When we spoke back on April 21, I told you the new Apple Watch will be one of the major catalysts that will drive its maker to a $1 trillion market cap.
Well, my own watch finally showed up the evening of May 1, and I’ve been testing it out ever since.
After using it for a few days now, I’ve come to believe that this is a truly great product. If anything, my latest Apple Inc. (Nasdaq: AAPL) share-price predictions were too conservative.
But don’t believe me. After all, I’m a big Apple fan and maybe my enthusiasm is getting the better of me.
You can imagine how excited I was when I got an email from Apple telling me my new watch would arrive on Friday, May 1.
When I saw the UPS truck show up at my driveway about 6:30 that evening, I felt like a 5-year-old boy on Christmas morning. The driver handed me the package, got my signature and then said something that caught my “investor’s ear.”
“Lucky you,” he said. “I’ve been delivering these things all day long. We have tons of them lying around, whole pallets of them waiting to be delivered.”
There’s an important lesson in this brief conversation. After 35 years covering Silicon Valley, I know that a powerful anecdote can be as illuminating as reams of data.
And I believe that UPS driver’s story proves Apple has a winner in the making.
Morgan Stanley projects Apple Watch sales of 30 million to 60 million units in the first year. Using an average price of $400, that could mean annual sales of $12 billion to $24 billion.
My own forecast is far more conservative. I originally thought the company would sell about 10 million watches in their first year on the market for roughly $4 billion in sales.
I now believe that sales number will come in closer to 12.5 million.
Make no mistake. The Apple Watch is a great product. Indeed, of all the iDevices I’ve used over the years, this is already my favorite.
CEO Tim Cook was absolutely correct when he called the Apple Watch his company’s most “personal” product.
The watch worked great right out of the box. Syncing to my iPhone was straightforward – and I was off and running.
I first set up my watch face. I decided on the “utility” one so that the date and temperature displayed along with calendar appointments at the bottom of the screen.
It’s all very intuitive. I simply tapped the appointment that was displayed, and my calendar popped up on a new screen, giving me a week’s worth of appointments.
Then I started sending texts. This also was a breeze. Texts come with preloaded responses, but if you hit the word “Reply,” a microphone pops up at the bottom of the screen.
Hit the mic button and you can start dictating your message. I did just that and started reaching out to friends and family. The dictation to Siri went well, and the watch gave me the choice to send my replies either as written messages or voice recordings.
Not only that, but I was able to use my watch to manage the painting crew who arrived at my house Saturday morning. The watch kept me in contact with an offsite supervisor through a series of texts.
This was convenient, because it meant I didn’t have to keep pulling my iPhone out of my pocket.
Another pleasant surprise: The Bluetooth connectivity is strong. That’s crucial because the Apple Watch has to be near your iPhone to work.
I was able to dictate a message to my wife on my watch even though my iPhone was plugged in and charging about 35 feet and one story away.
A Second Chat
I was already very impressed with this wearable device when I had a second chance conversation that told me Apple has a hit on its hand.
While I was showing the watch to my daughter over dinner at a local restaurant, two couples walking past our table saw it and stopped in their tracks.
They were intrigued and asked for a demonstration. Of course, I obliged. I even able to dictate a message in that noisy restaurant, meaning the watch’s voice-recognition capabilities are strong.
All four seemed genuinely impressed and complimented me on the device.
That may seem like an innocuous chat, but here’s why I think it was meaningful.
I’ve been a gadget guy for decades, and nothing like that has ever happened to me before – not even when I was an early adopter of laptop computers and smartphones.
But the best was yet come. See, one of the major reasons why I believe so much in Apple as an investment is the fact that the company doesn’t just sell products.
It’s delivers to its millions of customers an entire “ecosystem” of PCs, mobile devices and other consumer technology that work seamlessly together.
And the watch already fits right in.
When I got home that night, I descended to my home theater and kicked on Apple TV. Sure enough, my new smartwatch discovered the Apple TV, and the remote-control app popped up in the watch’s face.
And there I was – playing, pausing, fast-forwarding and rewinding a movie from the face of my watch.
It gets better. Earlier, I had paused a song on my iPhone when I got out of the car. Sitting in my home theater, I simply tapped the watch’s music icon and a control app popped up.
Next thing I knew, I was using the Apple Watch to control the music on my phone. But to get the full ecosystem, I went a step further.
The iPhone allows you to play music through your Apple TV and, via “mirroring,” see what’s on the phone displays on your TV monitor as well.
I connected my music player to my home hi-fi system and controlled the music from my watch. All in all, it’s a great home entertainment experience.
Phoning It In
There’s also one other feature that’s incredibly useful – you can use your watch as a phone.
While I was writing this note to you, my iPhone rang and the call showed up automatically on my watch. I took the call on the Apple Watch to test it out.
I could hear the caller clearly, and she could hear me just fine. So, the watch really is a great communications device.
This truly is a feature-rich product that works well and integrates seamlessly with other Apple products.
To be fair, the battery life is not great. With the current state of battery technology you simply won’t be able to wear the watch 24/7. I got about eight full hours out of mine, enough for a full workday.
But that’s not unique to this or any other wearable or mobile device. Earlier versions of the iPhone faced the same issue, and at this point I don’t see this hurting watch sales.
Also, I wouldn’t dive into the surf or a pool while wearing an Apple Watch. And I’d take it off before playing racquetball, lacrosse or other high-impact sports.
Other than that, it will be hard – if not impossible – for Samsung, SG or anyone else to beat the Apple Watch’s overall connectivity and ability to function as a wearable minicomputer.
If the iDevice King can keep pumping out more products like this that interconnect with the rest of its ecosystem, then yes – Apple really is on the way to becoming the first $1 trillion market-cap company by this time in 2018.
That would be a roughly 35% rally from here.
Apple is truly a unique stock.
It’s a growth firm that will continue beating the market over the next three years.
And it’s also the tech leader of the moment – and that makes it a foundational play you can count on to create wealth for years to come.
[Editor’s Note: Have you tried out the Apple Watch yet? Are you planning on getting one? What do you think it does for Apple stock? Let us know by posting a comment below.]
- Strategic Tech Investor: How the Apple Watch Led to My Next Big Prediction.
- Strategic Tech Investor: The Next Members of Tech’s “Thousand-Dollar Club.”
- Strategic Tech Investor: Here’s How the Apple Watch Will Create a $4 Billion Market.