Tim Cook: Apple Watch Sales 'Exceeded Expectations'

[djcerla]

Amazing how some people believe stock price movements after earnings are somehow meaningful.

Wall St. simply plays its game, and the name of this game is to screw retail investors in order to make money out of them.

In the long run, share price always re-aligns with fundamentals, that's inevitable, and that's precisely why Apple is now the most valuable company in the world (way undervalued, too, seen its P/E and huge pile of cash at hand.)

 

[navaira]

I still don't understand how revealing the Watch sales figures would help competition. Does anyone seriously think Xiaomi would go "we weren't going to make a carbon copy of the Apple Watch if the sales were 3.5 million, but now that we know it's actually 3.6 million it changes everything"? Would Samsung go "damn, they sold 3.6 million, now we're going to dissolve our smartwatch division"? The ONLY reason I can see for not revealing the figures is that they are afraid AAPL stocks would drop further. If it's a hit, why hide the fact?

 

[thasan]

"Around" 2 million seems pretty close, most likely.. Although I wouldn't be shocked if the number ended up being lower. Either way, does anyone really expect Watch sales to increase substantially over the next 3 months? All the early adopters have already purchased the device.. Now the sales will be getting to the rest of the market. It's pretty likely, I would say very likely, that watch sales over the next 3 months or so are going to be ghastly, i.e., tank, and that's why it seems like Cook and Apple are betting on a lot of adopters purchasing the watch as Christmas gifts in the holiday season, when so many are looking for something "new." I'm still not buying that either, but we'll soon find out.

I think the only way the watch really catches on as a mainstream device is if the form factor changes dramatically, enabling a larger screen size without changing the size of the device (projection system). Otherwise, I just don't see it. It will just be a "thing" that some people wear, but never catches on substantially.

Projecttion system? on what to project?
I think the only way watch will catch on if i can use it to teleport from office to home /s

 

[dannys1]

While you have your head up staring at your watch screen. What a liberating experience.

"Glancing" or sometimes not even needing to look at all as the haptic feedback has told me all I need to know. Can't be done with the phone.

 

[Popeye206]

My take is the Apple Watch sales don't really matter right now. It's a new product category that has yet to mature and I do think it's important for Apple to play here since it's going to drive more innovations in order to make a product like this perform up to expectations. Thinner form, and the desire for more battery life will drive advancements that will benefit other products.

I have not bought one yet because I think the 2.0 version will be way better, and I think benefits will be more defined, so why spend the money now.

 

[dannys1]

I still don't understand how revealing the Watch sales figures would help competition. Does anyone seriously think Xiaomi would go "we weren't going to make a carbon copy of the Apple Watch if the sales were 3.5 million, but now that we know it's actually 3.6 million it changes everything"? Would Samsung go "damn, they sold 3.6 million, now we're going to dissolve our smartwatch division"? The ONLY reason I can see for not revealing the figures is that they are afraid AAPL stocks would drop further. If it's a hit, why hide the fact?

A number of reasons - generally businesses prefer to submit abbreviated accounts so they're not just submitting their entire financial records to competitors. The 3.5 million figure you're quoted is complete guess work, it could be anything from 1 million to 8 million - and more so the watch is in short supply and its one quarter - they've only been able to make it to order at the moment, releasing that information will give less away about the watch sales and more about the sort of supply and demand chain Apple has. It would also undermine what they'll be able to announce when there are proper sales of the watch after a year with the supply chain correctly sorted out and all marketing and promotions underway - it makes no sense to announce sales after the first quarter.

 

[uid15]

The denial is strong in here.

 

[doelcm82]

Amazing how some people believe stock price movements after earnings are somehow meaningful.

Wall St. simply plays its game, and the name of this game is to screw retail investors in order to make money out of them.

In the long run, share price always re-aligns with fundamentals, that's inevitable, and that's precisely why Apple is now the most valuable company in the world (way undervalued, too, seen its P/E and huge pile of cash at hand.)

I've never understood how this screws me, as a retail investor. When Wall Street overreacts, I tend to buy, at a lower price than I would if Wall Street acted rationally.

I've made a lot of money "getting screwed" by Wall Street.

 

[dotnet]

The denial is strong in here.

Definitely. While the haters are crying on each others' shoulders Apple is laughing all the way to the bank.

 

[avanpelt]

Trying to hide it in 'Other products' reveals Cook's insecurity and complete lack of confidence in this device.

Bingo. Once it's selling in the tens of millions per quarter (if that happens), they'll be proud of those numbers and want to show them off. Obscuring the watch sales numbers in "Other" communicates strongly that they weren't sure how the watch would sell at first so they weren't comfortable broadcasting its sales figures lest the world conclude that the watch is a failure right out of the gate.

 

[djcerla]

I've never understood how this screws me, as a retail investor. When Wall Street overreacts, I tend to buy, at a lower price than I would if Wall Street acted rationally.

I've made a lot of money "getting screwed" by Wall Street.

And I do the same. Will be buying today and the following days if it keeps on falling. It's easy, easy money.

But the typical mom/pop investor will chicken out and sell, even to a loss, even if Apple had a record quarter and clearly dominates, even if the drop makes no logical sense at all.

 

[62tele]

Tranlslation of ""We beat our internal expectations" for the watch"

We cant believe people bought this useless fashion accessory, for our next product lets just sell a necklace or ring that has no use whatsoever and slap an Apple logo on it, and have the logo light up, but lets put a battery in thats so small it only lasts 5 minutes... if they like a watch that they have to charge every day they will love a necklace they have to sit next to a wall socket and have plugged in all the time.

Thanks for the pointless hyperbolic narrative.

It's not useless. It's highly functional and it's a great extension of my iPhone. As for battery life, I've never experienced an issue with lack of "juice" by bedtime.
I would buy one again if mine were damaged or lost.
The short sighted, myopic opinions of many on this forum is astonishing

 

[neuropsychguy]

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

If you bought an "iWatch" you didn't buy it from Apple so no, it was't included in their sales figures.

Here are reactions to the iPhone with statements essentially equating it with a toy (e.g., good for watching videos): http://www.techtimes.com/articles/55370/20150526/reaction-blackberry-when-first-iphone-came-out.htm

And people with as many credentials as you stating it was nearly worthless: http://bgr.com/2015/04/07/original-iphone-reaction-comments/

 

[Chupa Chupa]

A substantive narrative on what? Analysts increased iPhone and Q4 estimates right before earnings and Apple didn't meet those increase estimates. That's why the stock is down after hours. All this noise around the Watch is just that, noise.

Bottom line is YOY revenues were up 33%, earnings up 39%, EPS up 45%, iPhone sales up 35% and yet AAPL down 7% after hours. Any other company with those YOY growth figures would not be down 7% after hours.

I disagree that the AW talk -- or non-talk can be easily dismissed as "noise." Apple being cagey about a device it hoists as a "new product category," yet won't put it in its own category, and then won't say anything meaningful about sales is troublesome to me. It says "we are not 100% confident about it's growth or ability to become a major revenue factor." Also as the first all-new product from Apple in 5 years it begs the question whether Apple can parlay another blockbuster in the likes of the iPod, iPhone, or iPad.

The stock is down because, yes, iPhone expectations were not met (China not as strong as thought it would be) and with the AW a big sales question -- literally -- the big question on the Street is "with the iPhone maturing what is going to take Apple to the next level." Apple is going to make billions and billions for a long time, same as Microsoft continues to live off Windows. But Microsoft's growth is limited now. Is that Apple's future? That is why the stock is down. Tim Cook fails to show any leadership. He's like Steve Ballmer. A happy camper with no vision.

 

[macmanwa]

So they are afraid of Samsung now, is that what you're saying?

No what they are saying is Apple would be foolish to tip they hand to ANY competitor, not just Samsung. Why on earth would they give their competition any insight into a new Apple product line--especially one launched just a few months ago? This was the same strategy they employed with the iPad at first as well.

 

[bbeagle]

Their expectations I'm assuming were "Only the die hard tech customers and the curious bunch will actually buy this, and they did."

Edit:
Original Pebble: 700k in 2014
Pebble Time: over 1 million since early 2015
Moto 360: 720k since early 2015
Samsung Gear: estimated 1.2 million devices shipped since 2014

Your numbers are wildly inaccurate.

The ENTIRE 'Android Wear' segment sold 720K. Moto 360 led the pack, but did NOT sell 100% of Android Wear watches. Plus that number is from 2014.
http://techcrunch.com/2015/02/11/mo...es-shipped-in-2014-says-canalys/#.bxes3a:Uq2F

Pebble Time has sold about 100,000, not 1.2 million. 1.2 million counts BOTH the Pebble and the Pebble Time.
http://techcrunch.com/2015/03/29/pebble-times-20m-kickstarter-campaign-by-the-numbers/

Samsung only 'sells' their watches when they discount them down to $129. Otherwise they sit unsold on retailer's shelves.

 

[RickInHouston]

Definitely. While the haters are crying on each others' shoulders Apple is laughing all the way to the bank.

Just remember it's apple and only apple that is laughing all the way to the bank. Not their fans, just apple. Apple is making the deposits.

 

[nando87]

I disagree that the AW talk -- or non-talk can be easily dismissed as "noise." Apple being cagey about a device it hoists as a "new product category," yet won't put it in its own category, and then won't say anything meaningful about sales is troublesome to me. It says "we are not 100% confident about it's growth or ability to become a major revenue factor." Also as the first all-new product from Apple in 5 years it begs the question whether Apple can parlay another blockbuster in the likes of the iPod, iPhone, or iPad.

The stock is down because, yes, iPhone expectations were not met (China not as strong as thought it would be) and with the AW a big sales question -- literally -- the big question on the Street is "with the iPhone maturing what is going to take Apple to the next level." Apple is going to make billions and billions for a long time, same as Microsoft continues to live off Windows. But Microsoft's growth is limited now. Is that Apple's future? That is why the stock is down. Tim Cook fails to show any leadership. He's like Steve Ballmer. A happy camper with no vision.

But microsoft has been limited for a while and even losing money sometimes and however MSFT is more expensive than AAPL. The problem with AAPL is its own success and the weak hands of some people who just base their trades on sentiment and chartism. It's always the same c**p when it comes to AAPL, incredible growth, profits, margins and talent and incredibly low valuation

 

[Chupa Chupa]

But microsoft has been limited for a while and even losing money sometimes and however MSFT is more expensive than AAPL. The problem with AAPL is its own success and the weak hands of some people who just base their trades on sentiment and chartism. It's always the same c**p when it comes to AAPL, incredible growth, profits, margins and talent and incredibly low valuation

The point is, is Apple TODAY at the point where Microsoft was in 1999, nearing its peak, heading for sideways single digit growth, not is Apple and Microsoft on par today; that would be silly. Microsoft didn't have a blockbuster product to follow Windows even though it tried. Apple had a series of huge growth products but seems to be shooting blanks now. Cook can say the Apple Watch is beyond expectations but with out objective data to back it up it's fair to assume he is all talk.

Here is the question so many are asking in that regard: China doesn't seem to be taking up the iPhone in the numbers expected. If that trend remains the the iPhone's growth is limited to current users upgrading and maybe picking off a few % of Android users each quarter. But that is peanuts compared to the China market that has yet to develop as thought would. It's a question any prudent Apple investor is asking right now. No product can have fast growth forever, that's just reality. So are we at peak iPhone?

 

[ChrisCW11]

Of course Apple is going to "spin" a significant shortfall of expected earnings. I am sure if Apple Watch sold 10 million units Tim Cook would be all over it bragging about how Apple redefined another market.

Apple is the king of spin, they will twist numbers and words to make sure "Everything is Awesome, TM".

One quarter is definitely not a sign of the Applecalypse, all Apple needs is to do is dust off iPhone 6, stick an S on it, and generate another 25 million unit sales, but this company is starting to tread on a thin line as the pull further and further away form the Jobs legacy and I am not sure the company as a whole today can keep consumers "wowed".

Personally I am incredibly bored by Apple and I am not alone in that feeling and Apple can't afford to start rolling out mediocre products that don't meet investor expectations. Apple Watch is a failure by Apple standards, period.

 

[phpmaven]

The market doesn't believe Tim Cook, and why should it?

Nothing speaks louder than clear sales figures. That has always been a good indication of the health of a product. Cook effectively signalled the failure of the watch even before it went on sale when he stated that he wouldn't reveal sales figures.

And now, he is having to justify the watch couched in descriptive adjectives that mean nothing other than that he is trying to hide the failure of the product. It's a sad turn of affairs.

I wonder if he will use the same tactic for Apple Music. I note that he was happy to boast of millions of people signing up for it—even though it's currently free. Is that not helping the competition? Apparently not in Cook's book. But will he give concrete figures after a year of paying subscribers? If he doesn't, we will know it has failed, as he has already divulged a rough figure of millions now.

I guess we now know what all that sapphire was wanted for: mirrors. The smoke is provided by the forest fires in drought-stricken California.

The only thing that's sad is this silly post and the minuite of

Not sure where you learned how to look up after hours quotes but you might want to get your money back. Right now AAPL is down almost 7%.

I can lookup after hours quotes just fine, thank you. The share price I quoted was what it was at the time I looked it up. This doesn't mean jack squat anyway as right now the share price is what it was on July 10. The price climbed over the last week or so in anticipation of the financial report. This is merely a correction and has nothing to do with the Apple Watch.

 

[dugbug]

http://m.fastcompany.com/3042987/you-guys-realize-the-apple-watch-is-going-to-flop-right

If you disagree with what is said in that article, then, sorry, I just don't think your looking at this product objectively. Just because we all love Apple products doesn't mean we will shouldn't scrutinize decisions that may turn out to be the wrong one.. And so far, this product is not catching on with the public. This product category, right now, doesn't serve much function.

If sales were through the roof, we would know the real numbers. I hope I'm wrong when I say this, but it sure seems to me that Apple is undergoing a subtle shift where computers are losing performance, odd color choices are being introduced, just more and more "in your face." If that makes any sense. Silver aluminum is being replaced by gold. Einstein and Bob Dylan are being replaced by Pharrel, Drake, and Dr. Dre. Former heads of designer fashion houses are being out in charge of its retail stores. Certainly doesn't feel like the Think Different company where quiet sophistication is king does it?

that article is so ridiculous it got torn apart by just about everyone:
http://api.viglink.com/api/click?fo...atch flop | Macworld&txt=Quartz’s Dan Frommer

and even his response was macalope'd

http://www.macworld.com/article/294...al&utm_source=twitter.com&utm_campaign=buffer

 

[Banyan Bruce]

Definitely. While the haters are crying on each others' shoulders Apple is laughing all the way to the bank.

Yes they are laughing all the way to the bank...banking the cash of those who bought a prototype device.

I'm not a hater, I just couldn't see a use for it that isn't already served by the iPhone. I see very little value in the device for me.
My buddy says his watch allowed him to use Apple pay with his iPhone 5. For the cash he shelled out on the watch, he could have bought an upgraded iPhone 6 and got loads of improved functionality from his phone. It's just horses for courses, I guess.
If devices or other products are a success, Apple often sings that from the hill tops, so this cagey talk makes wonder what the size of expected sales actually was. It's just woolly and disingenuous to its customers and share holders.
Anyway, I probably being rather smug in saying this, but I'm glad it's not my cash they're carrying to the bank this time.

 

[dotnet]

Just remember it's apple and only apple that is laughing all the way to the bank. Not their fans, just apple. Apple is making the deposits.

Yes, that is generally the case in the market place – the buyer pays, the seller collects the money. Occasionally, just occasionally, when a product is in really high demand, customers can make a buck, too, by profiting from the shortages. As happened with the Apple Watch.

 

[JackANSI]

They’ve already given up on the Mac, (Pro).

That does annoy me that they jacked up the price, removed internal expandability/upgradability, and have let it basically rot on the tree now going on 2 years.

You can build a monster of a PC for the base price of the (Late 2013!) Mac Pro... I know I did. And when I need more power, I can (more than likely) throw more RAM and a new pair of video cards in it. (maybe even a next gen CPU)