Don't Be Fooled by iWatch Interest Surveys

Surveys suggest there is significant interest in an iWatch -- but not so much if it's expensive. Here's why investors should take these polls with a grain of salt.

Jul 21, 2014 at 1:30PM

With a long-rumored Apple (NASDAQ:AAPL) iWatch potentially set to arrive in the fall, a recent survey suggested that there may be strong interest in an Apple smart watch – but for most, only if the price is right. Price is something Apple rarely, if ever, competes on, and early movers Samsung and Pebble already have several sub-$200 smart watches on the market. Does this signal trouble ahead for the long-awaited Apple wearable?

Maybe. But more likely, this survey – and similar surveys that came before it – will prove meaningless once the product hits the market.

First, let's take a quick look at what the survey, published by investment firm Piper Jaffray, had to say.

More than $200? Count us out
It found that 14% of watch wearers would consider an iWatch at $350, but 86% would not. Perhaps more interesting, about 41% said they might be interested in an Apple smart watch -- but only if it were under $200.

That's a price point at which it would be hard to imagine Apple trying to compete.

This isn't the first study that showed tepid interest in an Apple wristband device. Last year, ChangeWave Research found that just 5% of consumers considered themselves "very likely" to purchase an iWatch.

But do these surveys really offer investors much insight into the potential iWatch market?

Unlikely, and we only have to look back at surveys taken before the releases of the first iPhone and iPad models to gain some perspective.

Didn't we see this before?
In January 2010, only 4% of respondents in an RBC/ChangeWave study felt that they would be "very likely" to purchase a tablet computer.    

The iPad, of course, went on to crush all sales expectations, and by mid-2012, it had already sold 34 million iPads in the U.S. – units at price points far in excess of the tablets produced by Samsung, Amazon, and other Android-based tablet makers.

That's one iPad per approximately every 7.6 Americans over the age of 14 – or about 13%. And sales at that point were really just starting to ramp up.

So despite only 4% of the population having considered themselves "very likely" to buy, more than three times that number moved quickly to buy one.

And once more, before that?
And if we go back three more years, to a time before Apple's 2007 iPhone launch, just 3% of those polled by RBC/ChangeWave said they were highly interested in buying an iPhone, and just another 6% said they were somewhat interested.

Within five years, Apple had sold roughly 86 million iPhones in the U.S. While many of those were undoubtedly upgrades, that's one iPhone for every three Americans over the age of 14.

In both cases, Apple defied those interest surveys by delivering products that people didn't think they wanted, but soon felt like they couldn't do without. The key to success for the Apple iWatch will be the same. The product not only needs to be better than what's already on the market, it must be different, easy to use, and stylish.

But most of all, it has to allow its users to do things they had not imagined doing with a wristband device ever before. What truly made the iPhone and iPad special was that they expanded the boundaries of their users. They took non-techies and tech-o-phones and turned them into people who treated their handheld like an appendage.

The Foolish bottom line
That's a factor that no pre-launch survey can account for. So, whether results portend good news or bad news, take either with a grain of salt. This will be Apple's first major new product launch of the post-Jobs era. It will be held up on Wall Street as a measure of the company's innovation, and its success will have effects that reach much further that the device's sales.

Investors have a lot riding on the product's launch, and they should be champing at the bit. But don't think you're going to get much insight from any pre-launch consumer surveys.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

John-Erik Koslosky owns Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information