As the reviews pile in for Apple‘s (NASDAQ:AAPL) redesigned Apple Watch ahead of the device’s launch this Friday, sentiment from reviewers appear to be in the company’s favor. The New York Times, for instance, called the new version of the smartwatch “perhaps one of the most significant developments in wearable gadgets in years” — and there’s plenty more optimism in the reviews from other major media outlets.
This is good news for Apple, as the Apple Watch represents the flagship product of the company’s fast-growing wearables segment. Though Apple Watch sales are accounted for in Apple’s smallest product segment — other products — wearables represent a key next leg of the rung for the tech giant.
A major update
The new Apple Watch stands apart from its predecessor with a display that is 30% larger, despite its thinner case. In addition, the Apple Watch’s new next-generation S4 chip delivers twice the speed while maintaining the same all-day battery life. Then there’s the watch’s new accelerometer and gyroscope to help detect falls (and call for help if needed), electrical heart rate sensor for electrocardiogram (ECG) tests, and an enhanced user interface that takes advantage of the larger display to show more content.
“[G]ame-changing bells and whistles have elevated the Apple Watch Series 4 from an investment-worthy health accessory to a sleek and beautiful device that actually might save your life,” wrote Women’s Health about the new device.
Time to upgrade?
Of course, the big question for investors is whether the new watch is compelling enough to convince current owners to upgrade and customers on the sidelines to finally jump in.
“I’d argue for Series 0 and Series 1 [owners], [upgrading is] a no brainer at this point,” writes iMore’s Rene Ritchie. For Series 2 owners, Ritchie said the Series 4 is “compelling.” Series 3 owners, however, will have to “really want that new display, ECG, and fall detection,” Ritchie noted.
Regarding consumers who haven’t jumped into the wearables space yet, Ritchie argued it’s time for them to get an Apple Watch:
If you don’t have an Apple Watch yet, you should get one. Not because wearable connected computing is increasingly capable and ultimately inevitable, though it is and it soon will be. But for the reason I stated at the very beginning, and for one that applies right now, today:
It can save your life.
Virtually all of the Apple Watch Series 4 reviews so far seem mostly positive, suggesting Apple Watch sales can keep up their impressive momentum. Even without the Apple Watch Series 4, Apple’s smartwatch sales surged about 45% year over year in the company’s most recent quarter. This helped Apple’s “other products” segment revenue rise 37% year over year.
Combined momentum from Apple Watch and Apple’s AirPods has helped Apple’s other products segment grow as a portion of total revenue. Other products revenue now accounts for 6% of total revenue, up from 5% of revenue in the year-ago quarter. This may be a small portion of Apple’s revenue, but the company’s relentless progress in wearables is significant enough for investors to count on the nascent product segment to continue growing nicely in the coming years.
Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
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