WSJ: Wearables could replace the iPhone as Apple's most important revenue source

WSJ: Wearables could replace the iPhone as Apple's most important revenue source
The Apple iPhone is Apple's most important device. Think of the phone as a hub, and other Apple products and services as the spokes pushing out from the hub. And while it is hard to imagine, there will come a time when something new becomes Apple's next big thing. A report published yesterday in the Wall Street Journal suggests that wearables will eventually be the most important source of Apple's revenue.

The Apple Watch owned a leading 17% share of the wearables market last quarter according to the latest report from IDC. Over the last four quarters, the Apple Watch and wireless Apple Air Pods took in $10 billion in sales, a small crumb compared to iPhone revenue. Loup Ventures analyst Gene Munster sees Apple selling 10 million AR glasses in just its first 12 months (he now sees the product launching in 2021). He expects Apple to sell the product for $1,300 allowing it to take in $13 billion in revenue over the first year of release.

The WSJ sees a parallel between the Apple Watch and Apple's AR headset. The newspaper says that during its first couple of years, the device dubbed "Apple Glasses" will have limited functionality, and be tethered (not physically) to the iPhone. Eventually, it should become a stand-alone device, just like the cellular version of the Series 3 Apple Watch.

Note that the Journal said that wearables could become Apple's most important source of Apple's revenue. The report didn't say it would be the largest. That's because the wearable sector may not overtake iPhone sales, but it could end up driving more Apple customers to one of the company's subscription services like Apple Music and Apple Video (when it is launched). And that is important for Apple as it tries to meet its goal of hitting $50 billion in services revenue by 2021. Last year, Apple took in $30 billion in services revenue.


If the WSJ is right, wearables could be Apple's next hub with the iPhone reduced to one of the spokes.

source: WSJ

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11 Comments

1. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

How would the watch bring more revenue then the iPhone, with less apps, less capabilities and considering its size. Good luck with this theory. It's never gonna happy do to size and other limitations, like input, hardware capability, app availability and more.

3. Atechguy0

Posts: 918; Member since: Aug 03, 2018

At first is was 2019, then it was pushed to 2020. Now it's 2021 timeframe. You see Apple has to wait for the actual companies to make the tech good enough for Apples liking, so Apple can then use it in their headsets. Because companies like Samsung, LG, and some others are working on displays that will have 1400 dpi or above. Some are even working on 2200 dpi displays.

6. Alan01

Posts: 570; Member since: Mar 21, 2012

No one said that the watch will bring in more revenue. What was said is that wearable revenue could become more important than iPhone revenue depending on how much services revenue is derived from wearables. Regards, Alan

10. Atechguy0

Posts: 918; Member since: Aug 03, 2018

Yeah, that's why other companies are working on 1400dpi all the way up to 2200dpi displays that will be used in glasses, or AR headsets. You think Apple themselves are working on displays? Not resolutions and densities that other companies have already been working on for years. Because those incredibly dense displays can be used for AR, VR and MR devices.

2. cncrim

Posts: 1558; Member since: Aug 15, 2011

Every year device get more screen realstate and watch going opposite way. Every revolutionary profuct need a revolutionary feature, computer need a bitmap display, mouse bring awesome user experience, capicity touch screen make awesome smartphone. So where is the next revolutionary for the smartwatch? Without AI small screen is useless, and AI is far from perfect.

9. Leo_MC

Posts: 6396; Member since: Dec 02, 2011

Holograms maybe. There was a device that projected a display on one's hand, another one projected a keyboard on a desk, so the tech is there and maybe someone will figure out a way to use it in wearables.

4. bucknassty

Posts: 1296; Member since: Mar 24, 2017

I have a feeling they are going to announce those glasses

5. rabramson2443

Posts: 45; Member since: May 12, 2018

I don't feel comfortable walking around town talking into a watch. It looks somewhat stupid. Anyone second that motion?

7. darkkjedii

Posts: 30786; Member since: Feb 05, 2011

You dont have to talk to it, to interact with it. You're really reaching, and I for one don't second that motion.

11. hopper

Posts: 66; Member since: May 08, 2017

airpods will fix it

8. D34ever

Posts: 210; Member since: Jul 14, 2018

Honestly, I don't see this happening. But we'll see.

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