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Apple Watch 2 Will Probably Launch on Wednesday

By Daniel Sparks – Sep 3, 2016 at 5:35PM

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New leaks may preview Apple's next update for its wearable device. Here's what investors need to know about the device's possible launch.

Another product expected to make its debut alongside Apple's (AAPL 2.58%) rumored iPhone 7 at the tech giant's product launch event on Wednesday is the Apple Watch 2. Though a Wednesday unveiling for the device is less certain than the closely followed iPhone, recent purported leaks about a new version of the Apple Watch support the possibility of a launch and provide some hints about what changes the new version may feature.

Apple Watch. Image source: Apple.

Leaks

Little is known about Apple's next version of its Apple Watch. While Apple teased its newest operating system for the device, WatchOS 2, this summer at Apple's Worldwide Developers Conference, the company didn't specify any features that would be unique to its next version of the watch or even say when a new hardware would be unveiled.

In addition, Apple Watch leaks are simply hard to come by, since the device ships in much smaller volumes than the iPhone. This means the company can more easily keep product leaks under wrap.

Of course, Apple's sprawling global supply chain makes it nearly impossible for at least some leaks not to slip. And this is what has happened with Apple Watch 2 just about a week before the device's expected unveiling.

As MacRumors reported on Sept. 1, a British Apple-certified accessory and repair reseller for iOS devices, Byte, recently posted new photos and a video of what looks to be Apple Watch 2 parts. Based on the photos, the device looks as if it will feature thinner display technology and a 35.7% larger battery than the original Apple Watch battery.

Beyond these purported hardware leaks, the Apple rumor pros over at MacRumors expect Apple Watch 2 to include a GPS, a faster processor, and improved water resistance. But changes to the watch's exterior are unlikely, according to MacRumors.

Why a Wednesday unveiling is likely

While the ever-active Apple rumor mill doesn't seem certain that Apple Watch will make its debut on Wednesday, the best reason it could is simply that the device is due for an update.

Apple CEO Tim Cook at an Apple product event. Image source: Apple.

The first version of the Apple Watch was first unveiled in September 2014. Deliveries of the device, however, didn't begin until April last year. This puts Apple at well over a year since its last Apple Watch hardware update -- a long product cycle for a new Apple product. The iPhone, for instance, is consistently refreshed every year; and the company even introduced a new, lower-priced iPhone midway through its annual cycle earlier this year.

The Apple Watch serves an interesting role in Apple's business. Probably accounting for about 2% to 3% of the company's revenue, the device won't do much either way for Apple's overall business. But that doesn't mean investors should forget about the segment. Investors are looking to see whether the company can grow its newest product category to meaningful levels in the same way it did with the iPad, which now represents 11.5% of the company's total revenue. If Apple Watch sales -- or at least a broader wearable segment if Apple chooses to launch more wearable technology in the future -- can grow to around 10% or more of revenue, the new category could both help Apple grow its business and diversify its hardware offerings.

Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on 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.

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