Apple (AAPL) Watch $15-$60 Billion Revenue Opportunity - Deutsche Bank
Deutsche Bank maintained a Buy rating on Apple (NASDAQ: AAPL) with a price target of $105. Analyst Sherri Scribner thinks Apple's iPhone and Apply Pay were in line with expectations. Regarding the Apple Watch, she said it could be a $15-$60 billion revenue opportunity.
"As has been widely anticipated, today AAPL unveiled two larger iPhones, mobile payments, and a wearable product called "Apple Watch." While we felt iPhone and Apple Pay were largely in line with expectations, the features on the Apple Watch were better than we had anticipated. Driven by the unique features and software, we believe the Watch could be a significant new category for AAPL, with a potential revenue opportunity of $15-$60B. While we expect shares to be somewhat range bound now that the products have been announced, we see upside to estimates in FY-15 as new products ramp and we maintain our Buy," said Scribner.
"The most buzz at the event was around the Apple Watch. The physical design of the Watch was impressively beautiful, and it’s clearly positioned as a status object. But the more revolutionary aspect of the Watch in our view was the interface, which is specifically tailored to a small device. The product will not be available until early 2015, and we expect acceptance to be gradual after the initial rush. But assuming a 50% attach rate to iPhones, we see a $30B revenue and $1.50 EPS opportunity, which is not reflected in current estimates," she added.
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Shares of Apple closed at $97.99 yesterday.