Bloomberg: iWatch will run iOS, is due by Christmas

By , Mar 4, 2013

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A few months ago, you couldn’t move without encountering yet another Apple television rumor. But if you are interested in profit – and what company isn’t – the execs in Cupertino should cancel any HD TV and focus on wristwatches. Turns out, the wristwatch business could be way more profitable than Apple-made TVs.

Rival firms lust after Apple’s huge profit margins. In a potential stroke of good timing, massive margins from the much-rumored iWatch could replace the iPhone – even slacking PC sales, one Wall Street analyst forecasts Monday…

Bloomberg quotes Citigroup analyst Oliver Chen who says wristwatch hardware returns a 60 percent gross profit margin – four times the size of televisions.

“Besides brand and retail outlets, another advantage for Apple is its unmatched ability to drive down the price of components such as displays, batteries and circuit boards,” Bloomberg explains.

This meshes nicely with our longheld belief that anyone getting into the highly-commoditized television set business should get their head examined.

The publication wrote:

Apple seeks to introduce the device as soon as this year, this person said. Apple has filed at least 79 patent applications that include the word “wrist,” including one for a device with a flexible screen, powered by kinetic energy.

To accommodate the smaller screen of a watch, Apple could adapt its iOS mobile software to limit what information is sent to a wrist device, said Scott Wilson, a watch designer who developed a line of watchbands for people who wanted to use an iPod nano as a watch.

Bloomberg last month reported that a hundred product designers have been developing a wristwatch-like Apple device that may perform some of the tasks now handled by the iPhone and iPad, adding today:

Features under consideration include letting users make calls, see the identity of incoming callers and check map coordinates, said one of the people, who asked not to be identified because the plans aren’t public.

It would also house a pedometer for counting steps and sensors for monitoring health-related data, such as heart rates, this person said.

In Wall Street’s usual dead-pan way of describing huge numbers, Chen said an Apple watch offers “plenty of opportunity for upside.”

Just how much ‘upside’?

Try $6 billion.

To put that into perspective, if Apple grabbed only 10 percent of the wristwatch market, the company would see $3.6 billion in gross profit. By comparison, 10 percent of the PC market would give Apple just $1.79 billion in gross profit.

Some folks disagree.

Peter Cohen of The Loop, for example:

I wonder whether AAPL price will go up or down on the news that one unannounced product will be more profitable than another unannounced product.

Be that as it may, the numbers seem to throw cold water on some rumors which floated suggesting ‘iWatch’ was really a codename for Apple’s HDTV efforts.

The Verge piggy-backs on the Bloomberg story with its own claims:

We’re also told that Apple’s chosen to rework the full iOS to run on the watch instead of building up the iPod nano’s proprietary touch operating system — although the previous nano was already watch-sized and seemed like a great starting point for a wrist-sized device, Apple’s betting on iOS across product lines.

However, running iOS on such a tiny wearable device poses challenges related to its battery life:

The goal is to last at least 4-5 days between charges, but the current watch prototypes are apparently only going for a couple days max.

We’re also told Apple has some work to do with iOS on the iPhone, which currently has several hooks for supporting a watch-like device but lacks the appropriate interface or settings to make it work properly.

But what seals the “iWatch” scenario for me is reports Apple’s design guru Jony Ive is nuts about wristwatches. Along with owning many expensive watches, his minions have supposedly visited wristwatch factories.

Apple design chief Jony Ive has long had an interest in watches. Besides owning many high-end models himself, he had his team visit watch factories and ordered boxes of a sports watch made by Nike Inc. (NKE) in the mid-2000s, said Wilson, who was then Nike’s creative director.

Can Apple remake the ordinary wristwatch into another high tech consumer “gotta have” product?

Maybe they can strap an iWatch onto an outboard motor, like Timex did ages ago.

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  • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

    It’s hard to think of an Apple product I wouldn’t want, but I think this is it. I really don’t see myself wanting an iWatch.

    • http://twitter.com/Chindavon Chindavon

      You just have to have an even more open mind on this iWatch. This thing will replace the likes of the Nike Fuel band and others like it. What if this watch can monitor your vitals 24/7 and possibly be used like that “help, I’ve fallen and I can’t get up” device for old people? I can also see this being an asset to my elderly parents/grandparents or physically challenged kids. Strap this on them, pair it up to my iPhone, and I can monitor their vitals myself on my iPhone at any time. Other cool potential things: When your iPhone rings, you watch says who’s calling, and you can handle your response by touching the watch.Your music may be on your iPhone or iPod, the sound may come from your Bluetooth headset, but your controller is on your wrist with the iWatch. Your iWatch vouches for you, so you’ll never have to type another passcode or password again. Walk away from your iPhone and your iWatch will warn you. Your NFC chip for making payments is in your watch, instead of in an easily-grabbed $800 phone. Just wave your hand over the sensor and you’re good to go.

      • Malay Mody

        Voted up just for the time it must have taken to type that

      • Guest

        All good points, but a wrist watch just simply isn’t a daily necessity the way a phone is. Also, I just don’t like wearing watches haha…so that’s a person reason why I wouldn’t want one.

      • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

        All good points, but a wrist watch just simply isn’t a daily necessity the way a phone is. Also, I just don’t like wearing watches haha…so that’s a personal reason why I wouldn’t want one.

      • http://twitter.com/Chindavon Chindavon

        I hate wearing watches too, but I just might give it a try.It’s more of a Robin device to go along with your Batman. It won’t replace the true hero, just enough of a companion to help drive you around.

  • http://twitter.com/myorangeisstuck wahaha

    Imagine a jailbreak for it. Oh you can multitask apps, tweet directly from it

    • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

      No, sorry, I can’t really imagine this. These are things I could much more easily do with my iPhone. For starters, I’d have two hands to type, instead of one supporting the iDevice, like the very nature of this proposed “iWatch”.

  • samdchuck

    So the non-existant watch could me more profitable than the non-existant TV. Great I guess.

  • At

    iWatch replacing the iPhone, not gonna happen. If apple made a TV, the hardware profit wouldn’t matter as much as content profit. Especially if apple makes its own shows like Netflix is now doing.

    • q q

      I think if Apple made an iWatch that was able function like the new Fibit Flex or the UP by Jawbone, but included GPS for run tracking with Nike+ for better accuracy than these two it would be an awesome seller. It would be able to track deep & light sleep cycles, and would also connect to your iPhone for alerts/reminders and various apps (both current and new innovative apps made specifically for it). It would be cool to change tracks from it while listening to an album via Bluetooth while driving in my car, or while running using my Bluetooth Jaybird Bluebuds (assuming it would have its own internal storage for that last one). Not even thinking hard, I came up with a few good uses.

      • At

        I’m not saying its not a good idea, this thing will sell like crazy. Saying it will replace the iPhone is a little extreme.

  • Pmcaa TM

    How much do you think it cost?

    • http://twitter.com/Chindavon Chindavon

      I’m betting on $199 best case scenario for us, but I’m sure it will be highly priced at $299.

  • http://twitter.com/Chindavon Chindavon

    There is so much potential to this project that it’s scary what Apple can really do with this. My James Bond tech dreams may come true after all!!

  • http://twitter.com/tkukoc Tony

    Won’t run ios for sure, if the nano didn’t run it then there’s no way this one will either. Plus ios is in need of an update badly! A full overhaul. But I am interested to see what kind of watch they do release.

  • Marvin

    Wristwatch market: which will sell $20 watch VS. $200 iWatch, when you can just get iPhone out of pocket. so 180 bucks just to not get phone out of pocket.

  • benjamin aguilar

    I will buy it if it only has the function of text messages, siri, weather and GPS !

  • Mcsquared

    What if the iWatch is just a normal watch that can only tell the time and date and simply has a white band with an apple logo on…

    PlOt TW1sT!