Apple Watch Demand Slides Significantly in June as Launch Momentum Wanes

[GuitarDTO]

Google is the company who will end up revolutionizing the category, by focusing on watches as medical devices. If you recall, many of the early rumors surrounding the Apple watch centered on it's intentions of being a medical/fitness device with discussions that it may even need to get certified by the FDA. Then Apple seemingly did a 180 and got focused on the fashion angle, with weird fashion showings and anorexic models wearing the watch on every magazine cover. The launch leading up to the device was just awkward. This was all probably to just get the thing released instead of doing the hard thing, saying no, and waiting until it truly was a revolutionary product that did something new/needed. (IE, the Steve Jobs vision).

When Smart watches are capable of taking accurate blood pressure, blood oxygen levels, heart rate, work with company pedometer initiatives (Fitbit does, Apple watch doesn't where I work), can operate standalone without the phone yet still do all the functions and more that the current watch does, and get more than 1 day battery life.....they will take off.

 

[Benjamin Frost]

Not really surprised here. Apple hyped the watch but no one could walk into t a store and buy one. People who ordered online had to wait a month or more. Then when it finally arrived they found that wearing a computer with limited features wasn't as fun as they thought. And then the bill came.

I don't think it's Apple per-se, but smart watches in general and the whole idea of spending money on something that most working class people don't really need. Really, it's just another device that the industry wants to sell you so they can make money because they have run out of ideas for useless junk.

If I had an extra $500 or $600 laying around I wouldn't spend it on a smart watch no matter what company made it. It's a luxury item no matter how the company tries to sell it.

Exactly.

It's like Fathers Day: a cynical money-grab by companies. Mothering Sunday is a religious festival; Father's Day is just an excuse for business to make a buck.

No doubt, they'll be trying to tout Grandparents Day, Sisters Day and Pets Day next.

 

[kdarling]

I think Apple watch is a phenomenal product that will change what defines wearables. Not everyone gets it now, but they will.

That sounds like something written before we saw the actual Apple Watch. Back when everyone thought it would have incredible medical sensors, etc.

Is that what you're basing your prediction on? Features that might be added in the future?

 

[AppleScruff1]

Nope. Here's what Tim Cook said on one of Apple's earnings calls:

"I’m not very anxious in reporting a lot of numbers on Apple Watch… because our competitors are looking for it."

That tells me it's not selling as well as expected. If Apple was killing it with the watch, who cares about the competitors? If it is selling so so, and they release numbers, the competition will be smelling blood. Tim just hedged his bet with that statement.

 

[Benjamin Frost]

Yes, I agree Apple still has work to do. Apple can't sit back (like they've done with the Apple TV) and watch the market pass them by.

That's precisely what they should do, as they did with netbooks.

Wearables is not a category worth pursuing for them.

 

[CFreymarc]

Tim called BS on the cost estimates last quarter. I don't think $349 is a bad selling point, though I wouldn't be surprised to see a $299 or even $249 version at some point (maybe they'll carry over the original Sport next year). That said, they actually have more room in the stainless steel version. Steel is just as cheap as aluminum to produce, and IMO the steel watch looks more like a regular watch. We might see more price flexibility there.

Things are just getting started. Plus, remember that right now Apple Watch is an incomplete product. Watch OS 2 should address a lot of the initial concerns of reviewers (who seem fixated on apps for some reason). In the future we might see GPS, which would address the concerns of the fitness crowd.

Agree. I have already profited from my Apple Watch purchases going on ten fold now with several clients working on custom apps for the Apple Watch. In fact, I'm shopping for my forth Apple Watch now as clients keep on grabbing mine after a demo and I expense them the watch.

There will of course be improvements (screen, video, GPS, compass, etc.) that will make it even more feature rich. I have my stainless steel Apple Watch running watchOS 2 with several fun creations on it.

What grinds my gears on platforms like this is you see the extreme optimists that have done well from their efforts along with the most bitter-face-in-the-gutter types who would critic the Mona Lisa for not having eyebrows. The latter can really bring you down if you start to accept or value their opinion.

 

[CFreymarc]

That's precisely what they should do, as they did with netbooks.

They didn't call it a netbook, they answered that market in spades and called it the 11" Macbook Air. It did very well.

 

[NotSafeForWork]

It's 2020.

• Apple Watch 5 has always-on display, built-in modem and multi-day battery. It's several mm thinner and sleeker
• It connects autonomously to LTE++ or Wifi and can get all the data it needs directly and handle phone calls and Facetime with built-in camera. iPhone 8S not required to use it
• It has sensors for HR, blood pressure, blood glucose
• It acts as your keys/ID for your office, car and your home

This is where we're heading since that's the journey we already did with original iPhone versus iPhone 6.

Use your imagination and don't be limited by Version 1.0.

 

[TyShawn]

It's outside of my price point for a wearable.

 

[CFreymarc]

That tells me it's not selling as well as expected. If Apple was killing it with the watch, who cares about the competitors? If it is selling so so, and they release numbers, the competition will be smelling blood. Tim just hedged his bet with that statement.

I think you are taking it out of context. My view is that Tim know their marketing hutzpah could be copied.

 

[CFreymarc]

It's 2020.

• Apple Watch 5 has always-on display, built-in modem and multi-day battery. It's several mm thinner and sleeker
• It connects autonomously to LTE++ or Wifi and can get all the data it needs directly and handle phone calls and Facetime with built-in camera. iPhone 8S not required to use it
• It has sensors for HR, blood pressure, blood glucose
• It acts as your keys/ID for your office, car and your home

This is where we're heading since that's the journey we already did with original iPhone versus iPhone 6.

Use your imagination and don't be limited by Version 1.0.

You left out the free standing, holographic display.

 

[apolloa]

I'm half tempted to go and quote all the posts on this site from members claiming how Apple was going to ruin the entire Swiss watch industry

It's an overpriced gimmick at the end of the day and there are no where near enough people to want smart watches, let alone Apples one, to make it a viable market at present. They have a very very very long way to go before they are going to be viable, they are trying to market themselves as an accessory for your phone or tablet, and cost as much or more then your phone or tablet. Hardly a successful business model.

 

[NotSafeForWork]

I'm half tempted to go and and quote all the posts on this site from members claiming how Apple was going to ruin the entire Swiss watch industry

It's an overpriced gimmick at the end of the day and there are no where near enough people to want smart watches, let alone Apples one, to make it a viable market at present. They have a very very very long way to go before they are going to be viable, they are trying to market themselves as an accessory for your phone or tablet, and cost as much or more then your phone or tablet. Hardly a successful business model.

Steve Ballmer ... is that you?

www.youtube.com/watch?v=eywi0h_Y5_U

 

[AppleScruff1]

I think you are taking it out of context. My view is that Tim know their marketing hutzpah could be copied.

Now you're losing me. The competition can watch the Apple ads just like we can. They can see who Apple is targeting. How is keeping sales numbers hidden preventing this?

 

[76ShovelHead]

The iPod was revolutionary in its time as it launched digital media into the mainstream, a new way of carrying music with you less all the hassle of burning cds, carrying cds, etc and an overexposed ad campaign.... I wouldn't chock the apple watch off as a failure, far from it considering the likes of the newton. It's just not for everybody, and will never replace the iPhone. Niche.

 

[maxsix]

It's outside of my price point for a wearable.

It's outside of millions of people's range. If indeed Apple wants to sell to the blue collar types they will have to lower the price, or be satisfied with a lower volume of sales.

 

[KPOM]

I
It's an overpriced gimmick at the end of the day and there are no where near enough people to want smart watches, let alone Apples one, to make it a viable market at present. They have a very very very long way to go before they are going to be viable, they are trying to market themselves as an accessory for your phone or tablet, and cost as much or more then your phone or tablet. Hardly a successful business model.

The iPhone costs $649-949. The iPad runs from $299-929. The mainstream Apple Watch lines run from $349-$1099. Could the Apple Watch sell 10 million per quarter one day? Perhaps. That would be less than a 20% uptake rate from iPhone purchasers, but likely still bigger overall than the Mac and perhaps even the iPad when that market settles.

 

[ToroidalZeus]

Apple jumped the shark when Jobs departed. Ritchie Cunningham has left the show, but diehards are still watching.

Apple should be spending much more effort honing their software, but they aren't, and there are problems galore. Apple should be paying attention to their computers and improving the products more often. You can't even get a modern Apple monitor anymore.

The watch is a redundant trinket. Sure, it sells. It doesn't sell well enough to push Apple forward with increasing momentum. There is trouble in the top due to lack of vision. I expect 3 or 4 more years before someone gets itchy in the money-bags dept. and investors start jumping ship.

I second that. That's about the time it will take for the iPhone to saturate the China market.

 

[robbyx]

Obviously, I can't provide FACTS of projected sales. As I said, I was just projecting from the numbers released by Slice.

1.5 million launch
10,000 - 20,000 per day = 3.7 - 7.3 million
Bump for the Holidays ~ 3 million

So that's 8.2 - 11.8 million x $500 ASP = $4.1 - $5.9 billion in the US

Those are bare minimum number to me for US sales. Considering that sales in the Americas are only 35% of Apple's revenue, I think $10 billion is a reasonable projection. I also think watchOS 2 will provide a bump to those sales.



No I was getting on your case for using these numbers as evidence of your POV without providing any context.

I didn't ask you for facts. I simply asked for what sales numbers would have met your personal opinion of success.

Sales numbers aren't an indicator of success to me for this product in its first incarnation. The question is whether or not they can sell outside the faithful Apple and wearables fanboy markets. Time will tell.

Sales are dropping off rapidly if this bit of data is to be believed. Not a good sign. Your projections are optimistic. You assume they're going to level out at 10,000 - 20,0000 per day? I think they'll be under 10,000 in relatively short time, if they aren't there already. I don't see this getting a holiday bump either. If the word on the street was favorable, maybe. But no one outside of a fanboy segment is particularly excited about the product. Do you sense any excitement around this product among the general public? I don't.

My biggest concern is that Apple continues to spread itself thinner and thinner. There is a lot of talent focused on the watch, talent that isn't focused on the Mac. Or the iPhone. Now Apple has another OS to maintain and develop. All for an accessory in a market segment the public doesn't seem to care about. Is that really the best use of Apple's resources?

 

[KPOM]

Now you're losing me. The competition can watch the Apple ads just like we can. They can see who Apple is targeting. How is keeping sales numbers hidden preventing this?

Companies in general try to be as opaque as possible. Apple is unique among mobile phone makers in that they disclose unit sales. More likely Apple doesn't want to give away information about the mix. If they disclose that they sold X numbers of watches and earned $Y amount of revenue, it wouldn't be too hard to get a good sense of the mix between the Sport and Watch lines (I'm assuming the Edition isn't big enough to skew the revenue figures). Apple would essentially be telling the industry where they should position their products for the maximum profit in this category (whatever the category winds up generating). On the other hand, if "Other" revenue just increases we don't know if Apple is selling comparatively more watches at a lower price, or comparatively fewer watches at a higher price.

Apple will likely be tweaking its strategy for the Watch as time goes on. It's obvious the market will need some cultivating if it's going to be successful in the long run. This isn't the same as Apple entering an established market where there is plenty of demand for the category in general (e.g. iPhone).

 

[sracer]

That tells me it's not selling as well as expected. If Apple was killing it with the watch, who cares about the competitors? If it is selling so so, and they release numbers, the competition will be smelling blood. Tim just hedged his bet with that statement.

Any clear-thinking person would draw the same conclusion.

"because our competitors are looking for it." is indeed corporate code-speak for, "if they knew how low the sales were then they know that they'd have a chance at competing".

Competitors are always looking for sales figures. That hasn't stopped Apple from publishing the numbers in the past. So what makes the Apple Watch so different that the sales figures need to be guarded?

 

[KPOM]

Any clear-thinking person would draw the same conclusion.

"because our competitors are looking for it." is indeed corporate code-speak for, "if they knew how low the sales were then they know that they'd have a chance at competing".

Competitors are always looking for sales figures. That hasn't stopped Apple from publishing the numbers in the past. So what makes the Apple Watch so different that the sales figures need to be guarded?

If they unexpectedly sold 20 million, I'm sure they would be saying so. However, expectations of Apple product sales are stratospheric. Tim Cook saw what happened in 2012 when iPhone sales didn't increase as much as expected and wisely is playing this conservatively. It took 74 days for the iPhone to sell its first million. In 2007 that was enough for Steve Jobs to declare it a success. Today if the Watch is "only" selling 20,000 per day the pitchforks start coming out. Apple can see plain as day that Samsung has had no success so far in this category (though they are still supposedly plugging away, this time working on a round watch), so it's not like they didn't realize there wasn't some huge untapped market just waiting for the first thing to come along.

In some respects, this is more like where the PC and Mac were in the early 1980s. They were pricey, people couldn't figure out what they were useful for, and development was fairly slow.

 

[ToroidalZeus]

It's 2020.

• Apple Watch 5 has always-on display, built-in modem and multi-day battery. It's several mm thinner and sleeker
• It connects autonomously to LTE++ or Wifi and can get all the data it needs directly and handle phone calls and Facetime with built-in camera. iPhone 8S not required to use it
• It has sensors for HR, blood pressure, blood glucose
• It acts as your keys/ID for your office, car and your home

This is where we're heading since that's the journey we already did with original iPhone versus iPhone 6.

Use your imagination and don't be limited by Version 1.0.

Wishful thinking isn't a synonym for imagination.

2007 iPhone: 3.5" in screen w/ 1400 mAh battery
2014 iPhone 6: 4.7" screen w/ 1810 mAh battery
2015 Apple watch: 1.5" screen / 205 mAh battery

Your first 3 bullet points require a MASSIVE increase in battery technology. Battery capacity would need to increase by close to 800% for the AW to match the iPhone.

And by the way, if that did happen, the iPhone would have a 1 week battery life which means even less people would want a smart watch.

 

[mantan]

But did it really? The iPad certainly climbed the sales charts faster than any other Apple product in history, but it appears to have stalled a lot more quickly, too. Sure, it still sells a lot better than most pundits predicted it would back in 2010, but the post-PC era isn't quite here yet and may never arrive. We are at the point where Apple will sell about 10 million iPads per quarter. Could the Apple Watch achieve that some day? I think so.

It stalled, but mostly because the lifespan of the product is much longer than the iPhone. It sold literally tens of millions of devices over multiple generations before reaching the saturation point.

Moreover, it because a 'must have' consumer device that was successful across all consumer groups - young people, old people, geeks and people who didn't like technology. It was successful in both personal use and business use. Right now wearables show little legs beyond a small niche group....

 

[Four oF NINE]

I'm not surprised. No one wears a watch these days. I don't think Steve would have let this product come to market at all much less in its current state.

I must disagree with that baseless assertion. Perhaps you were being hyperbolic, but the watch industry is very lucrative for established players as well as newcomer Apple. The watch industry is a multibillion dollar industry.

I'd feel undressed and out of sorts without a watch on my wrist.