14 DAY TRIAL // “I don't think the watch form factor will define wearables in the same way that the smartphone defines the mobile market.” This remark alone single-handedly shaved 1.20% off Apple's stock price in afternoon trading on Friday, after the media sensationalized a claim made by venture capitalist Fred Wilson of Union Square Venture.
This is a good example of who dictates how money is invested in Apple, and Apple products implicitly. Because even the customer, who reads the news, is influenced by these claims.
Investors listen to other investors
Jotting down the usual projections that venture capitalists are best at, Wilson had stated in a blog post on avc.com that “Another market where the reality will not live up to the hype is wearables.”
He elaborated, saying, “The Apple Watch will not be the homerun product that iPod, iPhone, and iPad have been. Not everyone will want to wear a computer on their wrist. Eventually, this market will be realized as the personal mesh/personal cloud, but the focus on wearables will be a bit of a headfake and take up a lot of time, energy, and money in 2015 with not a lot of results.”
Note that Wilson strictly talked about 2015, carefully reserving his long-term forecasts for after the debut of Apple’s tantalizing wearable computer. The guy has approximately 370K followers on Twitter, has his own Wikipedia profile, and is generally well thought of. Which is why the media listens carefully to what he has to say, even if it's with the purpose of twisting his words for traffic.
Which is exactly what a bunch of finance news sites did last week, to his dismay. Luckily for Apple, investors don’t regularly buy into clickbait. The regular folk, however, is a different animal. Especially when one news outlet cites the other, and the thing snowballs, reaching the tech blogosphere.
Customers listen to the media
By the time Wilson could clarify that the media had taken his words out of context, news had already broken that AAPL was trading lower by 1.20% to $109.06 (€91.38) after Fred Wilson of Union Square Venture said in the aforementioned weekend reading that Apple’s upcoming wearable “will not be the homerun product that iPod, iPhone, and iPad have been.”
Business news site TheStreet went and added that, “Wilson thinks the wearable market in general will be a disappointment this year, saying that not everyone will want to wear a computer on their wrist.” In reality, Wilson had only suggested that the start would be rough. After all, the Apple Watch will be the first true wrist-worn computer. And whoever regards it as a watch needs to leave their cave more often.
Various tech sites then picked up the claim, too lazy to look into Wilson’s original post and the subsequent clarifications on Twitter, and basically just pronounced the Apple Watch dead on arrival.
Do your own judgment
Non-investor folks have the moral responsibility to take these claims with a boulder-sized grain of salt. For one thing, analysts are wrong on a regular basis. Secondly, the media doesn’t need permission to quote their research notes, so long as those notes have already been made public. Which basically means you’re reading their own opinion, which can be more-or-less bent or biased, depending on the source of your choice.
The wait-and-see approach is always the best way to go when there’s virtually no real evidence that something will prevail or crumble. Keep in mind that Apple products are not just gadgets. They’re fashion statements, and they tend to work more fluently than competing products. Just ask former Microsoft CEO Steve Ballmer how his iPhone predictions went. Plus, some people just won't admit they crave Apple gear, just to save face. But they still end up buying one somehow.