Would you buy a wrist-mounted iPhone? I wouldn’t, but Apple’s new invention might fill the wearable device gap — and boost AAPL shares, too.
Even if you don’t own Apple shares and don’t care what the company invents, there’s no denying its influence on the stock market. No other brand can change the entire landscape like Apple did with the iPhone. That’s why I always keep one eye on this stock.
Apple investors and customers have been waiting a long time for a wearable device. I wrote about Samsung’s Galaxy Gear last October, just weeks after Apple launched the (non-wearable) iPhone 5C and 5S models. Then in April, I showed you my Pebble smart watch.
We now know that Apple hasn’t been just sitting on its hands. They filed a patent in 2011 for a device called “iTime.” The U.S. Patent & Trademark Office just published the filing this week.
Perhaps not coincidentally, Apple CEO Tim Cook hinted in yesterday’s quarterly analyst call that the company has an “incredible pipeline” of products that he “can’t wait to show you.”
Of course, Cook is waiting to show us what’s in the pipeline. Another executive on the conference call said it would be a “very busy fall.” They seemed confident, so I think we can expect multiple product launches before year-end.
One of them may be iTime.
You can read the iTime patent filing for yourself at the USPTO site. Apple’s lawyers and engineers phrased it very carefully to avoid revealing too much information. Here is what they wish the patent to protect.
“An electronic wristband to be worn on a wrist of a user, the electronic wristband comprising: a central portion having a receptacle area configured to receive and electrically connect to a mobile electronic device, the mobile electronic device including a display and being independently useable apart from the electronic wristband to perform a first set of functions; and at least one band portion coupled to the central portion and suitable to assist with securing the electronic wristband to the wrist of the user, the at least one band portion including a wireless communication transceiver provided internal to the at least one band portion and operatively connected to the mobile electronic device when the mobile electronic device is received in the receptacle area, wherein the mobile electronic device, when received in the receptacle area, is operable to perform a second set of functions, the second set of functions including all of the first set of functions and further including wirelessly communicating user input received by the mobile electronic device to a second electronic device via the wireless communication transceiver.”
Got that? I bet it was the longest sentence you’ve read all year. Fortunately, Business Insider has an English translation.
[T]he iTime patent — filed to the USPTO in 2011 but published on Tuesday — describes a wrist device that can connect with other Apple portables like iPhones and iPads. But while many are expecting a smart watch, much of this patent describes an advanced wristband system, where a “central electronic device” is “removably secured” to the wrist strap …
According to the patent, the watch’s straps would contain most of the sensors and other circuitry needed to bolster performance of the device, including accelerometers, WiFi and cellular packages, GPS modules, and haptic feedback mechanisms. But the wristband would also be able to interact with what Apple describes as a “personal wireless environment,” which allows the device to exchange information with nearby cellular- or internet-connected devices like iDevices and Mac computers.
So, it looks like Apple envisions more than a smart watch. The watchband will be smart, too.
This makes sense. Maybe you’ll wear the iTime band on your wrist all the time so it can monitor your pulse, activity level, sleep and other health indicators. It will communicate wirelessly with the iPhone in your pocket or across the room and vibrate to tell you that something needs attention.
This diagram from the patent filing shows what it may look like.
The square watch face portion (114 in the drawing) would separate from the band, either to save weight or let you insert another device with different functions. The watchband would function independently. Maybe it would keep collecting information or giving you alerts while you exercise or swim, for instance.
Apple could go many different directions with iTime. The filing could also be a “head fake” to throw competitors off the trail. It’s worth noting that two of the Apple engineers named in the 2011 filing now work at Google (GOOGL).
Whether it is iTime or something else, Apple clearly has big plans for the rest of 2014. Their third-quarter revenue projection was lighter than expected in yesterday’s quarterly report.
That probably means the iPhone 6, iTime and/or whatever else they intend to launch won’t be out until October or late September. They think the initial sales will happen in the fourth quarter.
What about Apple stock? It rose again today, marking another 52-week high and ending about 3% below the all-time high. Tim Cook and his team are setting up enormous expectations — so shareholders had better hope they are right.
If you bought Apple on my Aug. 15, 2013, recommendation, your open gain counting dividends is now about 40%. We had some dips but holding on has paid off. My indicators tell me Apple is very close to full value, so I may suggest you take profits soon.
(Incidentally, I’ve been working behind the scenes on a “Mastermind” project that will teach you how to know a company’s real valuation. That’s the first step to profitable stock investing. Stay tuned for more.)
What do you think about iTime? Is Apple stock a buy or a sell? What other mysterious products is Tim Cook hiding? Click here to send me your comments.
Apple helped boost the S&P 500 index to a new record today. Here are some other highlights…
- Microsoft (MSFT) didn’t move much today, despite some good signs in Tuesday’s earnings report. Enterprise software is still selling well and ad sales climbed 40% on the company’s Bing search engine.
- Biotechnology stocks picked up some momentum today, helping the Nasdaq Composite outpace the Dow Jones Industrial Average and S&P 500.
- Boeing (BA) weighed on the Dow, pushing the blue chip benchmark down to a small loss while other benchmarks rose.
- The plane maker reported good numbers this morning, but warned of cost overruns in a big military tanker contract.
- Geopolitical worries seem to have receded for the moment. European leaders are discussing new sanctions against Russia, but appear deeply divided on specifics. Eastern Ukraine remains a war zone.
- After the close, Facebook (FB) reported $2.91 billion in quarterly revenues and 30 cents per-share profits. Both beat Wall Street forecasts, suggesting that analyst underestimate the social media advertising market at their peril.