Apple Watch Demand Slides Significantly in June as Launch Momentum Wanes

[LordVic]

This is a very interesting thread with a variety of good points made. I just have some random thoughts:

1. I question whether the sales data is accurate, but oh well.

2. How is a product that has been available for sale for about 2 months considered a failure?

3. What were the sales goals of this device? If we don't know what the sales goals are and we don't know how many units or what revenues the device brought in, how can we classify it as a failure?

4. Why are people comparing (possible) Apple Watch sales to iPhone sales? Isn't that an "apples or oranges" comparison? Wouldn't it make more sense to compare the Apple Watch to competing, similar products. Here's an analogy. Honda makes cars and they more recently started making airplanes. Should people compare sales of the Honda Accord to the Honda Jet, or should they compare sales of the Honda Accord to the Toyota Camry?

I'm pretty critical about things apple co does, but I agree with all your parts.

I don't think we can call it a bust. you're points are all extremely valid. We will have to see when real numbers come out (dollar $s). For all we know, Apple foresaw only selling ~4m in the first year and that is their target.


if they hit their target, it's not a failure is it?

 

[Dmunjal]

A good way to judge the success of a product launch is to look at the resale market. Who doesn't remember the premiums on iPhones and even iPads months after a launch? This is not happening with the Watch. Prices are dropping fast.

http://swappa.com/prices/apple-watch/us
http://swappa.com/prices/apple-watch-sport/us

Here's a guy having trouble selling his Watch at all.

https://forums.macrumors.com/threads/38mm-ss-applewatch.1899703/

"... easily the hardest apple product I have tried to sell. I may just end up keeping it. The only offer I got was a ps4 (they must think i'm brain dead)."

 

[SHNXX]

A good way to judge the success of a product launch is to look at the resale market. Who doesn't remember the premiums on iPhones and even iPads months after a launch? This is not happening with the Watch. Prices are dropping fast.

http://swappa.com/prices/apple-watch/us
http://swappa.com/prices/apple-watch-sport/us

Here's a guy having trouble selling his Watch at all.

https://forums.macrumors.com/threads/38mm-ss-applewatch.1899703/

"... easily the hardest apple product I have tried to sell. I may just end up keeping it. The only offer I got was a ps4 (they must think i'm brain dead)."

That's pretty interesting.
But the price seems to be close to the new, so I assume that while arbitrage opportunity does not exist, for a used Apple product, it's still selling at a healthy price.

 

[nburwell]

I didn't read every single response in this thread, but in looking at my own experience, when the Watch was originally announced, I didn't really buy in to the hype. Once the Watch was released, I went into my local Apple Store and looked at them. I didn't leave the store impressed. I'm not a watch wearer at all, but I considered purchasing the Apple Watch. Now after I've done some thinking, I'm probably going to wait until the gen 2 models are released (if I even buy one at all). I rely heavily on my iPhone, so I'm hard pressed to spend $350 on a device that will probably lose it's novelty after about a few months for me. Honestly, I'd rather put that money towards upgrading my 6 to a 6s once it's released.

 

[dustlane]

Artfully said

 

[JSB1540]

I didn't read every single response in this thread, but in looking at my own experience, when the Watch was originally announced, I didn't really buy in to the hype. Once the Watch was released, I went into my local Apple Store and looked at them. I didn't leave the store impressed. I'm not a watch wearer at all, but I considered purchasing the Apple Watch. Now after I've done some thinking, I'm probably going to wait until the gen 2 models are released (if I even buy one at all). I rely heavily on my iPhone, so I'm hard pressed to spend $350 on a device that will probably lose it's novelty after about a few months for me. Honestly, I'd rather put that money towards upgrading my 6 to a 6s once it's released.

Personally, I will wait till 7 before upgrading from the 6. I did purchase the watch with no regrets. If you "rely heavily" on your phone, I think you will be amazed at how often it now stays in your pocket or purse.

 

[firewood]

So do we believe Slice? Or Tim Cooks Q3 financial results conference call (with FTC lawyers listening in)? And Tim Cook says June Watch sales were up from the previous 2 months.

So the more interesting question is what went so wrong with Slice's data or analysis? Perhaps more typical (non-fanboy/girl, non-early adopter) customers aren't in Slice's database, and they were the ones who started buying when the waiting times finally shrunk to something reasonable?

 

[billy the fish]

I havnt seen a single one in the wild, and my office is 70% iPhones... Over in the UK, no interest at all.. 400 notes to read a text message quickly.. Most folk are passing up..

 

[firewood]

I havnt seen a single one in the wild, and my office is 70% iPhones... Over in the UK, no interest at all.. 400 notes to read a text message quickly.. Most folk are passing up..

Very likely true. There are several 100 million recent iPhones in use, but only 2 to 4 million Apple Watches sold, so far. So you would only expect to see a Watch on around 1% of iPhone users. Have you looked at the wrists of 100 different people with iPhones yet?

Until the Watch has been on sale, worldwide, for as long as the iPhone 5S and later have, which is almost 2 years, so that the Watch has the same amount of time to ramp up in sales at the compatible iPhones, you won't know what percentage of people will be "passing up" on it.

 

[kdarling]

So do we believe Slice? Or Tim Cooks Q3 financial results conference call (with FTC lawyers listening in)? And Tim Cook says June Watch sales were up from the previous 2 months.

So the more interesting question is what went so wrong with Slice's data or analysis? Perhaps more typical (non-fanboy/girl, non-early adopter) customers aren't in Slice's database, and they were the ones who started buying when the waiting times finally shrunk to something reasonable?

Or Occam's Razor: the correct answer is the simplest one, which is that Cook was talking about revenue-producing official sales, which Apple only counts when a product (watch or band) is delivered. I got mine in mid-May, and I was ahead of a lot of people here. With the slow ramp up of production, it would make sense that the most Watches and bands would have been delivered in June.

OTOH, if he actually did mean that the number of people purchasing a watch in June was highest, then we'd have to accept that that launch sales were poorer than anyone thought. Which I don't believe.

Another possibility of countable sales is that Apple began shipping watches to third party retailers in June, but I haven't heard anything like that. Have you?

 

[BaldiMac]

Or Occam's Razor: the correct answer is the simplest one, which is that Cook was talking about revenue-producing official sales, which Apple only counts when a product (watch or band) is delivered. I got mine in mid-May, and I was ahead of a lot of people here. With the slow ramp up of production, it would make sense that the most Watches and bands would have been delivered in June.

OTOH, if he actually did mean that the number of people purchasing a watch in June was highest, then we'd have to accept that that launch sales were poorer than anyone thought. Which I don't believe.

Another possibility of countable sales is that Apple began shipping watches to third party retailers in June, but I haven't heard anything like that. Have you?

So, just to keep this straight. If Apple Watch sales decreased from April to June, that's bad for Apple because the trend is down. If Apple Watch sales increased from April to June, that's bad for Apple because the launch sales were overestimated.

Is there any situation that's good for Apple? I guess most companies don't have to deal with the confusion over whether launching a product that brings in over a billion dollars in its first quarter is good for the company.

(I know you didn't specifically say either situation was bad for Apple.)

 

[firewood]

If Apple Watch sales increased from April to June, that's bad for Apple because the launch sales were overestimated.

Why is it bad for Apple when random financial/news pundits make up bad guesses for their estimates? Apple clearly sold more than they could make the first several weeks.

The news isn't good or bad yet, no matter which way current sales are going. Several successful Apple products had temporary dips in their sales rate following launch. The successful ones picked up steam after 2.0 release and/or for the holiday gift season, neither of which has happened for the Watch yet. The Q1 conference call in January will provide the real news regarding "Other".

 

[kdarling]

So, just to keep this straight. If Apple Watch sales decreased from April to June, that's bad for Apple because the trend is down. If Apple Watch sales increased from April to June, that's bad for Apple because the launch sales were overestimated.

Is there any situation that's good for Apple? I guess most companies don't have to deal with the confusion over whether launching a product that brings in over a billion dollars in its first quarter is good for the company.

(I know you didn't specifically say either situation was bad for Apple.)

I'm glad you added the last line. Because you're right, I didn't

I don't think either way can be labeled "bad" or "good" yet. It's too early.

As I've said before, I think it sold fine for this category, and will do better in the future.

All I'm trying to do, is figure out what Cook was actually saying, and to determine a baseline for future discussion.