I used to be puzzled about Apple's stock price but then I notice that it really tracks revenue and the product cycle, that is, it really is earnings driven, and it is volatile because the earnings are volatile.
I realize this is unpleasant, but I firmly believe it needs to be said: there is an element of volatility inherent in the firm at least until it goes through a major product launch without Steve Jobs.
Is the watch major enough? If so, we'll see pretty soon. Personally, I'm not optimistic, although I don't know that Steve would have made any difference.
Thinking about the watch recently: If it doesn't become the new iPhone or iPad, it's not the end of Apple. They'll still sell in the 7-8 digits, with a profit margin upwards of 25%.
I don't know if it will be successful, but they've got a few things in their corner: Talent they've brought in to work on it from the fashion industry, Apple's brand name and marketing, economies of scale, their app ecosystem. I personally think that the current offering of smartwatches available is fairly underwhelming. Maybe Pebble and the rest have just been whetting everyone's appetite for watches that have better all-around execution? (Hardware, design, integration, etc.)
I agree that Apple could withstand the watch being a total flop (for Apple) without any real trouble, and they'll probably outsell other smartwatches by a comfortable margin. But I have a really hard time imagining it reaching anything like the same scale as, for example, the iPad, or staying sustainable over the long term. Apple is good at taking market segments where there's demand for a good product, and existing products are lacking, and finally getting it right. I just don't see that demand for a watch.
I think so, but it's hard to accurately remember that sort of thing in hindsight. I definitely remember thinking tablets in general were cool, and hoping Apple would finally make one worth using. I find smartwatches profoundly uncool and can't see regular people buying them, although I certainly could be wrong.
