Analysts: Apple’s iWatch Could Be More Profitable Than the iPad

Source: iWatch Concept by Todd Hamilton

All the cool kids these days seem to be talking about smartwatches, and perhaps the most talked-about smartwatch of all, Apple’s (NASDAQ:AAPL) iWatch, seems to have garnered votes of confidence from several analysts, as well. Morgan Stanley predicts the device could be extremely profitable for the company, potentially generating up to $17.5 billion for the tech giant in just a few years, Apple Insider reports.

Katy Huberty, an analyst at Morgan Stanley, said in a research note to investors that she believes the iWatch could beat even the iPad’s debut sales of $12 billion. She says the reasoning behind her confidence in the iWatch is that it is being positioned and marketed as a “natural accessory” to the company’s other iOS devices, such as the iPad and iPhone, rather than debuting in a completely new product category that consumers are unfamiliar with and don’t yet know how best to utilize.

The iWatch, Huberty writes, per Apple Insider, will likely appeal to both first-time Apple buyers as well as those customers who already have an iPad, an iPhone, or both.

Huberty’s first-year sales estimates are based on zero supply chain constraints and a debut price tag of $299, but even if the company were to suffer supply chain constraints, she said the smartwatch is still likely to bring in between $10 billion and $14 billion in its first year.

Apple has yet to announce a release date for the the much-rumored iWatch, but according to Mac Rumors, the company has already started trademarking the iWatch name in a number of countries, and many analysts speculate the watch may be released along with the iPhone 6 in the second half of 2014. Huberty, per Apple Insider, points to the company’s continued investments in infrastructure and research and development as a sign that the iWatch will enter the market soon.

The market for wearable technology is expected to triple between 2013 and 2018 to $30 billion, according to a CNBC report. Analysts have also mentioned that while Apple’s iWatch isn’t even close to being the first of such products to debut, it’s possible Apple will be the one to do it “best.”

“We haven’t seen, we don’t believe anyway, a device that’s really captivated the imagination of next-generation wearables consumers,” Alex Gauna, managing director at JMP Securities, told CNBC. “I think Apple is really doing something unique.”