Huberty positions the iWatch as a natural accessory to the millions of iOS devices already being used, rather than a new product category such as the iPhone and iPad once were.
The $17.5 billion estimate assumes an average selling price of $299 and no supply constraints. If supply is constricted that number drops to somewhere between $10 billion and $14 billion.
Huberty notes that Apple's investment in R&D foretell the company's entrance into a new market.
Apple's "guidance for $10.45B of capital expenditures (non-cash and excluding retail stores) for FY14, which Apple just reaffirmed in the latest 10-Q, is up 32% from $7.9B in FY13. We believe this is an indication that Apple is investing in new product categories as single-digit iPhone and iPad growth no longer demands significant increases in capital expenditures," Huberty wrote.
Recent rumors have Apple releasing a new 'Healthbook' app for iOS 8 that monitors one's fitness levels and vitals signs via a link to the iWatch. Also just yesterday, the NEw York Times reported that Apple is experimenting with solar and wireless charging for the iPhone and iWatch.
You can click here to check out a recent iWatch concept from Todd Hamilton that features a Nike Fuelband form factor and UI elements from iOS 7.
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