RBC: Apple Watch Predicted to Earn $10 Billion In First Year Revenue

RBC Capital Markets analyst Amit Daryanani has said in a note to investors today that the upcoming Apple Watch will launch around March of 2015 and will sell around 20 million units in its first 12 months with an average selling price of $520, adding $10 billion to the Cupertino giant’s annual revenue, AppleInsider reports. The firm has also raised its price target for AAPL to $120 per share.

Daryanani predicts that if Apple can sell 2 million units in the product’s launch window, which is usually around two to four weeks, the Apple Watch can add about $1 billion in revenue for the March quarter. He further predicts that gross margins on the device will be at 50%, helping to boost Apple’s overall margins, while admitting that his estimates for the Apple Watch are “conservative”.

“Thus far, Apple has said little about its upcoming Watch, offering a launch window of “early 2015″ and a starting price of $349. Daryanani expects that some versions of the Apple Watch — most notably the fashion-focused 18-karat gold edition — will sell for over $1,000. Though he is bullish on the Apple Watch, Daryanani said key questions remain about battery life, gross margin, penetration rate among the iPhone user base, and the value of Apple Pay integration.”

It must be noted that the analyst’s predicted number of Apple Watch sales is about on par with the number of iPads Apple sold in its first year.