaller “iPhone 6c” will be another hit product, what I’m really looking forward to is the expected sequel to the Apple Watch.
The successor to the original, the rumored “Apple Watch 2” will far beat its predecessor on next-generation features and will likely outpace the market’s current wearable technology. The watch is rumored to be have been upgraded with a camera and better health tracking technology, along with a better battery life. (Source: “Apple plans March Apple Watch 2 event, 4-inch ‘iPhone 6c’ possible,” 9to5Mac, December 8, 2015.)
Until now, Apple’s top revenue driver has been the iPhone. The “iPad” has been facing slipping sales lately and the Mac’s growth (including “iMacs” and “Macbooks”) has been sluggish. Apple’s greater reliance on one product, the iPhone, has had investors worried over whether the company will be able to innovate beyond this core. I’m seeing the Apple Watch 2 as the next big product from the company.
However, the bears are, once again, barraging AAPL stock with negativity, as they continue to short the position. AAPL stock is seeing an upsurge in its short interest this month, but Apple stock investors have little to worry about; this mayhem has nothing to do with the company’s key fundamentals.
New data from the International Data Corporation (IDC) shows that Apple now ranks second in the wearable technology industry in terms of market share. (Source: “Wearable Market Remained Strong in the First Quarter,” IDC, June 3, 2015.)
Not impressed? What if I told you that Apple wasn’t even on that list just two quarters ago? The company has made it to the top within six months of launching its product. That growth is astounding! Compare this to the first quarter, when the Apple Watch had barely hit the market, and at that time, Fitbit, Xiaomi, Garmin, and Samsung, in that order, enjoyed the top spots. (Source: “Worldwide Wearables Market Soars in the Third Quarter,” IDC, December 3, 2015.)
When the company first launched the product, skepticism was growing that Apple’s wearable technology venture would prove to be a dud once the hype subsided. Clearly, Apple has proved the bears wrong. After having beaten rivals at the smartphone war, Apple is now on its way to win the wearables war.
This year’s holiday season has been by far its best ever season in terms of sales and what’s impressive is that the company didn’t even have to try hard to achieve this. Apple put up no promotional price cuts on its web site; all promotions were led by retailers, yet sales have been outstanding for the company.
The top-performing retailer on Black Friday, Target reported that Apple products were some of its top door-busters in its stores, but it wasn’t the iPhone that drove store traffic for the retailer; it was the iPad and Apple Watch.
The Bottom Line on AAPL Stock
New Year’s Eve is just around the corner and 2016 is expected to be a huge year for Apple, as management gears up to launch new products. The new Apple Watch will likely be an especially big winner for the company.
Separately, the company is also stepping up its game in the payments processing, virtual reality, and automaking markets.
To wrap it all up, AAPL stock is poised to achieve promising gains in 2016.