All Eyes on Apple (AAPL) Into 'Spring Forward' Watch Event

All eyes are on Apple (NASDAQ: AAPL) today as CEO Tim Cook is expected to launch the Apple Watch at today's 'Spring Forward' event in San Francisco at 10AM PT (1PM ET). The event will be broadcast live at apple.com/live.

The company is expected to release three models: the Sport, the mid-range Apple Watch and the high-end Edition. The Apple Watch Sport will be the base model starting at $349, Apple Watch is expected to start at $499-$549, while the Apple Watch Edition will start at $4,999. The Apple Watch Sport is expected to make up the majority of sales.

While supply may be initially constrained, analysts on average see around 20 million units being sold this year.

Deutsche Bank analyst Sherri Scribner recently said while she is positive on the Apple Watch the market is not big enough to drive meaningful upside. Assuming an Watch ASP at $350, they estimate revenue from the Watch will be roughly $26B in 2018, which translates to $1.00-$1.50 in EPS accretion. The analyst sees 17.6 million Watch units in 2015.

On the other side of the trade, BofA/Merrill Lynch's Lorraine Hutchinson expects the adoption of the Apple Watch to be faster in the first few years relative to other past new categories like the iPad, iPhone and iPod. Hutchinson sees about 23 million units in 2015, rising to 46 million units in 2016.

Hutchinson sees 6% of the users with iPhones capable of working with the Apple Watch adopt the Watch in 2015 and 9% in 2016 - they call this the 'attach rate'. A bull-case scenario analysis suggests incremental AAPL stock price contribution of $5 by end of 2015 and about $12 by end of 2016 due to the Watch.

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