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Section 508

June 26th, 2015

How many watches is Apple selling?

How many watches is Apple selling?

Nobody really knows yet if the Apple Watch will turn into a mass market product beyond early adopters.

Apple Watch

Wearable device shipment projections for 2015 vary widely. Research firm IDC forecast global shipments would reach 45.7 million units this year, up 133% from 2014. Market analysis firm CCS Insight estimated 75 million shipments, which it said would be a 159% jump. And Yano Research Institute forecasts shipments of 104.8 million wearable devices in 2015, more than four times its 2014 estimate.

Forecasts for the first year of sales for Apple Watch come in between 40M by end of 2015 (Trip Chowdhry‎), 40M (UBS) and 36M (Morgan Stanley) as the highest and 15M (KGI) and 8M (Piper Jaffrey) as the lowest.

Here are some of the highlights and comments:

  • Research analytics company Slice Intelligence (by way of Reuters) estimates Apple had sold nearly 2.8 million Watches in the U.S. as of mid-June, a little over a month into its sales life.‎ Some analysts conclude that this means about 5M worldwide.
  • KGI thinks that Apple Watch sales will fall short of expectations and downgrades forecast to 15M for first year. Read more.
  • In a research report from Thursday, Cantor Fitzgerald analyst Brian White says ‎”We continue to believe Apple Watch will prove to be the best-selling new product in Apple’s history (within first 12 months)”.
  • According to the latest numbers from the Federation of the Swiss Watch Industry (FSWI) and a comment from an analyst, it seems Apple’s smartwatch is already making a dent in Swiss watch exports. Read more.
  • eMarketer analyst Cathy Boyle is more sceptical based on a recent report: “Awareness of wearable devices is up, industry forecasts for growth are high, but consumers’ interest in buying anything besides a fitness tracker is still low,” and continues‎ “Even though the Apple Watch has had early sales success, consumer survey data suggests manufacturers, specifically their marketing teams, have significant work to do in convincing the average person that a smartwatch is as worthy of their time and money as tablets proved to be.”
  • Trip Chowdhry, the most bullish voice on the Apple Watch, said that he expects Apple to sell 40m units of the device before year’s end. ‎He said in a report released in the first week of June that Apple had sold 7m units of the Watch and that just 2 million units had arrived at doors by the end of May, but up to 5 million could be shipped by the end of June.
  • Gene Munster of Piper Jaffray had the same forecast on the device, one of the most bearish on Wall Street. He says that Apple will sell just 8 million units of the Watch this year.
  • Toni Sacconaghi of Sanford C. Bernstein is also far less optimistic in a report published on Friday. He measured Internet “buzz” with Google Trends data. Compared with past Apple products, the Watch appears to be generating much less interest. This methodology suggests Watch sales of just 750,000. That isn’t Mr. Sacconaghi’s forecast, but he notes it is far below his own projection of three million units for this quarter.

Finally it’s worth noting that in its first calendar year on the market the first iPhone sold just 1.4m units, and in its second year it sold just over 11 million.

So what do we think? Apple Watch is already a success no matter where the first year of sales ends up. We believe however, that the Apple Watch sales is primary in demand from early adopters and that the mass market pick-up will wait until the next generation of the watch. This could mean that early sales figures will outpace the second quarter with a jump again for Christmas. Until then, enjoy the exclusivity of being an Apple Watch owner.

Tags: Apple Watch insights wearables

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