SAN FRANCISCO: While Tim Cook has dropped hints that Apple Inc is hard at work on a television to drive the next era of growth, the company's wristwatch-style device, still in development, may prove more profitable.
The global watch industry will generate more than US$60 billion (RM186 billion) in sales in 2013, said Citigroup Inc analyst Oliver Chen.
While that's smaller than the pool of revenue that comes from TVs, gross margins on watches are about 60 per cent, he said. That's four times bigger than for televisions, according to Anand Srinivasan, a Bloomberg Industries analyst.
Apple, with its iconic brand and lucrative retail network, is poised to tap into the growing watch industry.
Headway in the business would help compensate for slowing growth in other areas, such as iPhones and iPods.
Apple's stock has slumped by more than a third since peaking in September on signs of accelerating competition led by Samsung Electronics Co and concern over how quickly chief executive officer Cook is pushing into new products.
"This can be a US$6 billion opportunity for Apple, with plenty of opportunity for upside if they create something totally new like they did with the iPod - something consumers didn't even know they needed," said Chen, who covers luxury- goods retailers.
Apple has a team of about 100 product designers working on a wristwatch-like device that may perform some of the tasks now handled by the iPhone and iPad, sources said last month.
Features under consideration include letting users make calls, see the identity of incoming callers and check map coordinates, said one of the people. It would also house a pedometer for counting steps and sensors for monitoring health-related data, the source said.
Apple seeks to introduce the device as soon as this year, this person said. Apple has filed at least 79 patent applications that include the word "wrist," including one for a device with a flexible screen, powered by kinetic energy.
To accommodate the smaller screen of a watch, Apple could adapt its iOS mobile software to limit what information is sent to a wrist device, said Scott Wilson, a watch designer who developed a line of watchbands for people who wanted to use an iPod nano as a watch.
"There's no doubt the wrist is a valuable piece of convenient, glanceable real estate for viewing essential information," Wilson said. "It'd be great to see information like, 'Where are we meeting for lunch?'" Bloomberg