How the Apple Watch Led to My Next Big Prediction (Nasdaq: AAPL)

As much as I love to research tech investments and share my finds with you, I also get a charge out of trying out all the new gadgets that come out every year.

After doing some heavy research, I know this newest iDevice is destined to be much more than just another gadget.

However, it's not the watch itself that demonstrates why Apple Inc. (Nasdaq: AAPL) may be the best tech company - and investment - on Earth. It's the way I was able to make that purchase that proves to me the Silicon Valley legend's long record of success is far from over.

I was headed to an appearance on CNBC. And while my driver may have been battling heavy traffic on the San Francisco-Oakland Bay Bridge, I was able to peacefully use my iPad to buy the watch through the online Apple Store - with absolutely no hiccups or other snafus.

 The Apple Watch will be one of the catalysts that drives Apple Inc. to a $1 trillion market cap. Today, I predict how long it will take to get there - and how much that will boost Apple's share price.
The Apple Watch will be one of the catalysts that drives Apple Inc. to a $1 trillion market cap. Today, I predict how long it will take to get there - and how much that will boost Apple's share price.

So you know that I hopped online and bought an Apple Watch the minute they were available for preorder.

To me, this confirms what I've long been saying: Apple no longer sells products - the company sells an entire tech ecosystem. It sells itself.

After coming to this realization, I updated my prediction on where Apple's stock is headed from here. It's not too late to buy in or add to your position.

Today, I want to share that prediction with you - and show you how the Apple Watch will help us get there...

The Long Game

Since October 30, 2013, I've been predicting Apple's stock price will rise to a split-adjusted price of $1,000 a share by Labor Day 2016.

Opening this morning at $128.10, the stock only needs to gain 11.5% to reach my post-split prediction price of $142.85. But after seeing the company's smartwatch and mentally placing it into Apple's ecosystem, I now believe that the stock will go much higher than that.

Weeks before my latest appearance on CNBC, I had already decided to buy an Apple Watch and had picked out the unit that I can't wait to wear. It's the stainless-steel model with the magnetic Milanese loop band featuring a sophisticated mesh design.

For me, the only real decision was whether to go with the smaller version, with a depth of 38 millimeters, or the bigger, 42-millimeter model. I decided to go with the smaller face because I prefer a sleeker look.

So, when one of the CNBC anchors asked me if I had decided to buy the watch as part of my "market research," I had to laugh. Not only had I spent a good deal of time picking out my watch, but I already had been making plans on how I would use it in my work, my family life, and my "play" time.

This isn't "market research" - this is my life.

Here's what I mean...

My Homemade "Dick Tracy" Watch

I wear a Bluetooth-enabled Plantronics earbud nearly from the moment I get up every day until I go to bed. I use that to talk on my iPhone.

I rely on my phone and earbud to talk to Siri several times a day. I use iPhone's "voicebot" to send text messages, respond to emails, perform Web searches, and keep my calendar.

When I'm watching television late at night, I often place my earbud inside my watchband so I don't misplace it. And sometimes while I'm sitting there, I'll push a button on the unit and have Siri accomplish some task.

In other words, I "home-brewed" a smartwatch years ago - and it's an indispensable productivity tool. And I believe millions of tech-savvy consumers will feel the same way about the Apple Watch.

The watch will immediately integrate into the Apple ecosystem. One of the things that makes Apple such a powerful juggernaut is the fact that all its products work as part of a unified experience.

My iPhone integrates easily with my iPad and my MacBook. I use my smartphone or tablet to run the audio-video receiver in my home theater and to control my two Apple TV units.

And if I had any doubts about buying the new watch online before trying one out at a store, they vanished the moment I saw I could buy two years of AppleCare support along with it. That made it a no-brainer. I'm such an admirer - and heavy user - of AppleCare that I pick up a new MacBook every three years because that's how long the contract for phone support lasts.

Just the other day, an AppleCare tech helped me reconfigure my entire Apple wireless network - and it's never performed better.

The Market Mover

Apple has a well-earned reputation for changing the face of entire industries. Just look at the iPhone. When it debuted in June 2007, it was the first true smartphone.

Today, with Apple setting the standards of design, performance, and functionality, people around the world are buying 1.2 billion smartphones a year.

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That's why Wall Street and the media gave so much attention Apple's move into wearable technology. And the company's industry-shifting prowess is why you should be paying attention, too.

Wearable tech is just getting started and growing at 75% a year - the Apple Watch will send that number into overdrive. And the global watch industry, which now sells about 2 billion units a year, will be similarly affected.

Yes, there are smartwatches on the market right now. But besides Apple's, how many can you name? Right now, smartwatches running on the Android operating system from Google Inc. (Nasdaq: GOOG, GOOGL) sell less than 1 million units a year - combined.

On the other hand, I think Apple will sell at least 10 million smartwatches in the first year. At an average cost of $400, that would generate sales of $4 billion in its first year on the market.

And that's a conservative prediction. Morgan Stanley projects Apple Watch sales of 30 million to 60 million units in the first year. Again using an average price of $400, that could mean annual sales of $12 billion to $24 billion.

With $182.8 billion in sales in fiscal 2014, that won't be that big a boost to Apple's top line - but it is significant. Moreover, the Apple Watch's true value will come as it connects to the rest of the company's ecosystem over the coming months and years.

I expect it to be huge in the healthcare industry as the watch's health sensor capabilities hook up with Apple's HealthKit and ResearchKit open-source software frameworks and start delivering data to physicians and medical researchers.

It all makes a compelling case for why Apple will become the first U.S. firm with a $1 trillion market cap.

My Promised Prediction

Today, Apple is valued at $739.63 billion, the largest of any U.S. business.

Apple's stock will need to rally 35% from here for it to reach that $1 trillion market cap.

And with the Apple Watch as a new catalyst, I predict it will do so in three years.

These are the kinds of meaningful gains that I created Strategic Tech Investor to find for you.

You know I'll keep tabs on Apple - and on any further gains I see.

But that's not the only investment I'll be bringing to you.

I'm now on the search for more.

Pssst: There's a highly lucrative tech sector trend that's flying under Wall Street's radar. Private deals worth more than $5 billion are being struck. With money like that flying around, you'd think this would garner more attention. But Wall Street's ignorance is fine with us...

About the Author

Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...

  • He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
  • He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
  • As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.

This all means the entire world is constantly seeking Michael's insight.

In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.

Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.

And even with decades of experience, Michael believes there has never been a moment in time quite like this.

Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.

To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.

His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.

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