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The Apple Watch could be a $32 billion business this year

tim cook apple apple watch keynote
Tim Cook announcing the Apple Watch Apple

The Apple Watch could be a giant business for Apple from day one.

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After surveying 2,229 Apple users, Credit Suisse analyst Kulbinder Garcha says 10% of iPhone owners have indicated an interest in buying the Apple Watch.

That suggests Apple Watch sales of 40 million units in the first calendar year the product is on the market. Garcha's survey also suggests an average selling price north of $800 for the watch. 

If Garcha's survey numbers are right, then the Apple Watch could be a $32 billion business in year one. That's good for ~14% of Apple's total revenue in 2015. 

For some context, that would make the Apple Watch a bigger business than all of Facebook, which is expected to generate $17 billion in revenue this yearThe Apple Watch would be roughly half the size of Google, which is expected to do $65 billion in revenue this year

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Before people get too excited about the watch business, we should note Garcha's official estimate for Apple Watch sales is 20-30 million units at a $500 average selling price. After conducting his survey, he thinks his estimate is conservative. 

Garcha's indecision about watch estimates reflects a broader trend. Analyst estimates are all over the map, with a range of 7.5 million to 31 million units. That means 40 million is one the most optimistic estimates.

At the same time, Reuters polled iPhone owners and found that 40% of them were interested in the Apple Watch. So, really, it's a wildcard.

The reason estimates are all over the map is that this is a new product category for Apple. It's unclear who will want the watch, or what it will do. There will be an initial batch of sales to people that love Apple products, and are curious about the watch. After that, it will live or die by its utility. 

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Another wrinkle in figuring out watch sales: Apple is likely to have production problems early on since this is a brand new product. 

Apple Watch
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