While some quarters are cautious about just how Apple’s first foray into the wearable technology via the Apple Watch will fare, one analyst says that the Cupertino Firm’s wrist candy will be big when it is unleashed by 2015.
This week, price targets on Apple stocks shares have been raised by several investment firms, including Morgan Stanley. The company joins other firms in hailing Apple; citing notable increase in stock prices as the holiday season ushers in a spike in shopping sprees by consumers and the excitement created by the Fruit Firm’s Apple Watch which may see a Valentine’s Day debut.
Morgan Stanley Analyst Katy Huberty confidently sees the prices of Apple Shares to reach $126 – an $11 dollar increase from her previous target of $115. The Cupertino Firm breached the predicted $115 mark on Thursday as upgrades on Apple’s stocks were made not only by Morgan Stanley but also by Evercore and Piper Jaffray as well.
From Morgan Stanley:
“Our 30M Apple Watch unit estimate in CY15 [Calendar Year 2015] is at the high end of consensus and arguably still conservative. Street estimates run the gamut, with most ranging between 10M and 30M units in the first year. We believe looking at penetration into the Apple installed base yields the most realistic assessment of demand potential of the Watch. Our 30M unit estimate implies 10% penetration into Apple’s 315M iPhone 5 or newer installed base exiting 2014, which is lower than iPad penetration of 14% in its first year but higher than the iPhone at 7%.”
Though analyst Huberty pegged her new target at $126, she added that AAPL stock range could go as high as $150 in a bullish projection by Morgan Stanley. Huberty further added that some investors are deprecating the value and thinking too little of the potential demand for the Apple Watch which is expected to come out by early 2015.
The analyst also believes that the Apple Watch will fly off the shelves, similar to the iPhone and iPad scenarios which users’ have witnessed before. Huberty is expecting at least 10% of those who own Apple Watch compatible iPhones will buy the technological timepiece and that easily converts to about 30 million units in sales already.
Basing her predictions on former Apple launches, like the iPhone debut in June of 2007, where Wall Street expected Apple to sell only 9 million units in its first year when Apple actually shipped 12 million iPhones and the iPad launch in 2010, where sales were predicted to be in the 5 million range but actual sales turned out to be 15 million units – Huberty sees the Apple Watch to easily outdo the 30 million units sales prediction.
Expecting wearable technology to be the “next big thing” in 2015, Huberty and other analysts are confident that Apple and its Apple Watch will again lead the pack and revolutionize how we look at and use the ubiquitous timepiece on our wrists.