Why the Apple Watch will be a Hit. Flop Not
I keep seeing analysts coming on CNBC arguing/ positioning themselves, making a case why the Apple Watch will be a flop. The reasons are largely the same- the technology isn't ready, the battery has the potential to run out in 2.5 hours if used continually, a lack of interest amongst those originally polled who stated they would be interested in the watch, that it will only be Apple loyalists (of which there are plenty) who will drive initial sales, etc etc.This is all in juxtaposition to CEO Tim Cook's actions and words. He's continually expressing the utmost confidence in the watch, stating he couldn't imagine life without it, stating that its capabilities will far surpass what we're expecting.
When Apple fell following a quarterly report deemed “lackluster” by Wall Street, and Apple fell precipitously to a post-split $72 a share (about $500 then,) Cook used Apple's massive treasury to buy back a ton of shares. He stated, and I'm paraphrasing, “I'm surprised by the drop in our share price. I know what we have coming out. I want to be aggressive at these prices.”
Some pundits like Jeff Macke from Yahoo finance stated that he was considering unloading his shares as the only conceivable way it didn't fall through the then price of $500 was because Apple was artificially keeping the price afloat with their buying.
And today, where do shares sit? In excess of $875 (pre-split) … And why? Because the iPhone 6 and 6 Plus were massive hits, destroying all expectations.
Have any of these pundits put on a watch/ played with it? Nope.
When Apple announced the iPad analysts poo-poohed it as merely a bigger version of the iPhone. Up until then, no one was interested in tablets. Guess what, Apple got the recipe right, people purchased in mass, competitors quickly copied.
If today's naysayers are wrong, no one will really remember. If they're right, they get to crow about it. From a career perspective as a paid pundit, there's more upside to being the contrarian and demonstrating how smart you. (Note: I'm not saying there's no downside to being wrong, it's simply outweighed by the upside, which a strategizing analyst looking to build a business will likely take into account)
Yes, I realize that Mr. Cook has every reason to build the hype, to put the best spin on the subject. But so far he's been very credible, and careful with his choice of words; from renewable energy to buying back stock at the right time, to his faith in the iPhone 6.
Plus, for God's sakes, he's worn the watch!
Hey, maybe Tim Cook is willing to sacrifice some of his credibility for the hype machine and a couple extra sales. I'm betting he's not.Look for the iPhone 6 to be the first hit in the wearable market space.