Piper Jaffray’s Gene Munster this morning reiterates an Overweight rating on shares of Apple (AAPL), and a $900 price target, writing that he expects the company to get into “wearable computers,” perhaps with the introduction of a wristwatch, and that the company may expand its program of licensing peripheral makers to connect all manner of smart devices to its iOS operating system for the iPhone and iPad.
Munster, responding to rumors such as that offered last week by Stephen Schenck of PocketNow, which claimed Apple’s working on a watch with Intel‘s (INTC) help, writes that he’s not sure if such a product would come in 2014 or later.
But Munster does think wearable computers could replace the iPhone at some point:
We believe that longer term (over the next 10+ years), wearable computers could eventually replace the iPhone and smartphones in general. We believe technology could progress to a point where consumers have a tablet plus wearable computers, like watches or glasses, that enable simple things like voice calls, texting, quick searches, navigation, etc. through voice control. Longer term, screens in glasses or projectors could replace the necessity of a screen from a smartphone or tablet. These devices are likely to be cheaper than an iPhone and could ultimately be Apple’s best answer to addressing emerging markets. While the smart watch may be more appealing for men, it is less likely women will embrace the theme given women’s watches tend to be smaller with a greater emphasis on fashion.
At the same time, Apple’s licensing program, called “MFi,” might allow all kinds of objects — “clothing, shoes, belts, earrings, bracelets, hats, etc.”– to “provide incremental information like body temperature, steps taken, calories burned, blood sugar, etc. to the wearer’s main device (which could be an Apple phone/tablet or other smart device).”
That might provide a revenue stream beyond just Apple’s own devices, he thinks.
Apple shares today are up $15.68, or almost 3%, at $547.85.
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