How big is Apple, Inc.'s (NASDAQ:AAPL) commitment to wearable computing? Apparently not big enough to keep the company from chasing Beats Music rather than category killer Fitbit. Fool contributor Tim Beyers explains why that's a mistake in the following video.
According to new data from Canalys, Fitbit accounted for roughly half of the 2.7 million wearable bands shipped in the first quarter. Nike's (NYSE: NKE) own entry -- the FuelBand -- is facing cancellation as a result of Fitbit's ascent.
Tim says further gains are likely. IDC expects shipments of wearable computing devices to triple to 19 million this year and then expand to nearly 112 million in 2018. Now compare that with the streaming music business. The International Federation of the Phonographic Industry (IFPI) says revenue from services such as Spotify and Beats Music grew 51% last year to surpass $1 billion. In bidding on Beats, Apple would be chasing a lower-growth opportunity.
There's also Apple's earlier bets on fashion talent to consider. Adding Paul Deneve from Yves Saint Laurent and Angela Ahrendts from Burberry signaled an intent to build a new portfolio of wearable products. Why not bolster the effort with acquisitions? Perhaps Apple is already too far along in developing the iWatch to make a deal for Fitbit work.
Either way, we should know more soon. CEO Tim Cook kicks off Apple's annual Worldwide Developers Conference with a June 2 keynote at San Francisco's Moscone Center.
Now it's your turn to weigh in. Do you think Apple's making a mistake by overlooking Fitbit? Please watch the video to get the full story and then leave a comment to let us know your take.
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Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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