) is rumored to launch its much-awaited smartwatch known as iWatch
as early as Oct, 2014. Reportedly, Apple has outsourced the
production of the device to a Taiwan-based company Quanta Computer
Inc., which will begin production from July.
The iWatch is expected to have a rectangular display measuring near
about 2.5 inches diagonally. Per sources, LG Display Co Ltd will be
the sole supplier of the screen for the device's initial batch of
The wearable device is believed to comprise a sensor, which in turn
will enable the user to monitor his pulse. Per reports,
Singapore-based sensor maker Heptagon has been approached by the
iPhone maker for the development of sensors.
Moreover, it will be equipped with a touch interface coupled with
wireless charging capabilities. However, the device needs to be
paired with a smartphone or a tablet in order to carry out
functions like texting and voice chat.
Per sources, the company expects to ship about 50 million units
within the first year from its date of release in the market.
However, nothing in this regard has been confirmed by Apple as yet.
It is believed that this initiative by Apple to extend its foothold
into the wearable devices sector has been taken after rivals
Samsung and LG ventured into the space. The wearable sector is
poised to deliver robust growth with companies like
) set to enter the Android Wear Platform sometime later in 2014.
Per Gartner, wearable smart electronics will emerge as a $10.0
billion industry by 2016, with the chunk of the revenue coming from
athletic shoes and fitness tracking devices. In such a scenario, we
believe that the wearable industry offers a huge growth opportunity
These projections, if they materialize, will benefit Apple, which
of late has been criticized due to the lack of innovative products
in its pipeline. Moreover, the launch of cheaper offerings such as
the recently unveiled iMac is believed to face intense competition
from Lenovo and
) which are the dominant forces in the PC market.
Although, fierce competition from Samsung remains a major headwind,
we believe that the new smartphone launched by
) will not hurt iPhone's growth in the near term.
Additionally, the company has shown some resurgence based on its
expanded capital program, 7:1 stock split, new OS X Yosemite, iOS 8
and Healthkit. The rumored launch of iWatch will be a key growth
catalyst in the long run.
Currently, Apple has a Zacks Rank # 3 (Hold).
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