Apple's new stuff

They announced an Apple Watch -- in addition to the two new phones.

Looks like a niche product to me. But I thought that about the iPad and how many gazillion tablets later are we?

I always tend to underestimate Apple. So take this with that fact in mind. ... iPad sales have declined two quarters in a row. The new phone with the bigger screen has a landscape mode and a big enough screen that it may cannibalize what is left in new tablet sales. Which in the short-term will be good for profits, because they sell their phones at higher margins. But in the long-term, tablets have been accounting for a decent amount of revenue, and they need to replace that revenue, and also grow, if tablet sales continue to drop off.

So so far they have the new phones, which look nifty, and they will probably sell a lot of them. There are millions of people with phones that are more than two years old out there, and Apple will get a good chunk of that business.

They have a new payment system that I think is a crap shoot. I think they are going to realize how difficult it is to make inroads in that business. They made it seem like it is so hard to pay with a credit card --the actual piece of plastic -- and that you need a phone to do it more easily somehow. Is that really the case? Because I don't see it. And if not, are they really going to be able to get people to adopt a new payment method that they want to be a significant player in?

The watch -- well, it isn't a must have thing. At least for me. Oh yeah, and you need an iPhone for your watch to function properly, which cements it being a niche.

I am a bit underwhelmed right now. The products look beautiful, which you expect from Apple, but to remain Apple, they need to drive new product categories and product cycles that keep them dominating the world. They may stay on top, but looking out into the future, is this a mix of products that is going to drive growth?

 

Yeah. ... The more I see of this, I think this watch is Tim Cook's Newton. I am not getting it or why anyone would need one.

 

Yeah. But they only account for about 1 percent of revenue at this point. iPhones are more than 50 percent. iPads about 15 percent, but it has been dropping.

 

Just announced that the watch is going to start at $349. ... and to use it, you need an iPhone, too. And it won't be out until 2015, so no Christmas sales this year.

To me, this was a miss by Apple. There were in a tough spot, though. If they didn't announce it, the markets would have been disappointed -- expectations were already built in. So they announced something that isn't ready and that they are going to have to really convince people they need.