Will the Apple (AAPL) Watch be a success or a debacle? The new game in the investing universe is to predict which way it will go.
Those betting on a huge Apple fail seem to far outnumber those who believe the Watch will become the next big Apple win.
A great deal of this concern is tied to what the new Watches are capable of doing now … and not what they are capable of doing in the future.
A lot of this might have to do with the different ways Tim Cook and Steve Jobs unveiled new products.
One perceptive Wall Street Apple watcher noted a key difference:
• Cook is all about the product here and now.
• Jobs geared his presentations into what the new technology could achieve in five, 10 or even 15 years.
The Apple Watch isn’t really about being able to measure your blood pressure, pulse or respiration. Nor is it about eliminating the need to look at your phone to see who is calling.
Yet, if you watched Cook’s presentation, you might think the first iteration of the Watch is all about how these items work with other Apple devices.
And, of course, how they look.
I can’t help but wonder what forward-thinking Jobs would have had to say about the Apple Watch … and the effect he might have had on next month’s launch.
What Would Jobs Have Done?
I imagine he would think this Watch is the caveman’s version of a product that consumers around the world will one day wear.
So, he would have sold us on his vision, rather than the product itself.
If Apple’s co-founder were here to introduce the company’s new Watches, he most likely would have started with a key prediction …
This first, very basic wrist accessory will be an essential product for billions of people in the next five to 15 years.
He would have us imagine the possibilities with him.
After all, this tiny supercomputer has a big future ahead of it. It is on track to become a voice-responsive, interactive and “virtually” flawless personal assistant.
This “virtual assistant” is also set to serve as the wearer’s guardian, medical monitor and data accumulator.
Imagine a personal computer capable of accessing the totality of human data.
From anywhere in the world, this tiny little device will one day be able to tap into every library … every video … every movie … every book, term paper or comic …
It will also help us to communicate with our cars, appliances and even homes. That’s literally everything connected to the “Internet of Everything.”
Add in access to our medical history … along with real-time updates about our health and well-being …
And the possibility of the Watch being a flop narrows considerably.
Better yet, it will only take a matter of seconds to retrieve anything.
But we likely won’t be tethered to the Watch’s tiny screen.
One day soon, we can use Bluetooth to display our data on an HDTV, 3D monitor or even a holographic projector anywhere.
Classrooms, restaurants, hotels, airports and coffee shops will one day embed paper-thin monitors into tables, walls and chair backs.
So, you can communicate with anyone in the world, from anywhere, with your Apple Watch. (Or one of its many competitors to come.)
Bottom line: Apple is creating and/or inspiring another generation of technology.
A New ‘Face’ for Siri?
Don’t let the still-awkward and clumsy voice applications mislead you. The day may seem far away, but audio commands will eventually become 99.888% accurate.
And this interface will connect you to a seemingly omnipotent personal assistant.
This personal assistant tied to your phone and other computer devices will, in the next 5-15 years, have amazing textured personalities.
Imagine having John Gielgud — the ultimate personification of an English gentleman (the Dudley Moore version of “Arthur”) — looking after you in every imaginable way 24/7!
This amazing revolution in programming, computer speed, optics and capability is what Steve Jobs would be telling people about, in my opinion.
He would explain that within 15 years, as many as 2 billion people will be linked into the Internet of Everything via their wrist.
He would say the communications data that runs in this piece of Apple tech hardware would dramatically improve our lives.
And he would note that it will link roughly 4 billion people by 2050.
That might seem like a long time to wait for profits. If you have a more-immediate need for returns, stocks like Google (GOOGL) and Amazon (AMZN) may be better investments at this point in time.
I won’t argue either way. After all, last week my colleague Geoff Garbacz gave you several reasons why we like Google right now.
My point, however, is this …
Those singing the song that Apple’s Watch is an indication of poorer, less exciting days for shareholders are going to be proven wrong.
I stand with those who believe Apple’s valuation will exceed $2 trillion in the next decade or two.
My advice to investors: When you consider the potential of the Apple Watch, keep in mind the old Atari game machines.
Remember the ‘video computer system’ craze?
Back in the 1970s, Atari’s ping-pong game was caveman programming.
However, it was just the first step toward the proliferation of high-tech, combat-effective training.
Sure, it started out crude. But its programming quickly became incredibly intense, intricate and interactive.
As a longer-term investment, I wouldn’t count Apple out just yet. But here in the short term, five out of six indicators I watch are saying Apple is a “sell.”
That’s on its daily and weekly chart. But on a monthly chart, the signals are still bullish.
That means if Apple sells off (to around the $110-$115 area), it could present a great buying opportunity.
In the meantime, I’ll wait before establishing a position in Apple until the signals turn positive.
However, if there’s a wash-out, I would look to enter or add to Apple positions.
Apple’s style of delivery may have changed from vision to product presentation. But that doesn’t mean the innovative traits of the empire aren’t intact.
Always Watching Your Chickens,
With contributions from Geoff Garbacz, Dan Hassey, Mathew Schilling, Phil Erlanger and Dawn Pennington