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March 15, 2013

The iWatch has Potential Margins of 50% or More

by jpvergara7120

According to an article in BusinessWeek, Apple is considering the launch of a new smart watch that will act as an iPhone accessory. Just to name a few of the functions that this product would provide, users would be able to make and receive calls and track map coordinates using the Maps application without having to touch the phone. Analysts predict that this sort of device could have potential margins of 50% or more, but what Apple must do is persuade the consumer that there is nothing like the iWatch in the market today.

While the watch market has produced large revenue streams in the past few years (and therefore one might argue that Apple has a great opportunity to profit from these sales) the company still faces competition in the smart watch industry. The article mentions that Pebble Technology, a Palo Alto-based startup, has already begun to take orders for their highly anticipated smart watch. Their product will be compatible with both Apple and Google software and offers numerous functions: incoming caller ID, email and text previews, calendar alerts, Facebook messages, weather alerts, etc.

Nonetheless, Apple certainly has the resources to develop and release a smart watch that offers various functions. There has been a great deal of discussion surrounding the possible unveiling of a new Apple smart TV and therefore it will be interesting to see what path the company chooses to take in the coming year.

 

Link to article: http://www.businessweek.com/articles/2013-03-07/how-apples-iwatch-can-be-a-moneymaker

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