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Did Investors Just Dismiss The Apple Watch?

One of the biggest themes circulating through the financial media is the Apple Watch, which was formally revealed by Apple CEO Tim Cook at the company's recent event. Expectations are high, but the company's presentation left a lot to be desired. Several of the journalists and reporters who were given an early opportunity to try it out were unimpressed. Of course, whether it latches on with consumers more broadly remains to be seen, but the early signs aren't encouraging. Apple's stock price fell 2% on March 10.

The separate issue for Apple investors is that even if the watch is a hit, it will likely have only a minimal impact on Apple's bottom line. That's because the vast majority of Apple's revenue comes from the iPhone, and that will remain so. Even if Apple sells 5 million watches this year, which is no easy task, that would generate $1.75 billion in revenue at an average sales price of $350 apiece. While $1.75 billion in revenue is a huge sum, it would represent less than 1% revenue growth for Apple.