Apple set for major move into wearable technology
Revolutionary device is to be unveiled on September 9
Published 31/08/2014 | 02:30
Apple Inc is seldom first with new technologies, yet it's been able to create huge product categories. The company did that with iPods for the MP3 player market in 2001, iPhones for the smartphone industry in 2007 and iPads for tablets in 2010.
Now the company will attempt to repeat that feat in wearables, an emerging group of devices that track people's activity and health. Apple will introduce a wearable gadget along with new iPhones on September 9, a person with knowledge of the plans said.
Notices for the event, which will also take place in Cupertino, were sent out last week.
While companies such as Fitbit and Jawbone have made some headway introducing wearables to the public, global sales of the activity trackers hit just 13.6m units last year. That's about the number of iPhones Apple sells in a month, giving chief executive officer Tim Cook room to boost the size of the market.
The new device also will give the clearest sign yet of where the company is headed without Steve Jobs at the helm. Cook, who took over almost three years ago to the day, has been under pressure to show that the company will continue to deliver breakthrough products.
"How he's perceived in the next few years will be decided in the next four months," said one analyst who has a buy rating on Apple's stock.
Apple will give the new wearable a boost by pairing its debut with its flagship product, the iPhone.
The company also may be trying to manage expectations for the new device, signalling that it's more of an accessory instead of a category that stands by itself.
ANALYSIS PAGE 5
By contrast, when the iPad was introduced in 2010, Apple held a special event just for that product. A wearable device also isn't likely to make a big impact on Apple's balance sheet anytime soon. One analyst at Morgan Stanley, said in July that Apple may sell 30m to 60m wearables at an average price of $300, generating at least $9bn in additional sales.
That would be have been a big boost for the company when the iPhone became available in 2007, when annual revenue was $24.6bn.
Now, analysts are predicting sales of $180.2bn for the current fiscal year that ends next month.
Apple has simply become too big for a new product like this to have a significant and immediate financial impact.
Still, anticipation for the event has given Apple's shares a lift, hitting a record price of $102.25 last week, up 28pc this year.
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