“When it launched Apple Watch, many observers wondered why the company had spent significant efforts developing a single new product, one that didn’t appear to have the same unit sales potential as iPhone or even iPad,” Daniel Eran Dilger writes for AppleInsider. “Looking at the origin of Apple Watch, it becomes more clear that it is closer to being a revamped continuation of iPod than an entirely new concept. ”
“Further, rather than being a huge, high risk, speculative investment, Apple Watch borrows heavily from Apple’s existing core competencies and technologies, while also necessitating the creation of prerequisite technologies that benefit its other product lines, including Continuity and Apple Pay,” Dilger writes. “Apple Watch also taught the company how to sell a new class of products, one that is equal parts fashion and technology, and which requires a different type of retail experience. Those lessons will help the company venture into new markets. Automotive sales are far closer to the sales model of luxury watches than selling boxes of electronics.”
“Even if Apple Watch were only moderately profitable, it would already be an outstanding accomplishment and a strategic success. We actually know that Apple Watch has been far more than that however,” Dilger writes. “Last year alone, it generated around $7 billion in revenue with high margins. That’s comparable with the performance of Amazon Web Services cloud business, and by itself as a product is already far more valuable than the entire hardware business of Amazon Fire, Google Nexus, Alphabet Nest, or Microsoft Surface.”
Read more in the full article here.
MacDailyNews Take: We can’t wait to see what’s next for Apple Watch! Hopefully, we’ll hear much more next month at WWDC.