1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Quick Pen
Quick Pen
Articles (437) 

Will This Latest Development Harm Apple’s Prospects This Year?

July 12, 2014 | About:

According to the latest round of rumors, the much awaited Apple (NASDAQ:AAPL) iWatch is not going to hit the streets in September (though it might be announced in October), and the eager consumers will have to wait at least till December before they can quench their thirst. The iPhone maker is now slated to begin mass production of the device from early November. So, what does this mean for the Cupertino giant, and for its peers? Let’s dig in. But first, let’s check out what caused this delay.

The Reason For The Delay
Sources close to the matter mentioned that the delay in the production is attributable to Apple’s desire to make sure that the hardware and the software used in the device are in perfect conditions. The tech mammoth has always put in a lot of effort to make sure its customers get the best possible user experience, and this is only possible when the products are top notch. Any one familiar with the company’s offerings can vouch for the fact that Apple puts in everything best in its devices, and the same is the situation this time also. The company doesn’t want any lose ends.

Apple already decided to wait till 2014 end to enter the segment, a long time since Samsung (SSNLF) made its debut. And now it’s pretty clear why this wait was so necessary. The market wasn’t developed back then and the device would have met with poor consumer acceptance, exactly what happened with the Galaxy Gear series. Right device at the right time and with the right configuration has been the key to Apple’s overwhelming success and the company doesn’t want to divulge from that.

Apple iWatch concept

Implications For Apple And Its Peers
The first thing that came to my mind when the rumor surfaced was that Apple will be missing out on the Thanksgiving holiday sales. The fourth quarter of the year is the time frame where the company records the maximum sales and this pushed up the yearly performance of the company heavily. Now, losing out on a valuable holiday is not the best thing for a company that so heavily depends upon such luxury items.

Peers such as Google (NASDAQ:GOOG), Motorola, LG, Samsung are all ready to set the stage on fire with their smartwatch offerings. Google Nexus smartwatch looks great and the Nexus branding can take it a long way. Next, Moto 360 has been in talks for some time now and the consumers are excited about the gadget. Samsung is now going to try its hands on an improved Gear and is not leaving any stones unturned to make it a success this time. With so much going on, Apple might feel the heat because of the delay.

The peers might get a competitive advantage, banking on the consumers who all were looking forward to buying a smartwatch. Now, being out of choice, these consumers will have to go with smartwatches from players other than Apple. While many might just wait out till the iWatch comes, many others are sure to go for alternate manufacturers.

Nevertheless, Apple will get the chance to bounce back in the game during the remaining holiday season. Surely losing out on the November sales will hurt the company. But the company has consciously chosen to wait out and make sure everything is top notch. In the mean time Apple has got a lot of other things going, such as the next iPhone with larger display, the latest iOS and the newest bunch of health focused apps.

Departing Thoughts
The Cupertino tech goliath needs a new-to-the-market gadget to reduce its dependence upon the iPhone and the iPad. Over the years these two devices have contributed massively to the top line, but now it’s time to create a new segment that can complement the company’s growth. Apple has big plans in store for the iWatch and its actions speak louder than words. Recently the company poached TAG Heuer Sales Director Patrick Pruniaux for the marketing of the devices. The top management is of the opinion that Patrick, with his valuable experience, will contribute greatly in making iWatch another success story. Though it might miss out on Thanksgiving sales, the remaining holiday season will surely boost Apple’s success.

About the author:

Quick Pen
A seasoned writer with keen interest in the automotive, technology, telecommunication, retail and aerospace sectors.

Rating: 0.0/5 (0 votes)


Please leave your comment:

GuruFocus has detected 8 Warning Signs with Apple Inc $AAPL.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Quick Pen

User Generated Screeners

DBrizan2017sep22 1045p
andrewgu999nick scali style
liuzishudeep value non-div
star1907Rule #1
star1907C3 20% Growth 5 yr
EhrlingerT. Rowe Price Group
NorvasP/S good growers
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat