Bernstein: How to sell 10 times more Apple Watches

Lower prices, increase font sizes, put heath apps forward and market them to aging boomers.

From a note to clients by analyst Toni Sacconaghi snagged by StreetInsider:

Bernstein analyst Toni Sacconaghi reiterated a Market Perform rating and $285.00 price target on Apple (NASDAQ: AAPL) on the belief that the Apple watch market opportunity could be 10x larger than it is today if the company begins to offer reduced but focused functionality at a lower price point.

He stated “We see an opportunity for Apple to offer a less expensive (say <$250), more focused, and easier to use/read (esp. for seniors) wearable that would be positioned as an essential health monitoring device, which could warn consumers about potential health issues (e.g., a hard fall, serious cardiovascular or circulatory issues, blood sugar levels, or maybe even coronavirus). We believe such a market could be huge (500M for continuous monitoring candidates, and potentially billions who might want to better track their health/key vitals)”.

Maintains Market Perform rating and $285 price target. 

My take: As I write this, Apple is trading for $325. Just saying.

12 Comments

  1. Miguel Ancira said:
    I remember around 2006 when I started following AAPL and would see Tony commenting on Seeking Alpha and other sites. What is his obsession with negativity and getting the stock wrong? I don’t understand his motivation.

    3
    June 3, 2020
  2. Mordechai Beizer said:
    No respect for Toni Sacconaghi. Firstly, Apple already offers a watch at $199. But it’s not the price of the watch, especially when you consider the cost of a Medical Alert system which costs hundreds of dollars per year. The problem is that the watch is not enough by itself, you have to include easy setup/connectivity to an alert service which is challenging for many seniors. That, plus some simple Siri-enabled apps, i.e. take your pill reminders, entertainment remotes, simple audio book app, call my… would make it a must have for seniors.

    0
    June 3, 2020
    • Alan Birnbaum said:
      A quick search of the internet shows these are the most popular systems:
      Medical Guardian
      Bay Alarm
      Philips Lifeline
      GreatCall lively
      Lifefone
      Lifestation
      etc…
      It would be interesting if Apple would facilitate the signup when buying Apple watch & classes specific to this demographic

      1
      June 3, 2020
  3. David Emery said:
    I’m still not interested in wearing a watch, digital or otherwise. The health monitoring aspects are not yet persuasive, but relevant to me as a Boomer.

    But until Toni acknowledges just how wrong his price targets have been over the last decade, I’m not interested in his prognostications, because they’re NOT BACKED UP BY ACTUAL PERFORMANCE and real data.

    So, to quote Bill the Cat: “Bbbffffffftttttttttttt!”

    2
    June 3, 2020
  4. Kenny Kruger said:
    April 26, 2016 Bearstein in NY times: “There’s no question that Apple’s best days are behind it,” said Toni Sacconaghi, an analyst at the Bernstein brokerage firm. “The company grew at astronomical rates, and it’s now so big that its ability to grow at those rates doesn’t exist anymore.”
    April 16 2016, AAPL =$104

    12
    June 3, 2020
  5. Jerry Doyle said:
    “… Lower prices, increase font sizes, put heath apps forward and market them to aging boomers.”

    Poppycock! I am an aging boomer. I want a stylish and classy smartwatch that blends with all age groups in society because I am a 73 year young man who does not want an Apple Watch identifying me as one of those elderly folk with an emergency pendant hanging around their necks should they fall and need help.

    Toni Sacconaghi has lost it. The appeal of the Apple Watch must be to ALL generations, not to old codgers wearing Depends and falling to the floors.

    Sacconaghi has no understanding of Apple. I have come to the realization that Sacconaghi’s understanding of Apple is that of a man who doesn’t know the difference between his assssss and a hole-in-the-ground. I apologize if my language offends anyone, but this guy has no business advising anyone on Apple products and services. Why, oh why does CNBC use him as an Apple sage????

    8
    June 3, 2020
    • Aaron Belich said:
      Well said Jerry. He’s still trying to chase units sold of device X and doesn’t understand the ecosystem of all of the devices. It’s the premium you get by setting your foot in the door and slowly coming to the realization that everything else just freaking works.

      Toni is still completely clueless. Our past, limited praise, now falls back to, broken clocks are correct twice a day-but still, fundamentally, broken.

      1
      June 3, 2020
      • David Drinkwater said:
        The problem for Sacconaghi is that the X device was released in 2017, and it is now 2020. He’s running a little behind.

        0
        June 3, 2020
  6. Fred Stein said:
    Tony misses the point. Apple wisely chose rich functionality vs. lower function, lower price, longer battery life a long time ago. Apple owns the Watch category. The rest are a fragmented mess incapable of delivering good ROI.

    Many wrist devices fit Toni’s spec. They’ve been around since before Apple launched the Watch. Not working.

    3
    June 3, 2020
  7. Greg Boyd said:
    With the release of the latest low priced iPhone and the deaggregation of numbers Apple has figured out how to effectively monetize the base. I posted a 12 month target of $285 before the pandemic. People were confused when Tim Cook said that health related applications would be one of the main drivers of Apple’s future growth. I’m not sure why we weren’t listening. $285? Twelve month? Maybe. $400 24 month? A mortal lock.

    3
    June 3, 2020
  8. Kirk DeBernardi said:
    If Sacconaghi were a clock, he’d be right once a day.

    Maybe.

    3
    June 3, 2020

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