Apple Stock News: Apple Watch Is Expected To Contribute 36% Of Revenue Growth

Evercore analyst Rob Cihra said in a note to investors that he believe the Apple Watch will be made available for sale in March and will achieve an average selling price of $500. He believes that the product will be a meaningful addition to the company’s bottom line for the remaining nine months of the year, adding 4% to Apple’s calendar 2015 revenue and accounting for 36% of its growth.

apple stock newsCihra notes that two of the biggest hurdles that smartwatches face are their small usable size and their questionable fashion style, and that he believes this is exactly where Apple thrives. The company has a  proven ability to develop intuitive software user interfaces and design tech products that are as fashionable as they are functional. Most analyses of smartwatches have not considered this fashion intangible, which could be the most important factor in ultimate adaption. If any company can make smartwatches cool, it would be Apple.

In the note, Cihra says that he continues to forecast initial shipments of the Apple Watch totaling 18.5 million units in calendar 2015 and 22.9 million in calendar 2016 which equates to a 5% attach rate to Apple’s iPhone installed base. This is a conservative estimate, with upside to a 10% attachment rate. A March launch date is assumed, although Apple has not committed to one yet, and a starting price of $349. The average selling price of $500 is modeled from a blended average selling price assuming their will be more expensive mainstream models, including the niche high-end 18k-gold models likely priced in the thousands..

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