iPhone drives revenue now; Apple Pay and Watch lay foundation for future
The iPhone 6, quickly on back order, should satisfy near-term revenue growth needs with a chance for 100mn total iPhones shipped in the second half. The Apple Watch and Apple Pay lay a foundation for the future. Apple Pay may provide less revenue than hoped as it is not disruptive and Apple will not try to monetize transaction data, but it is an important ecosystem builder. The Watch is the hardest to gauge but promising. While the need for an iPhone 5/6 is limiting, we are optimistic on Watch demand.
Focusing on what is unique to Apple Watch
Apple observer Ben Thompson pointed out a question we had as well after the introduction—what is the job to be done? New categories from Apple elegantly solve a problem with the help of a breakthrough in interface technology. The Digital Crown fits into that lineage. But there appear to be almost too many jobs with over 50 applications, some merely extensions of the phone and some new. Apple needs to highlight the jobs unique or advantaged to the Watch, such as