Following in the footsteps of iconic visionary Steve Jobs, there has been immense pressure on Apple's (NASDAQ:AAPL) latest CEO Tim Cook to prove the tech giant can still innovate. While the concerns have been somewhat tempered with the unveiling of the Apple Watch in September, there's still a lingering thought that will persist until the new device proves itself in the market: Will the Apple Watch truly be a hit with consumers?
Cook thinks so. In fact, he has huge expectations for the device.
"We are going to wonder how we ever lived without it,” Cook said in the interview in China last week with Xinhuanet. “That’s the real test of a great product: you wonder how you live without it. And I think that’s going to happen to the Apple Watch."
He told Xinhuanet that he believes the prospect for Apple Watch is "enormous." Paraphrasing Cook, Xinhuanet said that Cook thinks the Apple Watch "is so rich with possibilities that even people from Apple who have been conceptualizing it for three years have not thought of all the possibilities."
Can Apple repeat history?
Given Apple's focused portfolio of a few great products, looking back at the company's most recent product launches sets a very high standard for how a new Apple product should perform in the market.
It was only in 2007 when Apple introduced the iPhone, a device that would serve as the major driver behind the company's revenue growth from about $20 billion annually before its launch to about $50 billion by 2010, when Apple introduced the iPad. Even today, the iPhone accounts for more than half of the company's $183 billion in annual revenue and continues to be Apple's most important driver for growth.
Like the iPhone, the iPad also exceeded all expectations. Today, the iPad accounts for 13% of Apple's revenue, and is just as important to Apple's business as Macs.
Can the Apple Watch live up to Apple's history of new product categories catching on with consumers like wildfire?
Analysts think the Apple Watch will sell, but aren't immediately expecting a blockbuster hit. Analyst estimates for Apple Watch sales in the first year of availability vary wildly, with most estimates somewhere in the ballpark of 10 to 20 million units. While this is a big number, it's still small in comparison to sales of Apple's iPhone. In Apple's holiday fiscal 2015 first-quarter alone, Apple should sell more than 60 million iPhones.
Could analysts be underestimating the Apple Watch?
Given the power of Apple's ecosystem of products and its history of outperforming expectations, it's highly likely that analysts are underestimating the Apple Watch. Maybe Cook is right; maybe we'll eventually look back and wonder how we even lived without wearable technology on our wrists.
Further, considering Apple's fairly conservative valuation today, the addition of a new product to Apple's robust ecosystem -- blockbuster hit or not -- makes the stock look enticing. And if Cook turns out to be right about the Apple Watch's prospects, doubting the new device could prove to be a big mistake.
Daniel Sparks owns shares of 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.