“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.