Unless you’ve been hiding under the sofa over the past week, it’s been impossible to miss the hard launch of the new smartwatch from Apple (AAPL). It was discussed nearly non-stop on CNBC. Full-page ads are being plastered on the New York Times homepage. And every tech website I visit has their review of the Apple Watch prominently featured.
You already know the story: It’s the first major product debut since Steve Jobs died, it’s supposed to usher in a new era of technology wearables, and it’s a key test of whether chief executive Tim Cook can maintain the production innovation magic of his predecessor.
|The Apple Watch is the first major product debut since Steve Jobs died.|
The early verdict is mixed. The product is kind of homely and balky, and does not seem to capture the panache that designer Jonathan Ive was going for when he bragged that luxury Swiss watchmakers should be on notice. Moving the ability to communicate to our wrists is useful — but slow app-loading times, finicky watch-turn-on sensors and a small screen inhibit the experience.
And, of course, the question of whether a $350 to $750 product with an unproven coolness factor is useful enough to keep your smartphone in your pocket remains unanswered. While online orders have already started, and you can view the watch in stores, deliveries have been delayed to June.
Traders are focusing on the positives, pushing shares up and out of a three-month consolidation range. A quick surge to late February’s record high of $133.60 looks likely should the positive vibe continue.
Credit Suisse analyst Michael Nemeroff notes that once online orders started on April 10, the lead time quickly blew out into the summer months, “possibly demonstrating strong demand, short supply, or more than likely a combination of both.” Maybe they are using the extra time to fix the slowness of the apps. A memo from Apple’s retail chief to employees was leaked, telling them to instruct would-be watch buyers to order one online, as in-store supplies will remain very limited.
This slow rollout could be just the thing to generate interest in those on the fence. After all, there is little that tugs at the human psyche like the idea that you can’t have something — even if you don’t need it.
As for earnings, checks by RBC analyst Amit Daryanani suggest that demand for the iPhone (which remains Apple’s most important product line) remained strong throughout the first quarter, setting the stage for numbers above the high end of management guidance. He is looking for shares to hit a price target of $142, with an upside forecast of $155.
I’m not a fan of the watch or the iPhone, as both are bogged down by grossly inadequate software, and the stock is a lot less cheap than it was a year ago. Basically, Apple has reached middle age and is simply not very exciting anymore. We’ll know later this week if Apple’s claim to wrist estate is worthwhile. As they say in Spanglish, “Te watcho.”