Tim Cook: Apple Watch Sales 'Exceeded Expectations'

[V.K.]

According to same analysts, Apple Watch sales were around 1.2 million..

Doesn't seem all that strong to me, but I must admit, I have always been extremely skeptical of this product.

I am not a fan of the watch myself but that number is total BS. which analysts would that be? the article itself lists a consensus estimate of around 4 million and even the low number in the list of 27 polled analysts is 2.85mln.

besides, Cook said the watch sold better than the ipad when it launched. the ipad sold 3.27mln in the first quarter of availability. even given that ipad 1 launched on April 3 and the watch "launched" on April 10 it's very safe to assume they sold at least 3miln.

 

[Technarchy]

I agree with Tim Cook's comments regarding the upcoming holiday shopping season - that will be the real test of the Apple Watch's success.

Now that you can actually buy one without much drama. I'm sure the online only fiasco along with zero retailer support will take a toll on any companies sales figures

 

[robbyx]

Agreed but it's pretty clear that it's in the 3 million ballpark.All I'm saying is why be cryptic. Either say it how it is or reveal nothing.

Apple says they're not giving out numbers for competitive reasons. Laughable. That said, I understand why they don't want to break out watch sales. While sales might be good relative to the minuscule smartwatch market as a whole, they aren't going to be WOW AMAZING! And people only like AMAZING when it comes to Apple.

 

[kdarling]

Well, knowing the total sales is around $1B gives us a basis for more educated guesses. We know the cheapest product is $349 and I think we can safely assume the ASP will be closer to the $349 level then the $599 steel watch level (ignoring the gold watches for now). I'd go with $450 personally which suggests 2.2 million units. That's since mid to late April and TC has already said that June sales were higher than April and May, probably due to supply constraints. (remember Apple only declares a sale once shipped to the end user).

Slice had the most accurate numbers until store sales started. They said 2:1 Sport to regular. So 2/3 got a Sport, 1/3 got a regular. Also 1/5 of everyone got an extra band.

If we go generous and say there was $1.5B in Watch revenue, then that works out to be ~3.3 million sold. Slice says a bit less, but they only counted the US. We need overseas numbers to get a better estimate.

Noting of course, that Apple does not count online sales as revenue until they actually reach the customer, so there could be a bunch that have been ordered online, but not yet made and delivered during the quarter.

 

[C DM]

Apple says they're not giving out numbers for competitive reasons. Laughable. That said, I understand why they don't want to break out watch sales. While sales might be good relative to the minuscule smartwatch market as a whole, they aren't going to be WOW AMAZING! And people only like AMAZING when it comes to Apple.

Or they could be doing it for the reasons they mention and other related ones.

 

[V.K.]

Well, knowing the total sales is around $1B gives us a basis for more educated guesses. We know the cheapest product is $349 and I think we can safely assume the ASP will be closer to the $349 level then the $599 steel watch level (ignoring the gold watches for now). I'd go with $450 personally which suggests 2.2 million units. That's since mid to late April and TC has already said that June sales were higher than April and May, probably due to supply constraints. (remember Apple only declares a sale once shipped to the end user).

you forgot to consider the bands. watch+bands ASP should definitely be higher than 450$. also, how did you get 2.2 mln?
1bln profit on $450 ASP and 40% profit margin gives 5.5 mln.

 

[robbyx]

Or they could be doing it for the reasons they mention and other related ones.

It's pure psychology. Announcing that they sold 1 million, 2 million, 5 million...none of that makes a lick of difference to a competitor. So hiding behind the excuse that you don't want to give your competitors an advantage is what I expect from politicians, not CEOs. That said, the public always expects HUGE things from Apple. And so does the stock market. Apple hyped and hyped and hyped the Watch. Even though a few million sold to date is great relative to the size of the smartwatch market, it's pretty weak if you view the Watch as the next "must have" Apple device. And that's how the public and stock market view it. So they hide the sales in the "Other" category.

 

[mdriftmeyer]

Absurd. How could he insecure with record profits as the CEO of the most successful tech company in the world?
The Apple Watch will define this category.

The Apple Watch will eventually break out of that segment and have its own part of the Pie chart.

 

[imlynxy]

iPhone radiation is higher than Samsung Galaxy S6. I'm going not even to buy watch, but to switch to Android. Apple has no innovations or new ideas for the last 2-3 years. Apple Pay? Music? Radio?
The only thing I need Face Time and iMessages.

 

[imlynxy]

I agree; just like the Mac, iPod, iPhone and iPad were toys to some people.

No! iPhone is not a toy, but iWatch is. I returned my iWatch , did they deduct it from millions of sold items ?

 

[robbyx]

The Apple Watch will eventually break out of that segment and have its own part of the Pie chart.

My money is on Apple TV to break out before Apple Watch does. Of course we need that much-rumored ATV update first...

 

[doelcm82]

iPhone radiation is higher than Samsung Galaxy S6. I'm going not even to buy watch, but to switch to Android. Apple has no innovations or new ideas for the last 2-3 years. Apple Pay? Music? Radio?
The only thing I need Face Time and iMessages.

It seems that you're the one who stopped innovating. Once you had Face Time and iMessages, you stopped growing as a consumer.

 

[Carnegie]

you forgot to consider the bands. watch+bands ASP should definitely be higher than 450$. also, how did you get 2.2 mln?
1bln profit on $450 ASP and 40% profit margin gives 5.5 mln.

If you're basing the $1 billion estimate off of the increase in the Other category, that's revenue not profit. Based on what they said the Watch revenue total is probably something more than that $1 billion, but we're still talking about revenue.

 

[C DM]

It's pure psychology. Announcing that they sold 1 million, 2 million, 5 million...none of that makes a lick of difference to a competitor. So hiding behind the excuse that you don't want to give your competitors an advantage is what I expect from politicians, not CEOs. That said, the public always expects HUGE things from Apple. And so does the stock market. Apple hyped and hyped and hyped the Watch. Even though a few million sold to date is great relative to the size of the smartwatch market, it's pretty weak if you view the Watch as the next "must have" Apple device. And that's how the public and stock market view it. So they hide the sales in the "Other" category.

Or it can make a difference to a competitor.

 

[C DM]

iPhone radiation is higher than Samsung Galaxy S6. I'm going not even to buy watch, but to switch to Android. Apple has no innovations or new ideas for the last 2-3 years. Apple Pay? Music? Radio?
The only thing I need Face Time and iMessages.

No! iPhone is not a toy, but iWatch is. I returned my iWatch , did they deduct it from millions of sold items ?

All fine and good for you. Doesn't really mean much for anything else who have their own needs and wants that differ.

 

[Karma*Police]

That was the knock on iPad for at least the first gen. Literally that's what people called it in order to mock. People who consider the watch in the same class as a standalone device clearly shouldn't be investing money on something they don't understand.

It's Schoepenhaoer's 3 stages of truth in action...

"First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

The people who are ridiculing and hating on the watch will be talking excitedly about the upcoming model and what features they'd like to see in the not too distant future.

 

[B4U]

People just don't wear watches as much as they used too. The smartphone is all you need.

Except, my smartphone doesn't charge itself using solar power...

 

[V.K.]

If you're basing the $1 billion estimate off of the increase in the Other category, that's revenue not profit. Based on what they said the Watch revenue total is probably something more than that $1 billion, but we're still talking about revenue.

sorry, you are quite right! that certainly changes the numbers.

 

[robbyx]

Patience Grasshopper. You would make a terrible executive. It's a totally new product category. Yes, they spent a lot of cash and resources to develop it and already have a billion in revenue in one quarter. The life cycle of this product is in its infancy and the product category is not much older.
They haven't mildly tapped the wearable market and Watch OS2 will add functionality, not to mention give developers greater potential to develop killer apps.
The demand will grow!

I'm curious, what kind of "killer app" do you think someone might develop? Personally, I see no "killer app" for smartwatches until sensor technology advances and such devices gain a wider array of more accurate sensors. But even then, what sort of sensors might the watch include? Ones that will appeal to competitive athletes no doubt. Ones that will appeal to fans of fitness trackers. And ones that will appeal to people with specific medical conditions that require regular monitoring. None of which is a "killer app" in any sort of broad context.

 

[robbyx]

Or it can make a difference to a competitor.

How?

 

[MacDarcy]

I went to one of the biggest Apple Stores here in NYC tonight. Half the tables were taken up with Apple watch crap. The other half iphone stuff, and then a tiny corner was reserved for iMacs. I'm sorry, I just don't get the Apple watch love. Of course I'm already biased, im not a watch guy to begin with. But I haven't seen a single person here in NYC wearing one yet. Maybe it's just me. I dunno. I don't think its selling well.

 

[vvswarup]

Apple has become a victim of its own success. In the eyes of analysts and the media, any product that doesn't sell as well as the iPhone, i.e. 9 million in a weekend, the product is a failure, never mind that Apple's competitors would do anything to post such a "failure." Look at what happened with iPhone sales. On paper, analysts projected around 48 million phones. They wanted 50 million iPhones sold, though. Apple sold only 47 million. The stock lost almost 7% after hours.

Something is messed up about that picture. Let's put something into perspective here. Apple's posted revenue that was almost triple that of Google this quarter. In spite of this, for all the talk about Apple falling prey to the "law of large numbers," Apple's revenue growth was more than quadruple that of Google this quarter. Google beat expectations quite handily and its stock soared by 16%. Granted, Apple didn't smash expectations. But still, I can't understand how meeting expectations warrants a 7% drop in the stock.

What I have described is the case every quarter. Given the market's irrational expectations, Apple is smart to be tight-lipped about Apple Watch sales.

An added benefit is that the space is not very crowded. When the iPad came out, many predicted that it would not sell well. But they were totally wrong. The unexpected success led to a gold rush of tablet manufacturers coming out with competing offerings. But that's not happening with wearables. Companies are not rushing to start selling smartwatches. Everyone is taking their time and hedging their bets. The public is still not sure if the Watch was a success or not. All the public knows is that the Watch met internal expectations. But that's not enough to spur another gold rush.

 

[robbyx]

It's Schoepenhaoer's 3 stages of truth in action...

"First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

The people who are ridiculing and hating on the watch will be talking excitedly about the upcoming model and what features they'd like to see in the not too distant future.

That's wishful thinking. Sensor technology has to improve dramatically before the Watch will be doing much more than its doing today. It will get slimmer. Faster. Better battery life. But the people who don't like this product won't like it any better in a year, or two, or three...

 

[TheRainKing]

He must realise how meaningless it is to compare the Apple Watch sales to the original iPhone and iPad, and yet he did anyway.

 

[phpmaven]

I resent Cook's evasiveness. It reminds me of Bezos of Amazon, the King of smoke and mirrors. I could feel the annoyance from the analysts over Cook's unwillingness to give Apple Watch figures. It's no wonder shares plummeted.

I noted that Cook emphasised how the next Watch software update would bring terrific apps to it. So he is effectively saying to everyone, "Don't bother buying the watch now; wait a few months until there are some decent apps for it, because there aren't any now."

Not exactly a vote of confidence in the current product.

Shares plummeted? They dropped by 1% in after hours trading and are still higher than they were a week ago. The exaggeration and hyperbole in these threads knows no bounds.