Investment firm UBS analyst Steven Milunovich has said in a note to investors today that Apple will launch a so-called ‘iWatch’ later this year for a projected average price of $300, AppleInsider is reporting. The analyst also believes that at a selling price of $300, ‘iWatch’ sales could be similar to the company’s wildly successful iPad, hitting 21 million units in fiscal 2015 and 36 million units in 2016.
According to Milunovich, Apple would add $6.5 billion to its projected fiscal 2015 revenue, and about $11 billion revenue to its fiscal 2016. He also sees the ‘iWatch’ being 30 to 40 basis points dilutive to Apple’s overall margins. UBS’s previous 12-month price target for AAPL stock was $700, but with the company’s 7-for-1 stock split going into effect today morning, the investment firm has a newly revised, though unchanged price target of $100.
We are more confident that Apple will be introducing the iWatch before the holiday season following WWDC’s introduction of HealthKit, recent healthcare hirings, the acquisition of LuxVue Technology, and positive comments from Eddy Cue at the Re/Code Conference,” he wrote.
“We expect iWatch sales to roughly track iPad unit sales — similar penetration rates would mean higher sales,” he said. “iWatch might do better because the customer base is larger than when iPad launched and the ASP might be less. On the other hand, iWatch is the first product to be worn, which might not appeal to all users.”
Shares of Apple opened at nearly $93 and were trading slightly higher as of earlier today.