Apple Watch will play a “meaningful” role in Apple’s 2015 bottom line, accounting for 36 percent of the company’s revenue growth for the year, according to Rob Cihra, managing director and tech hardware analyst at advisory firm Evercore Partners. Mr. Cihra’s comments were made Monday in a note to investors, reported by Apple Insider.
Apple has yet to announce specific pricing and timing for Apple Watch, other than an “early 2015” target and starting price of $349. Mr. Cihra expects the watch will launch around March with an average selling price of $500, giving Apple nine months to ship an estimated 18.5 million units in 2015, with an additional 22.9 million in 2016.
Mr. Cihra’s estimated sales figures give Apple Watch a 5 percent attach rate based on the current iPhone install base, a number he views as conservative compared to the highly successful iPad launch, which enjoyed a 20 percent attach rate in 2010.
Apple is still expected to earn the bulk of its revenue — greater than 60 percent — from iPhone sales, and Apple Watch sales will only account for an estimated 4 percent of Apple’s overall revenue on the year. But the product’s margins, coupled with the declining tablet market, have the Apple Watch expected to account for a disproportionately strong percentage of the company’s revenue growth for the calendar year, at 36 percent.
On the basis of this report, Evercore repeated its “buy” recommendation for AAPL, with a price target of $135.