Apple Watch faces stiff competition this year
The Apple of your eye: Outlook good for Apple earnings report (Part 9 of 12)
Apple faces tough competition in wearable devices market this year
When Apple (AAPL) announces its fiscal 1Q15 earnings on January 27, we’ll see a different reporting structure from what we’re used to. Apple has changed things to better reflect its products. It will continue to report the iPhone, iPad, and Mac as separate product segments. It will also have a new segment, Services. This will include sales from iTunes, the App Store, and Apple Pay. The Others segment will include iPod and Apple Watch. By combining Apple Watch with iPod, Apple is giving the impression that it might not have high hopes for Apple Watch .
We expect the company to launch its Apple Watch by March of this year. However, Apple may need to brace for stiff competition in this market. Microsoft (MSFT) recently launched a fitness device, Microsoft Band, and an accompanying app, Microsoft Health, to analyze data from the band and give health-related tips to consumers. Microsoft Band will cost only $199 versus $349 for Apple Watch.
Google (GOOG)(GOOGL), on the other hand, introduced the Android Wear operating system, or OS, during the 2014 I/O developer conference in San Francisco. The OS is specifically designed for smartwatches and other wearable devices. A few months ago, Google announced that it had teamed up with Asus, LG, Motorola, Samsung, and Sony (SNE) to launch new Android Wear devices.
Prospects look good for wearable devices market
The prospects for the wearable devices market are great, particularly as the smartphone and tablet markets reach saturation levels. According to a report from the IDC (International Data Corporation), and as the chart above shows, the wearable device market will have more than tripled to 19 million units sold in 2014. And, it stands to grow to 112 million units sold by 2018 at a compound annual growth rate of 78%.
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