Analyst: Apple’s iWatch Production Kicks Off This Month

Source: iWatch Concept by Todd Hamilton

Is production of Apple’s (NASDAQ:AAPL) long-rumored iWatch about to get underway? According to a new research note from Cantor Fitzgerald analyst Brian White, Apple’s overseas suppliers will begin making parts for the wearable tech device sometime this month in order to have the product ready for a fall launch window around the same time as the iPhone 6. White currently has a “Buy” rating and a $777 price target on Apple shares.

The Cantor Fitzgerald analyst based his prediction on information he gleaned from various supply chain sources he contacted at the ongoing Computex trade show in Taipei, Taiwan. “With the theme around wearable technology at Computex this year, our research has uncovered more data points as it relates to Apple’s ‘iWatch,’” wrote White in a note obtained by Barron’s. “Our meeting with a tech supply chain company highlighted that initial production of certain ‘iWatch’ components is scheduled to begin later this month and there are plans for a sharp acceleration into fall. Given the trajectory of this ramp and our experience analyzing other product ramps at Apple, we expect the ‘iWatch’ to be unveiled with the iPhone 6 in September.”

Like many other industry analysts, White believes that the iWatch will function as a peripheral device to Apple’s iPhone. A new iOS interactive notifications feature and the overall enhanced connectivity between devices that the Cupertino-based company unveiled at its Worldwide Developers Conference appears to support this view of Apple’s expected wearable tech device. For this reason, White believes that it would only make sense for Apple to release the iWatch alongside the next-generation iPhone.

White also predicted that the iWatch would be a relatively cheap accessory for Apple users. “Although our research suggests there will be a price band for the ‘iWatch’ (similar to other Apple products), we estimate the entry-level price could begin at approximately $199-229, making this new device very competitive with other brand-name smartwatches on the market and comfortably affordable for many consumers,” wrote White in a note seen by Barron’s. As recently noted by RBC Capital Markets analysts Amit Daryanani and Mark Sue, Apple could generate an additional $9 billion to $11 billion in revenue during the first year if it sold approximately 50 million units at that price range, reports the Financial Post.

Although some models of the iWatch may be as cheap as $200, there are indications that premium models of the device could be offered at different price ranges. KGI Securities analyst Ming-Chi Kuo predicted that a more expensive iWatch model could be priced at several thousand dollars, according to a research note obtained by 9to5Mac. Kuo’s prediction of an expensive iWatch appeared to be bolstered by a report from the Financial Times that suggested Apple was trying to poach employees from various Swiss luxury watchmakers.

Although Apple has yet to confirm the existence of an iWatch — or any other wrist-worn device — there have been several tantalizing hints that suggest the iPhone maker will soon release a smartwatch. According to MacRumors, Brightflash — a shell company that is likely run by Apple — has pursued the iWatch trademark in dozens of countries around the world.

Finally, besides making a bold prediction about the arrival of the iWatch, White also offered another tidbit on the upcoming iPhone. “Furthermore, as we make our way through Computex, our research is uncovering more evidence that the 5.5-inch iPhone 6 will launch this fall,” wrote White, according to Barron’s. It has been widely reported by several media outlets that Apple’s iPhone 6 would be available in two larger screen sizes of 4.7 inches and 5.5 inches.

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