Can Apple Deliver on the Apple Watch Hype?

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By Jacob Maslow

Apple Watch Luxury EditionNow that Apple (NASDAQ:AAPL) has unveiled the Apple Watch, and Tim Cook has revealed more details regarding this supposed game changer, more and more Apple watchers and market analysts are having second thoughts. It follows logic that even if the Apple Watch is a breakaway success, in the most optimistic scenarios, the Apple Watch would only contribute less than 10% to Apple’s bottom line.

That is a very shocking revelation. Why? It just brings home the point that Apple is so dependent on the iPhone. It is really a one-trick pony at this point in time. In view of this context, it is understandable why Apple boosters and shareholders who bought Apple stock near the top are drumming up all sorts of hype regarding Apple revolutionizing the automotive space. Apple might very well do that, but as it stands right now, that looks quite remote.

If you’re looking to buy into Apple thinking that it’s going to be a trillion-dollar company or even $1.2 trillion company, let me break this down to you: The Apple Watch is not going to be the device that will make it happen. Even its adoption prospects are quite unclear. Keep in mind that whenever Apple rolls out first-generation devices, whether they be iPods, iPads, or iPhones, they don’t have a fully developed set of features. Right now, Apple is still groping in the dark as to what to put into the Apple Watch. There is no shortage of willing Guinea pigs, but if you are looking for the full commercialization and the full mass consumer realization of the value, if any, this device brings to the table, it’s probably a good idea to wait for Apple Watch Version 2 or even Version 3.

With all that said, all this hype and excited talk about Apple are simply another reflection of the fact that a lot of hedge funds and institutional investors stocked up on Apple stock, and they have a vested interest in pushing its stock price higher and higher. Unfortunately, they seem to be grasping at straws if they think Apple watch will put them over the top.

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