Apple Inc. (NASDAQ: AAPL) is reportedly evaluating a significant overhaul of its Apple Watch lineup, according to a Sunday report from Bloomberg's Mark Gurman. While the specifics regarding design and launch timing remain unconfirmed, the speculation arrives as the wearables segment continues to show slower growth compared to the company's broader revenue expansion.
In the fiscal third quarter, Apple's Wearables, Home, and Accessories category generated $7.88 billion in revenue, reflecting a 6.5% year-over-year increase. This growth, however, trails the company's overall revenue advance of 16.4%, which reached $109.42 billion during the same period. The wearables category now accounts for just 7.2% of total sales, down from 7.9% a year earlier.
The potential redesign comes amid intensifying competition from smaller, screenless wearable devices such as those offered by Oura and Whoop. These products have gained popularity by delivering continuous health monitoring with minimal user engagement, a trend that could push Apple to diversify beyond its traditional watch form factor.
According to Gurman's report, Apple is considering several design directions, including a screenless wearable, a more circular watch shape, and the reintroduction of ceramic materials. However, the company has not yet settled on a definitive design, and no official announcement has been made.
Apple's current Apple Watch lineup spans from the $249 Watch SE 3 to the $399 Series 11 and the premium $799 Ultra 3. This pricing structure provides flexibility for Apple to introduce a more streamlined, health-focused device while still catering to high-end consumers.
Investors are watching the situation closely, as the growth gap between wearables and the rest of Apple's business remains a concern. While a redesigned Watch could drive upgrades and improve customer retention, the product line must first recover its declining share of Apple's overall revenue mix.
Apple's stock rose 1.63% on Friday, closing at $319.70, which added roughly $75 billion to its market capitalization. That move occurred before the weekend report and is not attributed to the rumor. The company's market cap now stands at approximately $4.67 trillion, with analysts' average price target of $324.45 suggesting limited upside of about 1.5%.
Should Apple proceed with a screenless device, it could be priced lower than existing models, potentially reducing short-term revenue per user. Additionally, there is no guarantee that the concepts will come to fruition, and any launch could be delayed or reallocate revenue among Apple's product lines.
For now, investors are advised to monitor official hardware announcements, pricing details, and how any new devices integrate with Apple's health services. The speculation carries strategic importance, but its financial impact remains undefined until concrete plans are revealed.
