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Yeah, but does it automatically adjust for the start of Daylight Savings Time?
That’s just one of many things I’m wondering about today, in the wake of Apple’s (AAPL, Weiss Ratings: A+) big watch reveal in San Francisco!
So what did CEO Tim Cook unveil about the Apple Watch a few hours ago?
Apple will offer watches ranging from $349 to as much as $10,000, depending on what functionality, band style, and appearance you’re going for. Materials will run the gamut from aluminum to stainless steel to 18-karat gold and sapphire glass. Pre-orders will start April 10.
For reference sake, Apple’s most expensive product up until now was a high-end Mac Pro computer selling for around $4,000.
You’ll be able to check texts and emails, answer phone calls (via a built in microphone and speakers), track health and fitness information, map your location and more. You’ll also be able to customize the face of your watch, with a photo or just the time or any combination of apps and features.
Battery life was a key issue heading into the presentation, and Apple said users can expect to have about 18 hours of power. That’s clearly less than you get with other wearable devices or smartwatches already on the market.
In addition to the watch news, Apple also helped unveil “HBO Now,” a service that will give consumers access to that cable network’s programs at a cost of $14.99 amonth through their Apple devices. The move underscores how consumers are increasingly accessing content via a whole host of alternative sources beyond their standard cable TV connection.
Finally, Cook talked about the rapid uptake of Apple Pay, a price cut for its Apple TV product to $69 from $99, and the high level of satisfaction with the company’s iPhone product line.
These new product reveals are legendary in the tech world. They generate huge amounts of press, and have done so ever since former CEO Steve Jobs unveiled the original iPod and iPhone.
|The Apple Watch – are you buying?|
But do you really need an Apple Watch on your wrist, especially if you already have an iPhone in your pocket or purse? The demand for other smartwatches from other vendors hasn’t exactly been strong – more on the order of several hundred thousand units sold, rather than several million.
Forbes.com basically called the Apple Watch a “Me Too” product, rather than something revolutionary. One analyst from Pacific Crest, Andy Hargreaves, also wrote: “We cannot think of what Apple Watch does better than iPhone other than collect health/fitness data, which can be achieved with smaller, cheaper and more appropriate purpose-built devices.”
My wife uses a Fitbit band to track distance when she runs or walks, for instance. I use my iPhone and the free “MapMyRide” app when I bike – securely attached to my upper arm via a comfortable sports case. I certainly don’t anticipate adding an Apple Watch to the mix. If the broader consumer audience takes the same view, that could make it hard for the company to hit the 14 million in sales mark this year. That seems to be the general consensus among analysts of what would be deemed a success.
|“Bottom line: Apple has been an absolute juggernaut the last several years.”|
Bottom line: Apple has been an absolute juggernaut the last several years. It is being added to the Dow Industrials. It dominates the consumer tech market now much as its former arch-competitor Microsoft (MSFT, Weiss Ratings: B) dominated the PC market in the 1990s.
But if the Apple Watch flops, it could put a real dent in the company’s momentum. So as sales begin next month, Apple investors would do well to pay close attention to see if momentum is strong out of the gate – and if it can continue to build as the year rolls on!
So what do you think? Is the Apple Watch a “must have” tech accessory? Do you think the features, apps, and other details make it a worthwhile purchase for the relatively hefty price? Or is this a rare miss for the tech giant? What do you expect will happen to Apple shares in the wake of this significant product launch? Let me know at the Money and Markets website when you have a chance!
|Our Readers Speak|
Is the job market really improving? Will that lead to higher interest rates? And what about health care – are we ever going to get the system right? Those were some of the questions you tried to answer on the website over the weekend.
Reader The Skeptic lived up to his name, questioning the jobs data by saying: “The unemployment rate fell yet again, but so did the labor participation rate. Theoretically, the unemployment rate could fall to zero if everyone who is unemployed quits looking for work.”
Reader Bill T. raised another key issue – the quality of jobs, versus the quantity. He said: “I am retired, and so I don’t know much for sure about the employment market. But I have to wonder about the numbers. Are these ‘jobs-created’ numbers full-time jobs, or full-time equivalent jobs?
“My brother works for a big box sporting goods retailer in a growing Montana town. He sees jobs being created in his area, but they are all part-time positions. Full-time positions at his store have been eliminated, due to the Obamacare insurance constraints. Most full-time employees have been converted to part-time, and part-timers have seen their hours cut back drastically. There are now many more people working at his store, but almost all are part-time employees. Could the numbers be misleading us?”
Meanwhile, on the interest rate front, Reader Tommr said we should expect financing costs to continue rising. His take: “Between the stronger-than-expected economic news and the Fed’s increasingly hawkish tone, interest rates are naturally beginning to rise on their own. This is the way it usually happens and the Fed will adjust to the markets, eventually.”
But Reader Troy thinks recent currency market moves will cause the Fed to hold off. His view: “The Fed will find reasons not to raise rates until we see a clear sign that inflation is headed above their 2% target. In a world where many nations are lowering rates or doing their own versions of QE, holding still near zero is enough to send the dollar soaring, which is already hurting imports. Any rate increase would only make the matter worse.
“Since the Fed has two major objectives — to control inflation and stimulate the economy — the Fed will try to counter the dollar’s recent rise. This means they will soon state there will be no rate increase.”
I appreciate the feedback, guys. I believe the Fed will in fact need to start raising rates soon, but will try to counter the impact on the dollar via more verbal intervention. If that doesn’t work, we might end up seeing actual central bank intervention because I don’t believe the Fed wants to see the dollar continue to surge.
Lastly, Reader Sharky91 weighed in on health care by saying we could learn a thing or two from our foreign counterparts. The comments: “I have two Brit friends who work here in the U.S. They don’t understand why we can’t figure out the healthcare issue.
“They like their system in the U.K. (despite what you hear on Fox News). They have a good working model that keeps prices down and satisfaction up and all we have to do is copy it. They’ve even offered to help us fix our system, but we refuse to accept their help. It’s kind of sad, really.”
So what do you think? Is a U.K.-style or Canadian-style health-care system a better option for us? Is the Fed shackled by the dollar, or is it going to raise rates regardless of the greenback’s rise? Any other issues you want to raise? Then head on over to the website and share them with your fellow investors!
|Other Developments of the Day|
The iconic Willis Tower (or Sears Tower, if you’re a traditionalist!) is close to being sold for a record $1.4 billion. The reported buyer: Blackstone Group (BX, Weiss Ratings: B+). American Landmark Properties and a couple of real estate bigwigs previously bought the Chicago property for $840 million in 2004.
One reason I’ve been keen on energy stocks (besides the fact they’re ridiculously cheap after last year’s plunge) is M&A potential. And sure enough, reports say Whiting Petroleum (WLL, Weiss Ratings: C) is putting itself up for sale. The $5.8 billion independent oil and gas producer is the largest player in the Bakken Shale producing region in North Dakota.
While I’m on the subject of M&A in the resources markets, Alcoa (AA, Weiss Ratings: C) just announced plans to buy RTI International Metals (RTI, Weiss Ratings: C+). The $1.5 billion cash and stock deal will boost Alcoa’s exposure to the booming aerospace market, as RTI is a major producer of titanium used in airplane manufacture.
Of course, some firms like Goldman Sachs (GS, Weiss Ratings: A-) continue to make bearish macro calls on oil. The investment bank said it expects prices to sink back toward $40 due to rising inventories. I don’t expect to see that personally. But even if we did retest the recent lows, the upside potential over the next couple of years looks so juicy, that some minor short-term price risk isn’t all that worrisome.
Is internal dissent a problem for ISIS, perhaps one that could prevent the terrorist group from grabbing more territory? That’s what this Washington Post story posts. At the same time, the leading African terrorist group Boko Haram reportedly just pledged its allegiance to the ISIS movement. The Nigerian group could add to ISIS’ reach outside of the Middle East.
What do you think about the increase in M&A? Is it another sign of a bottom in markets like energy and metals? And how about ISIS? Is the group getting stronger or weaker? Let me know your thoughts on those issues and any others in the press at the website.
Until next time,