14 DAY TRIAL // Timothy Arcuri, an analyst with Cowen & Co., speculates that Apple could use health insurance companies to subsidize the rumored iWatch much in the same way it does with its iPhone and wireless carriers. The prediction comes amid rumors that the price of the wrist-worn device could run in the thousands of dollars.
Last week, a prominent analyst from investment bank KGI securities warned that the rumored wearable iWatch could actually cost far more than anyone ever thought, but now another analyst, from Cowen & Co., provides a potential solution that could help Apple sell as many as 18 million units in 2015.
Timothy Arcuri predicts that Apple could be looking into signing deals with health insurance companies to help bring down the cost of the smart-watch. Although the manufacturing costs could still force Apple to price the device relatively high, Arcuri holds that the Cupertino giant could sell it subsidized for around $250 (€180).
“We continue to believe it is possible the product (iWatch) is backstopped by some sort of insurance subsidization model similar to the carrier subsidization model for iPhone,” he writes.
He reportedly argued in his research note that “if people wearing an Apple iWatch are more cognizant of steps taken, calories burned, blood pressure, heart rate and other biometric data, they will lead healthier lives and have less need for medical care.”
According to Investors.com, Arcuri expects the product to launch in September, in time for the holiday shopping season. This information comes from his talks with “companies in the supply chain,” according to the publication.
“We continue to feel this product will differentiate itself with existing wearable products primarily from a health perspective with a number of key innovations including noninvasive blood cell count and blood pressure and other more pedestrian features like heart rate,” Arcuri said.
He also cautioned that the wearables market is “nascent and fraught with demand uncertainty.”
Apple reportedly wants to build between 5 and 10 million units of these devices each quarter, and is planning to ship a total of 18 million units in 2015.
In a report published to our Editorials section, we speculate that Angela Ahrendts, the CEO of Burberry who is set to become Apple’s retail chief, has been hired specifically to pitch the fashionable side of the iWatch to this undecided customer base that Arcuri mentions.
Apple apparently knows it needs someone with a great deal of experience in selling luxury items to help spur sales of the iWatch, though we stress that this is mere speculation on our end.