We know nothing about it, but revenues from Apple's iWatch tipped to double Rolex sales in a year

Nassos Stylianou
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Morgan Stanley analysts think the iWatch will be an instant hit (Source: Getty)

It doesn't even have a release date yet, but revenues from Apple's smartwatch could be twice as high as sales at watch making giant Rolex in its first year.

That is what watchers of the Cupertino-based tech stalwart at investment bank Morgan Stanley believe, as they appear to have full confidence that Apple's attempt to revolutionise yet another industry will get off to a roaring success.

Analysts at Morgan Stanley believe that when released, expected to be at some stage this year, the device dubbed the 'iWatch' could sell between 30m and 60m units in its first year. At a price of $300, which is what Huberty projects, even hitting the lower end of of the estimates would net the company $9bn in sales.

According to data from Forbes, sales at one of the best known luxury watch brands, Rolex, are $4.5bn - while the Financial Times points out that a projected sales income of $9bn would match one of the leading Swiss wristwatch companies, Swatch.

But Morgan Stanley believe that it is not so much about the timepiece, which the predict will include more sensors and better form factor and aesthetics than competing smartwatches currently in the market, but Apple's stature as a brand that will ensure a great first year of sales.

"We view the Apple “halo effect” rather than the current watch market as the more accurate predictor of iWatch sales. We see a range of 30-60m iWatch unit sales in the first 12 months of availability based on historical penetration of past iDevices," finds the study.

How Morgan Stanley sees potential iWatch penetration (Source: Morgan Stanley)

The report notes that investors have historically underestimated how new Apple product lines would perform taking into account only proxy markets and that loyalty to the iPhone brand, with which Apple is so strongly associated, has shot up to 90 per cent in the first quarter of 2014, up almost 20 percentage points from three years ago.

Apple does not release any information about its future plans, keeping tight-lipped about ongoing projects and impending releases, but speculation has been growing about a foray into the watchmaking industry with the production of a new timepiece device for a long time now.

Reports from industry sources that Taiwan's Quanta Computer Inc was set to start mass production of Apple's first smartwatch this month seemed to point towards a launch before the end of this year, while the high profile hire of a senior executive from Swiss luxury watch brand Tag Heuer earlier this month did nothing to quell those rumours.

It is believed that the iWatch will include multiple health and fitness sensors and access to features such as messages and notifications. This could be done through integration with the existing Apple products such as iPhones and iPads via the recently launched HealthKit, a platform for combining the various data from these apps.

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