How Apple’s iWatch Can Be a Moneymaker

Apple is working on a smart wristwatch, a product that many companies have already failed to successfully find a place for in the market.  Casio, Seiko, Microsoft, and Sony have all tried to sell similar products, but they have found little to no success.  Apple has assigned a team of about 100 people to work on the project with hopes of introducing it in the fall.  A person familiar with the plans claims that the watch will allow users to make and receive calls, as well as check map coordinates.

Since September, Apple’s stock has fallen by more than a third because of slowing iPhone sales and increased competition in the market, especially from Samsung Electronics.  This new gadget has the potential to post gross margins around 60 percent, similar to the iPhone, Apple’s most profitable product.  Apple has shown that it can develop new markets and establish itself within those markets, so the development of a smart wristwatch does have promise.

Written by: Constantine Kostikas

Source: Bloomberg Businessweek