What’s This?
2015-04-13 15:51:02 UTC
The Apple Watch launched Thursday, and the clock is already ticking on whether the pricey gadget will be a success.
The boxy little device is off to a rockier start than some industry watchers had anticipated, with analysts questioning whether Apple had correctly judged supply and demand — and price. Models of the Apple Watch start at $ 349 for the basic Sport model and go up to $ 17,000 for the gold-trimmed, red-leather-banded Apple Watch Edition for which the company requires buyers to enter a VIP room guarded by employees.
For Apple geeks, there’s no greater object of gadget lust than the Apple Watch, but the challenge is getting a hold of one. Apple’s new line of smartwatches sold out less than 30 minutes after being made available for pre-order online on Friday morning.
Analysts were wary, however, of the limited supply of the devices.
Image: Eric Risberg/Associated Press
The magic number: 20 million watches
Gene Munster, an Apple analyst with Piper Jaffray had previously estimated that the company would ship 1 million watches on its opening weekend starting April 24, when buyers will be able to walk to Apple Stores and order the latest in geek fashion.
“Given the quick sellout, it seems less likely that Apple will be able to deliver 1 million units of stock on opening weekend,” Gene Munster, an Apple analyst with Piper Jaffray, wrote in an investor note Sunday night provided to Mashable, referring to his earlier sales estimate.
Munster continues to expect Apple Watch sales will top two million units for the June quarter. He admits, however, that “there now appears a higher chance that the number is impacted by supply constraints, given some units are already showing June and July delivery dates.”
That said, Raymond James’ most recent survey suggests that 5% of iPhone users intend to buy a watch, which would be about 20 million watches.
Edward Yruma, a research analyst at KeyBanc Capital Markets, wrote in a research report Sunday that its supply checks suggest Apple is ordering enough components to build at least 20 million watches this year.
The existential Apple Watch
Because it’s Apple, the future of the Watch will mean much more than just how one device does. Analysts will be watching to see if Apple starts slipping on its reputation for innovation.
Some have raised concerns about the early mixed reviews for the first generation version of the Apple Watch.
“We are concerned that relatively muted reviews so far could place added fear in investors’ minds about the company’s ability to launch successful new product categories,” Tavis McCourt, an analyst with Raymond James, wrote in an investor note.
Apple’s not providing much guidance yet on its progress. In recent years, the company has typically released sales figures for many of its hardware devices on the Monday morning after the first weekend of pre-orders. This time, the tech giant is keeping mum — which could set off more red flags about initial shipments.
In lieu of any official numbers, many media outlets have turned to third-party data from Slice Intelligence, an online shopping data firm, which estimates that nearly one million people pre-ordered the watch on Friday. But again, it’s worth stressing that these are in no way official numbers.
Slow start or not, Yruma says the Apple Watch is a “moment of reckoning” for the traditional watch industry, which may not be ready for how the Apple Watch changes everything.
“At a minimum, the widespread buzz may cause something of a standstill in the watch market,” he writes. “We do not believe retailers in this case, and by our deduction, Fossil and Movado, have explicitly factored in any level of cannibalization.”
Image: KeyBanc Capital Markets
Topics: Apple Watch , Business
Analysts estimate 20 million people will buy an Apple Watch, even after a slow start - Mashable
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