Apple Watch Dominated Holiday Season With Estimated 5.2 Million Shipments

[Abazigal]

Apple's advert warning about IBM dominating the personal computer market in the early eighties.

Such as always been the natural order of things. There is no way to break the rules without creating new rules. One empire falls, another rises to take its place. The rebels turn eventually into part of the system or the system itself. You can't bring about a new world order without first doing away with the current one.

Apple can't possible remain the scrappy underdog forever.

 

[EvilEvil]

I'm not going to pick up an Apple Watch until they make it so you can use it without having your phone near you.

 

[iZac]

I was really REALLY close to buying two for Christmas (one for me and one as a surprise for my girlfriend) but the lack of in-store availability of the nylon strapped ones stopped me. I didn't want to risk the online delivery estimates and Apple China only gives you a 7 day exchange window.

Basically I couldn't have the thing sat under a Christmas tree when there's no guarantee I picked her preferred colour / size, then I wouldn't be able to exchange it in time.

 

[Zirel]

Try using an iPad 2 or iPhone 4s running ios 9 and get back to me on that.

I have. It's fine
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I'm not going to pick up an Apple Watch until they make it so you can use it without having your phone near you.

Then you need to buy one now.

 

[cardfan]

Apple could do much better IMO. I expect this market will surge in a few years after a few more iterations. Their biggest problem area is Macs, not this.

 

[nwcs]

Good job, Apple. Now open watch faces to developers so we can have something more visually interesting than the pabulum you think we want with the stock faces. The chronograph ones are nice but only available for chronograph. How about some Timex or Seiko style watch faces? Patek Philippe?

 

[crsh1976]

What this doesn't say is that no matter how this is spun to focus on the Series 2, those 5.2m Holiday season gifts could have been largely discounted Series 1 watches - Apple should disclose which model sold better if they want to play this right.

 

[darkloki]

Trying to buy my watch this week but I'm having a hard time picking which one to get. I'm thinking of going Ceramic because I like the clean look. I'll try to finalize this week though.

 

[Juicy Box]

According to that data Apple shipped 2m less AW in 2016 (11.6m v 13.6m in 2015) approx 15%drop! Going the wrong way Tim!

I was looking for this typical macrumors reader comment.
Was not disappointed.

It's a fair comment and I'm surprised it wasn't picked up in the article, especially as the estimates for the first year's sales only covered an eight month period in limited markets and 2016 was for a full year with much wider distribution.

I think it is a very fair comment, quarter to quarter holiday shipments were flat, and year to year total shipments dropped 15%. Also, the overall growth of Apple and Samsung smart watches has stalled, while the "others" has had a huge (relatively) increase. I would like to see a break down of the others.

I am not sure what this means, but it is obviously a negative for both Apple and Samsung.

I wonder why this was not mentioned in the article.

 

[theluggage]

Fitbit is already in an alarming corporate situation, Pebble sold for scraps, Android wear is a complete flop, and Samsung has its own OS, leading to more balkanization of the space, thus creating the ideal conditions for Apple's domination.

Pebble watches had compelling features, but they looked cheap'n'nasty - even if $100 is super cheap for a smartwatch, it still needs to look better than a $10 dumbwatch. Also - Kickstarter is just that: a way of starting new products in an unproven market. If a Kickstarted product doesn't raise enough profit and/or attract enough real investment to bankroll the development of version 2 without Kickstarter then there's something wrong...

Fitbit seems to have a successful product - fitness/sports seems to be the killer app for wearables, and common sense 101 states that, for sports, people will prefer something small, light and relatively cheap on their wrists rather than an expensive halfbrick. They're also doing well on viral marketing (everybody seems to be counting how many steps they've walked today) If they have corporate troubles I suspect that they're self-made.

Meanwhile, I haven't seen a single TV commercial for Android Wear, and Samsung Gear gets an eye-blink appearance in an ad that also features phones and VR headsets... Apple seems to be the only one trying to sell smartwatches with any enthusiasm.

Meanwhile - 5 million Watches shipped vs. 78 million iPhone sales. Nothing to sniff at in isolation, but if Apple were looking for the next iPod or iPhone to provide windfall growth as the iPhone market starts to "mature", they'd be disappointed. They actually sold nearly as many Macs as they shipped watches last quarter (probably at an average of about 3x the revenue per unit). You can also see from the graph in the linked article that those Mac sales are far less seasonal than the iPhone (and the Watch is likely similar) which is dominated by peaks in the holiday season. So Watch revenue is over a year is likely to be a fraction of Mac revenue.

...which is interesting as the focus of dissent here seems to be that Tim Cook is more interested in watch bands than Macs.

 

[darkloki]

This is fitbit --> http://www.forbes.com/sites/peterco...nge-is-not-a-buying-opportunity/#575d2ecc7116

Ouch...

 

[Juicy Box]

I assume you are asking this question in seriousness, so I thought I would answer. I am not an Apple employee "in the know" and Apple is not one of my company's (direct) competitors, so these are educated guesses. But I think they are good guesses.

One reason falls under the category of competitiveness. If your competitors, known and unknown, do not truly understand how fast you are turning around specific products at specific prices, it can make it really hard for them to compete by undercutting you. A second reason is vendor/supplier channel . . . management. If no one on the outside knows exactly how many widgets you will need, then you can better play vendors/suppliers against each other. A third reason is what some might call accounting and/or marketing games. If you do not report a lot of specifics, especially if you are still making a lot of money for your investors, they will let you get away with some vague reporting in some ways . .. and when the product mix has to change later, you do not get lots of annoying questions about the success of this or of that. You can just say as a whole this chunk of product category is doing great and deal with under-performing lines exclusively internally.

A fourth reason is just my judgment watching this company over time. They are just so secretive about locks of things--some for reasons I have just written--that I think it is second nature to them.

I hold a pretty senior position at a public company, and reasons 1, 2, and 3 are business legitimate reasons we consider all the time. In fact, I help craft a fair part of our strategies and they can center on such reasons. And this is coming from someone with a lot of science/engineering in their background, so you would definitely be correct in guessing I prefer having data. Lots of it. But I realized long ago that I am not the audience for lots of stuff, and that you can definitely get to where you have to write off a whole product cycle if you not at least consider and address such things. Maybe if your widgets are always the best for everyone at a price everyone loves and still make you crazy amounts of money . . . maybe then you could be fully transparent. Probably not, though. And I have never worked for such a company, certainly.

Thanks for your thoughts.
I suspected similar things that you mentioned, plus some others.

My question was more for the article, or MR. They make a comment about Apple being "deliberate" with making estimates about AW revenue difficult, like it is a matter of fact, or a known fact, but they did not give a reason why this is.

I found it to be strange that they did not give their reasoning behind this statement.

 

[ericinboston]

I'm actually in the market for a watch...and went to Apple.com last night to look for one. That has to be the absolute worst website for trying to choose a watch. It is so complex that I basically gave up. There are 5 items to filter on (Series, Case Size, Case Material, Band, and Case Color). It seems to buy the Series 2 the prices start at $399 which is $100 more than the last version which is a 33% increase in price. From what I have read, the only difference is the Series 2 has a GPS (I do not need) and water proofing (I do not need...and every watch in the world will work just fine with some rain sprinkles).

Sorry, Apple...not spending $400 minimum. And Apple is not selling me on all the promised/perceived smartness of it. Apple should really consider selling a $199 watch...as a watch. The AW has a nice look to it and nice screen...but that's all I really need/want...a nice looking watch...and whose battery lasts longer than 10 hours...need it to be at least 48 hours. There are literally thousands to choose from selling at $199 and up anywhere on the Planet...except Apple, of course.

 

[mdelvecchio]

It's a fair comment and I'm surprised it wasn't picked up in the article, especially as the estimates for the first year's sales only covered an eight month period in limited markets and 2016 was for a full year with much wider distribution.

Not really. the AW was Apple's fastest selling product at launch, but since it's a smartwatch which is niche compared to phones, it's not surprising that after initial techie nerd demand was met it would be slower going with the masses.

 

[Eggtastic]

I may wait for a redesign to pick one up. I was on the verge of getting one, still am, but I feel as if the screen could be bigger, bezels smaller, and if apple would actually make it thinner (shocker). I only say this as the design hasn't changed too much. Wishful thinking of course since I believe we are far off from a redesign.

I never wear watches. I got a $250 Nixon for my birthday a few years ago and I only wear it to nice places but even then it weighs a lot. It looks nice but that is all it does, tell time.

I can see using the apple watch for all kinds of things as I am into fitness.

 

[TallManNY]

Glad to see smart watches doing so well. I find them indispensable on most days. Yet somehow I still managed to misplace my Apple Watch series 0 Stainless model after my last unexpected out of town trip and ensuing holiday chaos. And trust me, I miss it.

So I've been wearing my Gear S2 watches until I get a chance to sort through and find my Apple Watch. I got a black Gear S2 with a leather band for Christmas. It's really nice.

Apple and Samsung have both done a great job with their smart watches. I do think Apple watches are more comfortable but that's just for me and my tiny wrist.

I think it would work out nicely someday for Apple to add LTE capability to their larger model. It can be quite a nice convenience if you forget your phone. My black Gear S2 doesn't have phone capability but the one I got for free from an AT&T promotion does and it got me out of a couple of jams out in the yard when I left my phone indoors.

What do you think your cell company will charge you for LTE connection to your watch? I'm guessing $10 per month at least initially like they do for tablets. I think that added cost is going to be a real issue for an LTE watch.

And while there is no real evidence of cell phones causing cancer, I'm expecting that it is likely that I will have a smartwatch touching my wrist in exactly the same spot all day every day for the next years or decades to come. So if LTE and radio waives or just the heat from that type of activity causes any issues, you can't do it because the constant exposure in exactly the same spot on millions upon millions of people for years upon years or even decades will exacerbate any potential hazard. If Apple has to worry about anything that could be a real adverse material event, it is a health scare or health related class action.
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I think they look thicker from afar they feel when they're on. I agree on the bezels though. Probably one of the two big changes they need to make (thinness and edge to edge screen). Apple is clever the way they use black design to make the screen look larger but those black frames around the screen really hurt the look of most of the content in my opinion.

If you look at the curve of the bands connectors, they are designed to fit in and match a thinner watch. I think Apple will shave a bit of height off the watch in the next iteration but all our bands will continue to fit for years to come. And I think they will decrease the bezel a bit as well.

 

[satchmo]

Do you expect the other manufacturers to just give up then? What's to say the competition can't learn lessons from the Apple Watch and improve their smartwatches so they can compete?

This is a great point.

Let's not forget, what's happened in smartphones and PC markets. Who owns the market share in both of those? Not Apple.

It may be the opposite case where Android takes off after Apple has legitimatized the wearable market. Google I/O is around the corner with rumours of new Android wear and watches.
And importantly, choice and competition is good for consumers.

 

[psac]

The $219 Target price for the Series 1 42mm for Black Friday and around the holidays was a steal. I love mine. I don't need the GPS, and I don't swim. The battery life is great, I usually end the day with 70+%!!! I haven't tried going multiple days without charging it, but I'm sure I could.

 

[Juicy Box]

According to that data Apple shipped 2m less AW in 2016 (11.6m v 13.6m in 2015) approx 15%drop! Going the wrong way Tim!

I was looking for this typical macrumors reader comment.
Was not disappointed.

It's a fair comment and I'm surprised it wasn't picked up in the article, especially as the estimates for the first year's sales only covered an eight month period in limited markets and 2016 was for a full year with much wider distribution.

Not really.

What are you saying "not really" to? That it was a fair comment?

the AW was Apple's fastest selling product at launch, but since it's a smartwatch which is niche compared to phones, it's not surprising that after initial techie nerd demand was met it would be slower going with the masses.

Makes sense, although I am not sure what it has to do with OllyW's post. Are you saying the first year of AW sales shouldn't really be considered because of all the tech nerds running out to buy it at launch?

 

[Mikael H]

It seems to buy the Series 2 the prices start at $399 which is $100 more than the last version which is a 33% increase in price. From what I have read, the only difference is the Series 2 has a GPS (I do not need) and water proofing (I do not need...and every watch in the world will work just fine with some rain sprinkles).

If you don't want the Series 2 specific features, a Series 1 can be had from $269, which is a decrease from last model's price even though you get most of the innards from the Series 2 (a definite improvement on the Series 0).
I fully respect that this is a bunch of money and not everyone will want to spend it on this kind of toy, but there's no need to spread alternative facts about it.

 

[Abazigal]

This is a great point.

Let's not forget, what's happened in smartphones and PC markets. Who owns the market share in both of those? Not Apple.

It may be the opposite case where Android takes off after Apple has legitimatized the wearable market. Google I/O is around the corner with rumours of new Android wear and watches.
And importantly, choice and competition is good for consumers.

Market share is the means, profit is the end. All the market share in the world is useless if they don't let you turn a profit.

Like I said, the Apple Watch won't be the only smartwatch in the market, but it will be the only one which matters.

 

[iKaushal]

I have the original apple watch and I love it.
Havent used any other regular wristwatch ever since I got it.

 

[OllyW]

I have the original apple watch and I love it.
Havent used any other regular wristwatch ever since I got it.

I use both. The Apple Watch when I want functionality and the others went I want to wear something a bit more stylish.

 

[usarioclave]

I have the original apple watch and I love it.
Havent used any other regular wristwatch ever since I got it.

Me too.

 

[imola.zhp]

I picked up a 1st gen for $180 shipped on Black Friday. Love it! Would have never paid more than $200.