One week after the start of pre-orders for Apple Inc. (NASDAQ:AAPL)‘s smartwatch, investors are impatiently waiting for the company to give some hint of its sale figures from the first week of pre-orders. Some market analysts report that pre-orders have already crossed the one million mark. What does that mean for Apple in the longer term? CNBC’s Jim Cramer commented on the pre-launch success of the smartwatch. Cramer agrees that the Watch is going to have a meaningful impact on Apple Inc.’s revenue in the short as well as long term.
“If there are a million early adopters without even people just figuring out to sync it; what I would say is this is now a 2016 phenomenon because by that time everyone will know that you have to have this as a device. […] My generation felt the watch was an accessory that looked good. New generation does not even regard it as an accessory. Suddenly they’ll have a reason to look at the wrist and it’s the Apple Watch,” Cramer said.
After the first week of pre-orders various market analysts have commented on how big of a category the Watch could become. Pacific Crest says that Apple Inc. (NASDAQ:AAPL) could sell the watch to 5% of the installed iPhone base. Can we assume Apple Inc. will bring wearables to the mainstream and make the Watch a permanent revenue stream? Cramer’s co-analyst on CNBC, David Faber agreed that Apple Watch is the real deal, but said the impact may be elusive in the very beginning due to the sheer size of the company.
“When you’re dealing with a company of this size, you guys well know, it is going to be a while until we really focused on. This is the number that’s going to move the needle. I continue to wonder and think that it’s all about creating an ecosystem for this Watch within of course the larger Apple ecosystem; and it’s going to take years. I suppose this is a good start but it is only that: a start,” Faber said.
Though Cramer predicts the Watch will become a fashion statement with the younger generation in the next two years, he thinks Apple Pay is still a more powerful business for Apple Inc. (NASDAQ:AAPL) and he is more concerned about that. He believes Apple Inc. should focus on Apple Pay to make it more adoptable for providers and retailers. Faber added that even though Apple Pay has a lot of potential for the company, retailers have shown resistance seemingly because they want to keep control of the customer.
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