Apple Watch’s potential impact on Apple earnings

“While speculation as to how well the Apple Watch will sell is kicking into high gear, I wanted to frame the discussion a bit differently by publishing EPS matrices covering approximately 50 different Apple Watch sales scenarios,” Neil Cybart writes for Above Avalon. “While the definition of success is largely subjective, and mostly dependent on how Apple frames the Apple Watch story, the device’s impact on Apple’s financial picture, given a set of parameters, is less open to debate.”

“The easiest way to interpret these matrices is that at sales of 10M, Apple Watch’s overall impact on AAPL EPS will be relatively modest (approximately 4% of 2015 EPS.) At 25M, Apple Watch would represent around 10% of 2015 EPS, still modest and easily overshadowed by iPhone sales fluctuations,” Cybart writes. “If Apple shipped 35-40M Apple Watches, the impact on EPS becomes more sizable, potentially reaching 15-20% of overall EPS. ”

Much more in the full article here.

4 Comments

  1. I think initial sales will be modest, as people will want to visit the store and play around with the devices before purchase. They’ll be checking out quality, design, and options, then thinking through whether the new devices will be worth it to them being initial buyers.

    I fully intend to purchase a stainless model, and already have my preferences based on the photos online, but I will be influenced greatly by actually touching the new products.

    So, I’d expect people to visit the stores to explore their options, then leave without a sale to think over the options and whether they really want to spend $500, or more, on it.

    That’s probably what I’ll do, even though I fully intend to buy one once I make up my mind. Of, course the financial types will jump on this delayed purchase as a failure to meet their expectations, but what else is new?

  2. Can I just say, the advertising on this site has gotten even more distasteful than before. It was already disgusting.

    But seriously: “Why was this video banned? She is over 50. Last chance to watch it.” What the living hell? Does your mother know you run this web site?

  3. I remember the iPhone didn’t have any apps when it came out, well web apps. It started slowly and I think once the developers get into this thing. We will see all kinds of apps we never knew we couldn’t live without. If not, it’s still a great wearable.

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